Yesterday, I began explaining the provisions of 15 U.S.C. 1681d of the Fair Credit Reporting Act. This post will complete that explanation, starting with subsection (d) of 15 U.S.C. 1681d.
"(d) Prohibitions
(1) Certification. A consumer reporting agency shall not prepare or furnish investigative consumer report unless the agency has received a certification under subsection (a)(2) from the person who requested the report."
[Or unless the CRA has reasonable procedures, followed or not, to this effect. See part 1 of 1681d's explanation for the reason why.]
"(2) Inquiries. A consumer reporting agency shall not make an inquiry for the purpose of preparing an investigative consumer report on a consumer for employment purposes if the making of the inquiry by an employer or prospective employer of the consumer would violate any applicable Federal or State equal employment opportunity law or regulation."
[I do not think this is referring to the inquiry section found at the bottom of most credit reports. I believe this section actually refers to "inquiries" that occur as part of the process of gathering the information needed to prepare the investigative report. So any such investigation that would violated Federal or State EEOC laws would is prohibited.]
"(3) Certain public record information. Except as otherwise provided in section 613 [1681k], a consumer reporting agency shall not furnish an investigative consumer report that includes information that is a matter of public record and that relates to an arrest, indictment, conviction, civil judicial action, tax lien, or outstanding judgment, unless the agency has verified the accuracy of the information during the 30-day period ending on the date on which the report is furnished."
[This is an interesting subsection. It requires the CRA to investigate, or have investigated within the last 30 days before the investigative consumer report is furnished to the user, the accuracy of any arrests, indictments, convictions as well as lawsuits, tax liens or outstanding judgments. Apparently, it does not include bankruptcies or satisfied judgments. So if the CRA has maintained an investigative report on a consumer that includes the above types of public record information, the CRA must re-verify that information in the thirty day window before providing the investigative consumer report to the user.]
"(4) Certain adverse information. A consumer reporting agency shall not prepare or furnish an investigative consumer report on a consumer that contains information that is adverse to the interest of the consumer and that is obtained through a personal interview with a neighbor, friend, or associate of the consumer or with another person with whom the consumer is acquainted or who has knowledge of such item of information unless
(A) the agency has followed reasonable procedures to obtain confirmation of the information, from an additional source that has independent and direct knowledge of the information; or
(B) the person interviewed is the best possible source of the information."
[Basically, a provision to keep out unsubstantiated rumor and trash talk. Unless the person providing the rumor or trash talk is the best possible source of such trash talk.]
This concludes 1681d. I will move on to explaining 15 U.S.C. 1681e soon.
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Showing posts with label 1681d. Show all posts
Showing posts with label 1681d. Show all posts
October 13, 2009
October 12, 2009
Part one of explanation of 15 U.S.C. 1681d
Today I finally get back to disecting and explaining each section of the Fair Credit Reporting Act. I completed my explanation of 15 U.S.C. 1681c-2 a while back, so I will move on to 15 U.S.C. 1681d, which deals with investigative consumer reports.
"1681d. Disclosure of investigative consumer reports.
(a) Disclosure of fact of preparation. A person may not procure or cause to be prepared an investigative consumer report on any consumer unless
(1) it is clearly and accurately disclosed to the consumer that an investigative consumer report including information as to his character, general reputation, personal characteristics and mode of living, whichever are applicable, may be made, and such disclosure
(A) is made in a writing mailed, or otherwise delivered, to the consumer, not later than three days after the date on which the report was first requested, and
(B) includes a statement informing the consumer of his right to request the additional disclsoures provided for under subsection (b) of this section and the written summary of the rights of the consumer prepared pursuant to section 609(c) [1681g]; and
(2) the person certifies or has certified to the consumer reporting agency that
(A) the person has made the disclosures to the consumer required by paragraph (1); and
(B) the person will comply with subsection (b)."
[First, this section only applies to investigative consumer reports, not regular ol' generic credit reports. Subsection (a) requires a user of a investigative consumer report (i.e. the person requesting that the investigative consumer report be prepared by the CRA - this could be anyone with a permissible purpose to obtain an investigative consumer report, such as a potential employer) to disclose in writing to the consumer within 3 days of the request for the investigative report the fact that an investigative consumer report may be made about the consumer and also inform the consumer of his rights under 1681d(b), which I will get to in a moment, and provide the written summary of rights required by 1681g, which at my current pace I won't get to in a long while.
Subsection (a)(2) requires to user to certify to the CRA preparing the investigative report that the user has made the (a)(1) disclosures to the consumer and will comply with 1681d(b). Speaking of (b), here it is.]
"(b) Disclosure on request of nature and scope of investigation. Any person who procures or causes to be prepared an investigative consumer report on any consumer shall, upon written request made by the consumer within a reasonable period of time after the receipt by him of the disclosure required by subsection (a)(1) of this section, make a complete and accurate disclosure of the nature and scope of the investigation requested. This disclosure shall be made in a writing mailed, or otherwise delivered, to the consumer not later than five days after the date on which the request for such disclosure was received from the consumer or such report was first requested, whichever is the later."
[This provision gives the consumer the right to request information about the nature and scope of the investigation being requested by the user. The consumer must request this information within a reasonable period of time after receiving the 1681d(a)(1) notice that the investigative consumer report has been requested. The section does not define what a "reasonable period of time" is. Upon receipt of the request, which must be in writing, the user has until the longer of 5 days from when it first requested the investigative report or 5 days from when it received the request from the consumer requesting the nature and scope of the investigation to provide the "complete and accurate" dislcosure of the nature and scope of the investigation to the consumer.]
"(c) Limitation on liability upon showing of reasonable procedures for compliance with provisions. No person may be held liable for any violation of subsection (a) or (b) of this section if he shows by a preponderance of the evidence that at the time of the violation he maintained reasonable procedures to assure compliance with subsection (a) or (b) of this section."
[This is a pretty crappy portion of 1681d. It should be labeled "what one hand giveth, the other taketh away". Read literally, a user can completely avoid doing what it is required by 1681d(a) and 1681(b) as long as it "maintains" reasonable procedures to comply with these subsections. This contrasts with at least one other section of the FCRA, which requires that reasonable procedures be "followed", not just maintained. So, if a court strictly applies this "limitation on liability", all the user must do to avoid its duties is to "maintain", but not actually follow or use, reasonable procedures to comply with 1681(a) and (b). Crazy. Hopefully, no court is that naive.]
I will conclude my explanation of 1681d in the near future.
"1681d. Disclosure of investigative consumer reports.
(a) Disclosure of fact of preparation. A person may not procure or cause to be prepared an investigative consumer report on any consumer unless
(1) it is clearly and accurately disclosed to the consumer that an investigative consumer report including information as to his character, general reputation, personal characteristics and mode of living, whichever are applicable, may be made, and such disclosure
(A) is made in a writing mailed, or otherwise delivered, to the consumer, not later than three days after the date on which the report was first requested, and
(B) includes a statement informing the consumer of his right to request the additional disclsoures provided for under subsection (b) of this section and the written summary of the rights of the consumer prepared pursuant to section 609(c) [1681g]; and
(2) the person certifies or has certified to the consumer reporting agency that
(A) the person has made the disclosures to the consumer required by paragraph (1); and
(B) the person will comply with subsection (b)."
[First, this section only applies to investigative consumer reports, not regular ol' generic credit reports. Subsection (a) requires a user of a investigative consumer report (i.e. the person requesting that the investigative consumer report be prepared by the CRA - this could be anyone with a permissible purpose to obtain an investigative consumer report, such as a potential employer) to disclose in writing to the consumer within 3 days of the request for the investigative report the fact that an investigative consumer report may be made about the consumer and also inform the consumer of his rights under 1681d(b), which I will get to in a moment, and provide the written summary of rights required by 1681g, which at my current pace I won't get to in a long while.
Subsection (a)(2) requires to user to certify to the CRA preparing the investigative report that the user has made the (a)(1) disclosures to the consumer and will comply with 1681d(b). Speaking of (b), here it is.]
"(b) Disclosure on request of nature and scope of investigation. Any person who procures or causes to be prepared an investigative consumer report on any consumer shall, upon written request made by the consumer within a reasonable period of time after the receipt by him of the disclosure required by subsection (a)(1) of this section, make a complete and accurate disclosure of the nature and scope of the investigation requested. This disclosure shall be made in a writing mailed, or otherwise delivered, to the consumer not later than five days after the date on which the request for such disclosure was received from the consumer or such report was first requested, whichever is the later."
[This provision gives the consumer the right to request information about the nature and scope of the investigation being requested by the user. The consumer must request this information within a reasonable period of time after receiving the 1681d(a)(1) notice that the investigative consumer report has been requested. The section does not define what a "reasonable period of time" is. Upon receipt of the request, which must be in writing, the user has until the longer of 5 days from when it first requested the investigative report or 5 days from when it received the request from the consumer requesting the nature and scope of the investigation to provide the "complete and accurate" dislcosure of the nature and scope of the investigation to the consumer.]
"(c) Limitation on liability upon showing of reasonable procedures for compliance with provisions. No person may be held liable for any violation of subsection (a) or (b) of this section if he shows by a preponderance of the evidence that at the time of the violation he maintained reasonable procedures to assure compliance with subsection (a) or (b) of this section."
[This is a pretty crappy portion of 1681d. It should be labeled "what one hand giveth, the other taketh away". Read literally, a user can completely avoid doing what it is required by 1681d(a) and 1681(b) as long as it "maintains" reasonable procedures to comply with these subsections. This contrasts with at least one other section of the FCRA, which requires that reasonable procedures be "followed", not just maintained. So, if a court strictly applies this "limitation on liability", all the user must do to avoid its duties is to "maintain", but not actually follow or use, reasonable procedures to comply with 1681(a) and (b). Crazy. Hopefully, no court is that naive.]
I will conclude my explanation of 1681d in the near future.
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