Recent amendments to the Fair Credit Reporting Act ("FCRA") will require consumer reporting agencies to provide 1) a summary of rights under the law to consumers, (2) a notice of responsibilities under the law to parties who regularly furnish such agencies with consumer information, and (3) a notice of responsibilities under the law to parties who obtain consumer reports from the agency. The amendments, which become effective September 30, 1997, are embodied in the "Consumer Credit Report Reform Act of 1996" which was signed by the President on September 30, 1996.
The FCRA is designed to promote the accuracy and privacy of information in the files of consumer reporting agencies such as credit bureaus. Consumer reporting agencies and those who use their information about consumers have always had specific responsibilities under the FCRA. The recent amendments impose additional responsibilities and for the first time, impose specific duties on parties who furnish information to the consumer reporting agencies.
The FCRA requires the Commission to prescribe the content of the notices, as well as the form of the consumer summary. In order to comply with the law, the notices distributed by consumer reporting agencies must be substantially similar to the notices prescribed by the Commission.
The FTC is publishing for comment the three notices in the Federal Register tomorrow, February 28. Comments on the notices will be accepted until March 31, 1997.
1. The Summary of Consumer Rights
Under the FCRA, consumers who are the subject of consumer reports have specific rights, including the right to learn what information about them is in credit bureau files and the right to dispute inaccurate or incomplete information. In a number of circumstances, including after denial of credit, consumers have a right to a free copy of their credit report. The summary of consumer rights that the Commission is publishing for comment discusses the major rights that consumers have under the FCRA.
2. The Notice to be Sent to Furnishers of Information
The recent amendments to the FCRA impose, for the first time, specific responsibilities upon those persons who furnish information to consumer reporting agencies. The Commission’s proposed notice discusses each of the responsibilities that furnishers will have under the amended FCRA.
3. The Notice to be Sent to Users of Consumer Reports
The users of consumer reports have always had certain responsibilities under the FCRA.
When the recent amendments to the FCRA go into effect, users will have additional responsibilities. The Commission’s proposed notice sets forth all such responsibilities by type of user.
The Commission is requesting comments on the proposed notices, prior to prescribing them in accord with the amended FCRA in time for them to be in use when the amendments become effective September 30, 1997. In addition, the Commission is seeking comments on the need to provide guidance about the timing for the distribution of the furnisher and user notices, and about the impact that the distribution of the three notices may have on small entities, as well as suggestions as to any ways in which the Commission can both meet its obligations under the FCRA and (if possible) lessen any burden imposed on small businesses.
The three notices will be published in the Federal Register on Friday, February 28, 1997. Comments should be submitted to: Office of the Secretary, Federal Trade Commission, Room H-159, Sixth Street and Pennsylvania Avenue NW, Washington, D.C. 20580. Submissions should be marked "Proposed Notices of Rights and Duties under the Fair Credit Reporting Act.
The Commission vote to publish the notices was 5-0.
Copies of the notices are available on the Internet at the FTC’s World Wide Web Site at: http://www.ftc.gov (no period.) FTC documents are also available from the FTC’s Public Reference Branch, Room 130, 6th Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580; 202-326-2222; TTY for the hearing impaired 1-866-653-4261. To find out the latest news as it is announced, call the FTC’s NewsPhone recording at 202-326- 2710.
(FTC File No. P974-805)