Advisory Opinion to Tabler (10-27-98)

October 27, 1998

The Reverend John C. Tabler
30 Bannington Drive
Upper Marlboro, Maryland 20774

Re: Section 603(d)(1)(A) of the Fair Credit Reporting Act

Dear Reverend Tabler:

This letter responds to your letter of June 15, 1998 asking for the staff's opinion as to whether Section 603(d)(1)(A) of the Fair Credit Reporting Act ("FCRA") prohibits a credit grantor from providing a consumer reporting agency ("CRA") with information regarding an individual's performance on a corporate credit card account.

Your letter suggests that under Section 603(d)(1) a credit grantor could not report any information regarding a consumer's performance on a corporate card. We disagree. Section 603(d) defines a "consumer report"; it imposes no restrictions on the information that a credit grantor may report and a CRA may collect. We do not believe that Section 603(d) is relevant to the issue you raise.

The FCRA, however, does contain specific restrictions upon the information that may be included in an individual's consumer report. In particular, the FCRA imposes obligations on both CRAs and credit grantors concerning the accuracy and completeness of information in an individual's consumer report. Whether or not a CRA may, as part of a consumer report, include information about an individual's payment history on a corporate credit card depends upon the individual's legal obligations under the card agreement or general responsibility for payment of incurred charges.

Although certain corporate credit accounts may not impose any obligations on an employee, it is also possible that an employee may have some personal liability for the use of a corporate credit account or may be responsible for payment prior to being reimbursed by the employer. In these instances, an employee's performance on the corporate credit card could relate to credit worthiness and could be a factor in an eligibility determination. As such, the information could be included in a consumer report. On the other hand, if an individual has no legal obligation or responsibility for ensuring payment, it would arguably be inaccurate for a CRA or a credit grantor to report a delinquency on the card as an obligation of the consumer.

Without knowing the underlying facts of your situation, it is not possible to evaluate the applicability of the FCRA to your situation. However, as a general matter, under Section 611, CRAs must investigate consumer disputes regarding inaccurate or incomplete information in the CRA's file on the consumer, and must also report the dispute to the entity that furnished the disputed information to the CRA. Upon receiving notice, under Section 623(b), a furnisher, such as the issuer of the corporate credit card in your situation, is required to investigate the dispute and report its findings to the CRA. When it has completed its reinvestigation, Section 611 requires the CRA to notify the consumer of the results of the reinvestigation. Your letter implies that, in this instance, you notified the CRAs of your dispute, who in turn notified the corporate card issuer. It is unclear from your letter to what extent the CRA and the card issuer investigated your dispute, what information you supplied to them, and what action was ultimately taken and why.

If your dispute was investigated and the information was found to reflect accurately a personal obligation (under the reasoning stated above), the inclusion of this information in your credit file would be proper. However, if any of these entities failed to comply with their obligations under Section 611 and Section 623, they could be liable under Section 616 and Section 617 of the FCRA. Enclosed is a copy of our "Fair Credit Reporting" brochure that explains more generally the rights provided to consumers by the FCRA.

The views set forth in this informal opinion letter are those of the staff, and are not binding on the Commission.

Sincerely,

Jonathan A. Smollen
Attorney