Consumer Reports and Consumer Reporting Agencies (CRAs) under the FCRA

1. Definition of Consumer Reports:

• A consumer report is any written, oral, or other communication of any information by a consumer reporting agency that bears on a consumer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living. This information is used or expected to be used for the purpose of:
  • Granting credit
  • Employment purposes
  • Underwriting insurance
  • Determining eligibility for licenses or other legal rights, or
  • Any other legitimate business need in accordance with the FCRA.

2. Definition of Consumer Reporting Agencies (CRAs):

• CRAs, often known as credit bureaus, are entities that gather and disseminate information about consumers. The FCRA defines a CRA as any person or entity which, for monetary fees or dues, regularly engages in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.

3. Types of CRAs:

• While the major credit bureaus (Equifax, Experian, and TransUnion) are the most commonly recognized CRAs, the FCRA's definition also encompasses specialty agencies that provide information related to:
  • Check writing histories
  • Medical records
  • Rental history records, and
  • Employment history.

4. Responsibilities of CRAs:

• Accuracy: CRAs are required to maintain reasonable procedures to ensure the accuracy of the information contained in the consumer reports they produce.

• Disputed Information: If a consumer disputes the accuracy or completeness of any information in their report, the CRA must investigate the dispute (usually within 30 days) unless it determines the dispute to be frivolous.

• Removal of Outdated Information: Negative information generally must be removed from consumer reports after seven years, though there are exceptions (like bankruptcies, which can remain for up to ten years).

• Limitations on Providing Reports: CRAs may not provide consumer reports to parties that do not have a permissible purpose (e.g., granting credit, employment, insurance underwriting).

5. Consumers' Rights Regarding CRAs:

• Disclosure: Every consumer has a right to know the contents of their file with a CRA, and is entitled to a free report from each of the major CRAs once every 12 months.

• Correct Inaccuracies: Consumers have the right to dispute and correct inaccuracies in their report.

• Opt-Out: Consumers have the right to opt out of unsolicited offers of credit and insurance based on information in their report.

• Identity Theft Protections: Consumers have rights regarding fraud and identity theft, including placing alerts on their credit files.

6. Regulatory Oversight:

• The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) share responsibilities for overseeing and enforcing the FCRA’s provisions relating to CRAs.