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Wednesday, December 2, 2009

Part 2 of explanation of 15 U.S.C. 1681e

For some reason this did not post yesterday as it was scheduled to do, so here it is:

This is part 2 of my explanation of 15 U.S.C. 1681e.  For part of the explanation, see here - http://fcralawyer.blogspot.com/2009/11/part-1-of-explanation-of-15-usc-1681e.html

"(d)  Notice to Users and Furnishers of Information

(1)  Notice requirement.   A consumer reporting agency shall provide to any person

(A)  who regularly and in the ordinary course of business furnishes information to the agency with respect to any consumer; or

(B)  to whom a consumer report is provided by the agency;

a notice of such person's responsibilities under this title."

[This section requires the credit bureaus to provide a notice (the content of which is prescribed by the FTC per (d)(2)) regarding their responsibilities to two types of entities - furnishers and users.  Furnishers are the companies that furnish information to the credit bureaus for inclusion on consumers' credit reports (i.e. the banks, credit card companies, collection agencies, etc. whose accounts make up the consumers' credit histories).  Users are the companies that buy consumers' credit reports from the credit bureaus, assuming they have a permissible purpose to gain access to the report.  A company can be both a user and furnisher regarding a consumer, although not at the same time.)

"(2)  Content of notice.  The Federal Trade Commission shall prescribe the content of notices under paragraph (1), and a consumer reporting agency shall be in compliance with this subsection if it provides a notice under paragraph (1) that is substantially similar to the Federal Trade Commission prescription under this paragraph."

[This section defines what the credit bureaus must include in the notices to furnishers and users required by (d)(1) by simply saying that the FTC will prescribe the content and the credit bureaus' notices must be substantially similar to the FTC prescribed content.]

"(e)  Procurement of Consumer Report for Resale

(1)  Disclosure.  A person may not procure a consumer report for purposes of reselling the report (or any information in the report) unless the person discloses to the consumer reporting agency that originally furnishes the report

(A)  the identity of the end-user of the report (or information); and

(B)  each persmissible purpose under section 604 [Section 1681b] for which the report is furnished to the end-user of the report (or information)."

[This section applies to resellers of credit reports.  Before it can resell the report (or any information in the report), the company reselling the report must identify who the report is ultimately being sold to and provide each and every permissible purpose used in obtaining the credit report.  These disclosures are required to be made to the credit bureaus selling the report to the reseller, not to the consumer whose information is being sold.  Although I have seen on at least one credit bureaus' reports to consumers that they list the end user who ultimately gets the resold report as part of the inquiry.]

"(2)  Responsibilities of procurers for resale.  A person who procures a consumer report for purposes of reselling the report (or any information in the report) shall

(A)  establish and comply with reasonable procedures designed to ensure that the report (or information) is resold by the person only for a purpose for which the report may be furnished under section 604 [Section 1681b], including by requiring that each person to which the report (or information) is resold and that resells or provides the report (or information) to any other person

(i)  identifies each end user of the resold report (or information);

(ii)  certifies each purpose for which the report (or information) will be used; and

(iii)  certifies that the report (or information) will be used for no other purpose; and

(B)  before reselling the report, make reasonable efforts to verify the identifications and certifications made under subparagraph (A)."

[This section simply attempts to keep resold reports from being sold for impermissible purposes.  It requires the reseller to identify the ultimate end user of the credit report, certify each permissible purpose used to obtain the credit report and certify that the credit report won't be used for any other purpose (permissible or not).]

"(3)  Resale of consumer report to a federal agency or department.  Notwithstanding paragraph (1) or (2), a person who procures a consumer report for purposes of reselling the report (or any information in the report) shall not disclose the identity of the end-user of the report under paragraph (1) or (2) if -

(A)  the end user is an agency or department of the United States Government which procures the report from the person for purposes of determining the eligibility of the consumer concerned to receive access or continued access to classified information (as defined in section 604(b)(4)(E)(i)); and

(B)  the agency or department certifies in writing to the person reselling the report that nondisclosure is necessary to protect classified information or the safety of persons employed by or contracting with, or undergoing investigation for work or contracting with the agency or department."

[This section exempts from the end user disclosure requirements of (d)(1) and (2) where the end user is a U.S. agency or department and the report is used for determing whether the consumer should get or continue to have access to classified information and where the agency or department certifies that nondisclosure is required to protect any classified information or safety of employees of the agency or department.]

This concludes my explanation of 15 U.S.C. 1681e.

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