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Monday, June 15, 2009

15 U.S.C. 1681c - Part 1

In this post, I begin to explain 15 U.S.C. 1681c of the Fair Credit Reporting Act, which lists what types of information the consumer reporting agencies are prohibited from including in credit reports.

"15 U.S.C. 1681c. Requirements relating to information contained in consumer reports.

(a) Information excluded from consumer reports. Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:

(1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years."

[Thus, any bankruptcy that is older than 10 years is considered obsolescent and may not be included on a credit report.]

"(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period."

[Therefore, any judgment, lawsuit or criminal record item can only stay on your credit report for seven years or, if the statute of limitations is longer than seven years (most are not), it can stay on for the length of the statute of limitations.]

"(3) Paid tax liens which, from date of payment, antedate the report by more than seven years."

[This is an interesting one. Paid tax liens can stay on your report for seven years from the date of payment. Unpaid tax liens (being adverse items as identified in 1681c(a)(5) can stay on your credit report seven years from the date the lien is created. Thus, if its already been seven years since the tax lien was created, it is potentially a bad idea to pay the tax lien because that can start the seven years all over again. Also, note that it says "paid" tax lien. If the tax lien is released without being paid (i.e. if the tax lien was simply released for some reason other than payment), then the seven years does not start anew. Instead, the tax lien is obsolete seven years after the date it was created, not after it was released (if it was not paid).]

"(4) Accounts placed for collection or charged off to profit and loss which antedate the report by more than seven years."

[Therefore charge offs and collections can only stay on your credit report for seven years from the date the account was originally charged off. This date does not change simply because the account change hands (i.e. when it is sold to a collection agency for debt collection). The date of charge off stays the same and thus the date the collection is due to fall off your credit report should not change. Some debt collectors engage in the illegal act of reaging the debt, which means they change the date of last activity (the industry word for the date the account was charged off) and thus allow the collection to stay on the consumer's credit report longer (and as a result increase their chances of actually collecting the debt). Reaging the debt violates the Fair Credit Reporting Act and is the subject of multiple lawsuits each year.]

"(5) Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years."

[This is the catchall that requires all adverse items of information to be off the consumer's credit report no later than seven years after the information becomes adverse. So if a consumer is 30 days late on a bill and the account is marked with a 30 day late payment notation, that adverse item of information can only stay on the credit report for 7 years from the date that the account was 30 days late. The account itself can stay on the credit report for longer than 7 years, but after 7 years, the late payment must fall off the report.]

"(6) The name, address, and telephone number of any medical information furnisher that has notified the agency of its status, unless --

(A) such name, address, and telephone number are restricted or reported using codes that do not identify, or provide information sufficient to infer, the specific provider or the nature of such services, products, or devices to a person other than the consumer; or

(B) the report is being provided to an insurance company for a purpose rlating to engaging in the business of insurance other than property and casualty insurance."

[This means that a company that provides medically related information can not be listed with its name, address or telephone number unless such are disguised by codes or if the report is being provided to an insurance company for the business of insurance (rather than collecting a debt or about a job application) other than property or casualty insurance.]

I will continue with the explanation of 15 U.S.C. 1681c in part 2.

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