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Sunday, June 21, 2009

15 U.S.C. 1681c-1

Today, I begin my explanation of 15 U.S.C. 1681c-1 of the Fair Credit Reporting Act.

"15 U.S.C. 1681c-1. Identity theft prevention; fraud alerts and active duty alerts.

(a) One-call Fraud Alerts

(1) Initial alerts. Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who asserts in good faith a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, a consumer reporting agency described in section 603(p) [15 U.S.C. 1681a(p)] that maintains a file on the consumer and has received appropriate proof of the identity of the requester shall --

(A) include a fraud alert in the file of that consumer, and also provide that alert along with any credit score generated in using that file, for a period of not less than 90 days, beginning on the date of such request, unless the consumer or such representative requests that such fraud alert be removed before the end of such period, and the agency has received appropriate proof of the identity of the requester for such purpose; and

(B) refer the information regarding the fraud alert under this paragraph to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f)."

[This section requires the consumer reporting agency to report a fraud alert as part of a consumer's credit report for 90 days after the request for the fraud alert is made, assuming the consumer reporting agency receives sufficient proof of the identity of the person requesting the fraud alert. The person requesting the fraud alert must have a good faith suspicion that he or she is either a fraud victim or is about to become a fraud victim. This is the problem with the way LifeLock used to do business since it requested fraud alerts for all its customers, regardless of whether they were either fraud victims or thought they were about to be fraud victims.

The consumer reporting agency that receives the request for a fraud alert must also relay the fraud alert to the other consumer reporting agencies.]

"(2) Access to free reports. In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant ot this subsection, the consumer reporting agency shall --

(A) disclose to the consumer that the consumer may request a free copy of the file of the consumer pursuant to section 612(d); and

(B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A)."

[This subsection requires the consumer reporting agency to tell the consumer that requests a fraud alert that he or she is entitled to a free copy of his or her credit file (i.e. his or her credit report) and provide all disclosures required by section 609 (which we will get to eventually). Oddly enough, I don't think I have ever seen a credit bureau tell a consumer who requested a fraud alert that he can have a free credit report.]

"(b) Extended Alerts

(1) In general. Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who submits an identity theft report to a consumer reporting agency described in section 603(p) that maintains a file on the consumer, if the agency has received appropriate proof of the identity of the requester, the agency shall --

(A) include a fraud alert in the file of that consumer, and also provide that alert along with any credit score generated in using that file, during the 7-year period beginning on the date of such request, unless the consumer or such representative requests that such fraud alert be removed before the end of such period and the agency has received appropriate proof of the identity of the requester for such purpose;

(B) during the 5-year period beginning on the date of such request, exclude the consumer from any list of consumers prepared by the consumer reporting agency and provided to any third party to offer credit or insurance to the consumer as part of a transaction that was not initiated by the consumer, unless the consumer or such representative requests that such exclusion be rescinded before the end of such period; and

(C) refer the information regarding the extended fraud alert under this paragraph to each of the other consumer reporting agencies described in section 603(p), in accordance with procedures developed under section 621(f)."

[This section requires the consumer reporting agency to add a fraud alert to a consumer's credit report for 7 years if the consumer requests it and provides an identity theft report. The credit bureau must also remove the consumer's name for five years from any list of consumers prepared by the credit bureau and provided to a third party regarding an offer of credit or insurance.]

"(2) Access to free reports. In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant to this subsection, the consumer reporting agency shall --

(A) disclose to the consumer that the consumer may request 2 free copies of the file of the consumer pursuant to section 612(d) during the 12-month period beginning on the date on which the fraud alert was included in the file; and

(B) provide to the consumer all disclosures required to be made under section 609, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A)."

[Subsection (2) requires the credit bureau who added a fraud alert regarding the consumer to tell the consumer that he or she is entitled to two free credit reports during the first 12 months of the fraud alert. Again, I have never seen a credit bureau comply with this section.]

I will continue my explanation of 15 U.S.C. 1681c-1 with subsection (c) in part 2.

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