The Federal Trade Commission is seeking public comment on different approaches to determining a “fair and reasonable” fee for credit scores under the Fair and Accurate Credit Transactions Act (FACTA) and the Fair Credit Reporting Act (FCRA). FACTA, which was enacted on December 4, 2003, amends the FCRA and requires, among other things, that nationwide consumer reporting agencies (CRAs) provide to consumers, upon request, a copy of their credit scores.
A credit score is a numeric characterization of a consumer’s credit history, which creditors may use to predict the level of risk associated with providing credit to the consumer. Generally, a higher score indicates lower predicted risk. Consumers can purchase their credit score from the three nationwide credit bureaus or other companies not covered under FACTA. The cost for credit scores currently appears to be between $4 and $8. FACTA directs the Commission to develop a “fair and reasonable” fee for credit bureaus to charge consumers for a copy of their credit score beginning December 1, 2004.
In a Federal Register notice published today, the Commission presents several approaches for determining a reasonable fee for score disclosure. The Commission seeks comments on these approaches and on the various factors and methods that should be considered in determining the appropriate fee. The Commission also seeks comment on: (1) the state of the current market in direct-to-consumer scores; (2) the percentage of the credit score market that would be regulated, and what percentage unregulated, under the FCRA; (3) the competitive effects of the imposition of a maximum price requirement that applies only to part of the market for credit scores; (4) whether consumer reporting agencies will choose to fulfill their obligation under the FCRA directly or through subsidiaries; (5) the appropriate market to consider if the Commission chooses to determine a fee based on the market for scores; (6) whether factors other than price should be considered in determining a fee based on the market for scores; and (7) should the Commission choose a specific dollar amount, whether it should include a mechanism for periodic adjustment of the price, and if so, what factors should determine the need for an adjustment.
Written comments should refer to “FACTA Credit Score Fee, Project No. R411004” both in the text and on the envelope, and should be mailed to the following address: Federal Trade Commission/Office of the Secretary, Room H-159 (Annex O), 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Comments containing confidential material must be filed in paper form. The FTC is requesting that any comment filed in paper form be sent by courier or overnight service, if possible, because U.S. postal mail in the Washington area and at the Commission is subject to delay due to heightened security precautions. Comments also may be filed electronically at https://secure.commentworks.com/ftc-CreditScoreFee.
The Commission vote approving publication of the Federal Register Notice was 5-0.
Copies of the Federal Register notice are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint in English or Spanish (bilingual counselors are available to take complaints), or to get free information on any of 150 consumer topics, call toll-free, 1-877-FTC-HELP (1-877-382-4357), or use the complaint form at http://www.ftc.gov. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to hundreds of civil and criminal law enforcement agencies in the U.S. and abroad.