FCRA Requirements Related to Consumer Consent

1. General Rule on Consent: The FCRA mandates that before a Consumer Reporting Agency (CRA) can release a consumer's report, there must be a permissible purpose. In many scenarios, particularly those outside of standard credit transactions or court orders, consumer consent is required.

2. Employment-Related Access:

• Written Consent: If an employer, or potential employer, wishes to obtain a credit report on an individual, they must first obtain that individual's explicit written consent.

• Disclosure: Before taking any adverse action based on the report (like denying a job application), the employer must provide the applicant with a copy of the report and a summary of their rights under the FCRA.

3. Marketing and Promotional Access:

• While CRAs can provide limited credit information to third parties for unsolicited offers of credit or insurance (known as "prescreening"), consumers have the right to opt out of these offers. If a consumer chooses to opt out, their consent would be needed for such offers in the future.

4. Medical Information:

• A CRA cannot furnish medical information for employment purposes without the consumer's explicit consent.

Definitions under the FCRA:

Consumer:

• A consumer is an individual. In the context of the FCRA, it generally refers to a person whose credit history or other personal information is the subject of a report generated by a CRA.

Consumer Reporting Agency (CRA):

• This refers to any entity which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly assembles or evaluates consumer credit information (or other information on consumers) for the purpose of furnishing consumer reports to third parties. Well-known examples include Equifax, Experian, and TransUnion, but it also encompasses specialized agencies (like those focusing on rental histories or medical records).

Furnisher:

• A furnisher is typically an entity that provides information about consumers to CRAs. Common furnishers include banks, credit card issuers, and other lenders.

User of the Report:

• A user is typically a business that is assessing a consumer report about a person, provided by a CRA, for the purpose of making decisions, such as granting credit, hiring, or insuring.

In essence, the FCRA emphasizes the importance of consumer consent in various scenarios to protect the privacy rights of individuals. Obtaining and documenting proper consent not only respects consumer rights but also shields businesses from potential legal pitfalls.