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Fair Credit Reporting: 8.12.4 Enforcement of Right

The failure to comply with the affiliate sharing provisions of the FCRA is subject to the usual private remedies of the FCRA including actual damages, punitive damages, costs, and attorney fees.728 To the extent that these requirements overlap with those of the Gramm-Leach-Bliley Act, which has no private right of action,729 violations of these requirements should be remediable under the FCRA.

Fair Credit Reporting: 8.13.1.1 Generally

The Debt Collection Improvement Act amended the Federal Claims Collection Act to authorize federal agencies to disclose debtor information to consumer reporting agencies.731 Information that may be released is limited to the name, address, and Social Security number of the obligor, the amount of the claim, and the CRA involved.732

Fair Credit Reporting: 8.13.2 Notice Related to Use of a Consumer Report for Child Support Purposes No Longer Required

Under the FCRA, two separate provisions permit state and local government officials to obtain consumer reports to help determine an individual’s capacity to make child support payments.742 The first provision applies to child support enforcement in general agencies, which may be state or local.743 The second provision744 applies to the single state agency that administers the federal child support enforcement state plan under Title IV-D of the Soci

Fair Credit Reporting: 8.14.1 Other FCRA Notices

Consumers are entitled to a number of other notices, most of which relate to possibly fraudulent use of credit. Specifically, consumers are entitled to notice when a furnisher receives notice of a change of address from the consumer,748 when fraud blocks are removed from the consumer’s credit file,749 and when accounts that have been inactive for two or more years are reactivated.750 These notices are discussed elsewhere in this treatise.

Fair Credit Reporting: 8.14.2 State Law Requirements

Sometimes state law imposes additional disclosure requirements when information is first gathered or reported.751 For example, Minnesota requires that the consumer receive written disclosure prior to preparation of a report for employment purposes.752 California requires creditors to notify consumers and cosigners when first furnishing negative consumer reports to a CRA.753 New York requires that when a CRA provides a consumer report that contains

Fair Credit Reporting: 8.16.2 Other Notices

A number of other notices may be provided to furnishers of information. These notices usually relate to the reports that the furnisher has made in reference to a particular account.

Fair Credit Reporting: 8.17.1 Overview

Users of consumer reports are the end users of the information maintained within the reporting system. Because the use of this information will often determine whether a consumer will have access to goods, services, or employment opportunities, the FCRA has put in place mechanisms to ensure that the information is properly used. And in those instances when the information is suspicious or subject to dispute, the Act puts in place a series of notice requirements to ensure that information is used appropriately.

Fair Credit Reporting: 8.17.2 Notices of User’s Duties Under the Act

CRAs must provide a notice to each user of consumer reports describing their responsibilities under the FCRA.772 The form of the notice is prescribed by Regulation V, which includes a model form.773

This notice establishes that the user was informed of its legal responsibilities. It will likely appear in every contract between CRAs and their subscribers who use consumer reports.

Fair Credit Reporting: 8.17.3.1 Nature and Content of Notice

One of the most well documented causes of identity theft has been the failure of creditors and CRAs to note and take action when a new account is opened using an undocumented address. Consumer advocates had contended that both the creditors and the CRAs were in a position to immediately catch fraudulent uses of credit by noting these address discrepancies, which were apparent from the reports being requested.

Fair Credit Reporting: 8.17.3.2 Time and Manner of Notice

The provisions of the FCRA do not specify a time for the notice. Nonetheless, if the notice is to serve the function anticipated by Congress, the notice should be provided along with the requested report so as to allow the user of the report to take preventive action and avoid fraudulent use of the consumer report.

Fair Credit Reporting: 8.17.3.3 Enforcement of Notice Rights

The violation of the address discrepancy notice provision by the CRA is privately enforceable, since violations of section 1681c are not excluded from the FCRA’s private right of action. Violations are subject to the usual private remedies of the FCRA including actual damages, statutory damages, punitive damages, costs, and attorney fees.780 The failure of a CRA to provide the required notice could foreseeably lead to identity theft and harm to the consumer’s credit file.

Fair Credit Reporting: 8.17.4.1 Nature and Content of Notice

It often happens that, after a reinvestigation, a CRA refuses to delete or modify the disputed credit information. In those instances, the consumer has a remedy they can use to inform potential creditors, employers, and insurers that this information may not be reliable.

Fair Credit Reporting: 8.17.4.2 Time and Manner of Notice

The FCRA does not direct either the time or manner of the notice. However, the nature of the request and the anticipated response would dictate that the notice be given within a reasonable time and in a fashion that is reasonable under the circumstances.

Fair Credit Reporting: 8.17.4.3 Enforcement of Notice Rights

The violation of these dispute notice provisions by a CRA or user is enforceable, as violations of section 1681i are not excluded from the FCRA’s private right of action. Violations are subject to the usual private remedies of the FCRA including actual damages, statutory damages, punitive damages, costs, and attorney fees.786

Fair Credit Reporting: 12.4.2.2.3 Can a CRA take advantage of a furnisher or user’s arbitration agreement

CRAs may try to take advantage of an arbitration agreement between the consumer and another party, such as a user or a furnisher. In general, only the parties named in an arbitration agreement are bound by the agreement. For example, where an arbitration agreement requires arbitration of claims involving the creditor, its employees, its agents, or its assignees, this should not extend to a CRA.

Fair Credit Reporting: 16.3.1.2 Credit Invisibility

The vast majority of adult Americans, nearly 200 million, have a credit score, but a smaller percentage are “credit invisible.”83 A CFPB study found that about twenty-six million consumers, or 11% of the adult U.S. population, lack any file at the nationwide consumer reporting agencies.84 Another nineteen million consumers, or 8.3% of the adult U.S. population have files that are not scored due to lack of sufficient or recent activity.85

Fair Credit Reporting: 16.4.1.5 Disclosure of Non-Credit Risk Scores

The FCRA’s requirement to disclose credit scores at section 1681g(f) only requires the CRAs to disclose risk scores that predict “credit behavior.”128 This particular requirement does not require CRAs to disclose any other type of risk score, such as specialty scores;129 the FCRA’s general requirement for disclosure of consumer reports specifically exempts not only credit scores, but also “risk scores or predictors.”130 This lack of a disclosure re

Fair Credit Reporting: 16.7.3a Non-Credit Uses of Credit Scores

Credit reports and credit scores are increasingly used for non-credit purposes, such as employment328 and tenant screening.329 These non-credit uses have been criticized by advocates as inappropriate and having a disparate impact on consumers of color.330 In some cases, these uses may be a proxy for other types of screening t

Fair Credit Reporting: 12.3.1.6 Constitutional Challenges

Defendants have challenged both the FCRA and the California Investigative Consumer Reporting Agencies Act (ICRAA) on constitutional grounds. Two aspects of the FCRA have been subject to attack: its authorization of potentially enormous statutory damages in a class action, and its restriction on the dissemination of certain accurate information. As to the former, the contention that FCRA statutory damages are unconstitutionally vague and, in the context of a class action, excessive, has failed in the majority of cases.381