September 15, 1999
Sylvia Sum, Esq.
Saalfeld, Griggs, Gorsuch,
Alexander & Emerick, P.C.
P.O. Box 470
Salem, OR 97308-0470
Re: Section 603(d) and (f) of the Fair Credit Reporting Act
Dear Ms. Sum:
This is in response to your letter, and our subsequent telephone conversation, concerning the application of the Fair Credit Reporting Act (FCRA) to a number of situations. Your questions are repeated below in italics. We then provide our views on these issues.
1. Is a commercial service that reports only "public record" information a consumer reporting agency (CRA)?
An entity that meets the definitional requirement for a "consumer reporting agency" (CRA) in Section 603(f) of the FCRA is covered by the law even if the only information it collects, maintains, and disseminates is obtained from "public record" sources.
Section 603(f) defines a "consumer reporting agency" as any person "which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information ... for the purpose of furnishing consumer reports to third parties ...". In turn, Section 603(d) defines a "consumer report" as the communication of "any information" by a CRA that bears on a consumer's "credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living" that is "used or expected to be used or collected in whole or in part" for the purpose of serving as a factor in establishing eligibility for credit or insurance to be used primarily for personal, family, or household purposes, employment purposes, or any other purpose authorized under Section 604.
If the commercial service you describe regularly provides information for the purposes set forth in the definition of consumer report in Section 603(d), the agency is a consumer reporting agency and the information it collects from public record sources and maintains in its computerized files is subject to the FCRA. The "public record" status of any of this information is irrelevant.(1) The application of the FCRA to services that collect "public record" information is discussed in more detail in the enclosed staff opinion letter (LeBlanc, June 9, 1998).
2. Is a law firm that researches the criminal records of job applicants for its clients a "consumer reporting agency" for FCRA purposes?
In the situation that you describe -- an attorney checks criminal records of consumers who apply for jobs with a client -- the attorney's activities appear to meet the definition of a CRA so long as records checks are a "regular" course of action on the part of the attorney and the attorney directly or indirectly charges for this service. The information relates, at the very least, to the "character" and "general reputation" of applicants for employment, and thus qualifies as consumer report information since it is provided for one of the purposes specified in the definition of "consumer report" in Section 603(d) of the FCRA. The fact that the information is "public record" information makes no difference. By collecting this information from public record sources the attorney is, at the very least, "assembling" the information and therefore meets the definitional requirements of a consumer reporting agency in Section 603(f) of the FCRA. In effect, the attorney is functioning as an employment screening agency. Accordingly, the attorney should ensure that his or her activities comply with the FCRA.(2)
3. If a commercial service provides a consumer report containing information that is more than seven years old, may the employer receiving the information take action based on the information.
Except for records of criminal convictions, which may now be reported without any time limitation,(3) Section 605 of the FCRA prohibits consumer reporting agencies from providing adverse information that is more than seven years old (ten years in the case of bankruptcies) for employment purposes where the annual salary is less than $75,000. There are no restrictions upon reporting adverse information for jobs involving salaries of more than $75,000.
A consumer reporting agency which provides adverse information that antedates the report by more than seven years for positions covered by the Section 605 reporting prohibition may violate the FCRA. In addition, the agency may be liable to the consumer for damages if the release of the information is negligent or wilful. There is, however, no FCRA prohibition upon the use of information that is more than seven years old. Accordingly, an employer may rely upon adverse information that is more than seven years old.(4)Although the employer may take adverse action based upon the information, we note that the employer must comply with the provisions of the FCRA that apply to the "use" of information from consumer reporting agencies, such as Sections 604(b) and 615(a).
I hope that this information is useful. The views that are expressed above are views of the Commission's staff and do not necessarily reflect the views of the Commission or of any individual Commissioner.
Division of Financial Practices
1. The FCRA is concerned with, inter alia, the accuracy of information being reported by consumer reporting agencies. Public-record source information may be inaccurate, or errors may occur in the transcription of the information by a CRA. In either case, it is important for the consumer to know that inaccurate information is being disseminating by a CRA so that he or she may take steps to correct the information.
2. An attorney may, of course, assist a client by accompanying the client's employees to the courthouse and showing the employees how to research court records. In this situation, the actual search is done by the client's employees and, consequently, is exempt from coverage by the FCRA.
3. The recently enacted "Consumer Reporting Employment Clarification Act of 1998," Pub. L. No. 105-347, amended Section 605 of the FCRA to eliminate any restrictions on the reporting of criminal convictions.
4. Comment 605-5 of the Commission's Commentary on the FCRA, 16 C.F.R. § 600 App., 55 Fed. Reg. 18804, 18817 (May 4, 1990)