FCRA and Reg V: Requirements for users of consumer reports

Question 1

Are consumer reporting agencies required to provide free credit reports?

Answer 1

Yes, they must annually allow consumers to receive their credit report free of charge.

Question 2

When and how must a consumer receive an adverse action notice (under FCRA)?

Answer 2

When information from a consumer reporting agency contributes (in whole or in part) to the adverse action decision, then the user must give an oral, written, or electronic disclosure to the consumer .

Question 3

What are considered “adverse actions” under FCRA?

Answer 3

1. Denial of consumer credit or insurance
2. Refusal to open a checking account
3. An adverse change in terms of consumer credit or insurance, such as refusing to renew a policy, credit card, or line of credit
4. The denial of employment

Question 4

What must an adverse action notice disclose when info from a credit reporting agency was used to make the adverse decision?

Answer 4

The adverse action notice should contain:
1. The name, address and phone number of the consumer reporting agency
2. A statement that the consumer reporting agency did not make the decision nor can it speak to the reasons for adverse action
3. A statement that informs the consumer of the right to obtain a free copy of the consumer credit report within 60 days
4. A statement that informs the consumer of the right to dispute the accuracy or completeness of any information contained in the consumer credit report

Question 5

How long does a consumer have to request the information that was obtained from a third party or affiliate that contributed to the adverse action?

Answer 5

Within 60 days from transmittal of the notice

Question 6

What are the requirements when a creditor uses a consumer reporting agency for credit and insurance solicitations based on prescreened lists?

Answer 6

1. The information must be limited to name, address, consumer identifier and other limited information
2. The solicitation from a prescreen list must be a firm offer of credit or insurance to the qualifying consumers.
3. The creditor must maintain the selection criteria that was used to determine who will receive the firm offer of credit for 3 years
4. The solicitation must include an option for the consumer to opt-out of future prescreens