Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) requires each of the nationwide consumer reporting companies — Equifax, Experian, and TransUnion — to provide you with a free copy of your credit report, at your request, once every 12 months. The Federal Trade Commission (FTC), the nation's consumer protection agency, has prepared a brochure, Your Access to Free Credit Reports, explaining your rights under the FCRA and how to order a free annual credit report.

A credit report includes information on where you live, how you pay your bills, and whether you've been sued, arrested, or filed for bankruptcy. Nationwide consumer reporting companies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

You can order your free annual credit report online at annualcreditreport.com, by calling 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.


Credit Repair Organizations Act Overview

If you have bad credit, you may consider using a credit repair service to improve your credit. The truth is, a great number of these companies use dishonest and illegal methods to falsely enhance their customers' credit. Still, several credit repair services are nothing more than scams to trick consumers out of their hard-earned money.

The Credit Repair Organization Act was put in place to protect consumers from unscrupulous practices by organizations who claim to repair credit. The Act seeks to ensure that consumers who decide to use credit repair services are aware of their rights and are able to make an informed decision about choosing to pay a credit repair company.

A credit repair organization is any person or business who takes money in exchange for improving your credit.

Here are a few things credit repair organizations cannot legally do:

• Lie or advise you to lie about your credit history to your current or future creditors

• Alter your identity, e.g. get a new EIN1 (Employer Identification Number) or new identity, to try to get a new credit history

• Misrepresent the services they provide to you

• Ask you to pay for services before they have been provided

The law requires the organization to provide you with a disclosure called "Consumer Credit File Rights Under State and Federal Law" that lets you know your right to obtain a credit report and dispute inaccurate information on your own. You also have the right to sue an organization for violating the CROA.

Before the credit repair company can perform any services for you, you must be given a contract, you must sign the contract, and the 3-business day cancellation period must expire. The contract should include the following:

• Payment amount required

• A description of the services that will be performed to repair your credit

• An estimate of the time it will take to complete the services (or a date by which the services will be completed)

• A visible statement letting you know you can cancel the contract within 3 business days. You have the right to cancel a signed contract within 3 business days. The organization cannot charge you a fee for this cancellation as long as it's made within the specified time frame. Your contract should include a Notice of Cancellation form that you can fill out and return to cancel the contract.

The credit repair organization can't ask you to sign any kind of form waiving your rights under the CROA. Any waiver you sign is considered void and cannot be enforced by federal or state.

Organizations that violate the law can be sued for actual damages, punitive damages, and attorney's fees. You can report violations to the FTC, your state attorney general, and file suit in your state.

You have five years from the date the violation occurred (or the date you learned of the violation) to take action against the organization.

Fair Debt Collection Practices Act Overview

Debt collectors are infamous for some of their underhanded tactics used to collect debts from consumers. Many collectors get away with these tricks because consumers are not aware of the laws dictating how collectors can – and how they cannot – deal with consumers when collecting a debt.

The Fair Debt Collection Practices Act, better known as the FDCPA, is a federal law that governs the actions of parties acting as debt collectors for personal debts. Auto loans, home loans, medical bills, and credit card accounts are all considered personal debts.

Whenever one of your creditors uses a third-party to collect a debt, that third-party is obligated to follow the rules of the FDCPA. There are several things that a debt collector cannot do under the FDCPA. They cannot:

• Call you before 8am or after 9pm

• Call you at work, provided the debt collector is aware your employer does doesn't approve of these phone calls

• Harass, oppress, or abuse you

• Lie to you or falsely imply that you have committed a crime

• Use unfair practices in an attempt to collect a debt

• Conceal his or her identity on the phone

• Disregard a written request from you to cease further contact

The law also dictates how the debt collector must act when communicating with a person other than the debt collector. The collector is prohibited from giving out information pertaining to your debt to anyone but you or your spouse. In fact, they are not allowed to tell the caller that you owe a debt.

Debt collectors are not allowed to communicate via post card or use any kind of symbol or language on an envelope that indicates they are a debt collector. Once the debt collector learns you are represented by an attorney – and has the contact information for the attorney – the debt collector can only communicate with the attorney.

Debt collectors are prohibited from using any form of harassment or abuse while attempting to collect abuse. They cannot threaten violence against the debtor, their reputation, or their property. In addition, debt collectors cannot use obscene or profane language when communicating with the debtor via phone or through mail. Collection agencies and their collectors cannot publish any kind of listing of consumers that have not paid debt, except to a consumer reporting agency.

If your rights under the FDCPA have been violated, you have one year from the date of the violation to file a lawsuit against the debt collector. You could receive up to $1,000 in addition to actual damages and attorney fees.

Credit Cardholder Bill of Rights
The Credit Cardholders' Bill of Rights takes a moderate and balanced approach to reforming major credit card industry abuses and improving consumer protections without resorting to price controls, rate caps, or fee setting.

1. Cardholders Deserve Protections against Arbitrary Interest Rate Increases.

• Requires card companies give cardholders 45 days notice of any interest rate increases.

• Gives cardholders the right to cancel their card and pay off their existing balance at the existing interest rate and repayment schedule if they get hit with an interest rate hike; gives cardholders 3 billing cycles after the rate increase to say no to these new terms.

• Prevents card companies from retroactively increasing interest rates on the existing balance of a cardholder in good standing for reasons unrelated to the cardholder's behavior with that card (the so-called "universal default" rate increase).

• Prohibits card companies from arbitrarily changing the terms of their contract with a cardholder, banning the socalled practice of "any-time, any-reason re-pricing."

2. Cardholders Who Pay on Time Should Not Be Penalized.

• Prohibits card companies from charging interest on debt that is paid on time during a grace period. This prevents the so-called "double-cycle billing" practice.

• Prohibits card companies from slapping fees on the remaining interest-only balance of a cardholder who has paid his/her bill on time.

3. Cardholders Should Be Protected from Due Date Gimmicks.

• Gives cardholders time to pay their bills by requiring card companies to mail billing statements 25 calendar days before the due date (14 days is the current minimum).

• Requires that payments made before 5 p.m. EST on the due date are considered timely.

• Directs card companies to provide on every statement, a phone and internet address that a cardholder can access for payoff balances.

• Prohibits card companies from charging late fees when a cardholder presents proof of mailing his/her bill within 7 days of the due date.

4. Cardholders Should Be Protected from Misleading Terms.

• Prevents card companies from using terms such as "fixed rate" and "prime rate" in a misleading or deceptive manner by establishing single, set definitions of those terms.

• Gives cardholders who get pre-approved for a card the right to reject that card up until the moment they activate it without having their credit adversely impacted.

5. Cardholders Deserve the Right to Set Limits on Their Credit.

• Requires card companies to offer consumers the option of having a fixed credit limit that cannot be exceeded.

• Prevents card companies from charging over-the-limit fees on a cardholder with a fixed credit limit.

6. Card Companies Should Fairly Credit and Allocate Payments.

• Directs card companies to fairly allocate payments on balances at different interest rates. Many card companies currently require cardholders to pay off a lower interest rate balance first.

7. Card Companies Should Not Impose Excessive Fees on Cardholders.

• Limits the amount of "over-the-limit" fees card companies are allowed to charge to 3. Some card companies currently charge limitless fees for going over credit limits.

8. Vulnerable Consumers Should Be Protected From Fee-Heavy Subprime Credit Cards.

• Requires that all fees for subprime bad credit cards, whose total fixed fees over a year exceed 25 percent of the credit limit, be paid up front before the card is issued. These cards are generally targeted to vulnerable consumers.

9. Congress Should Provide Better Oversight of the Credit Card Industry.

• Improves existing data collection on industry profits, as well as card fees and rates; requires this information to be presented to Congress every year.

Fair Credit Billing Act (FCBA)
The law applies to "open end" credit accounts, such as credit cards, revolving charge accounts and overdraft checking accounts. It does not cover installment contracts. The FCBA settlement procedures apply only to disputes about "billing errors." For example: unauthorized charges. Federal law limits your responsibility for:

• unauthorized charges to $50;

• charges that list the wrong date or amount;

• charges for goods and services you didn't accept or weren't delivered as agreed;

• math errors;

• failure to post payments and other credits, such as returns;

• failure to send bills to your current address - provided you supply a change of address at least 20 days before the billing period ends;

• charges for which you ask for an explanation, or written proof of purchase along with a claimed error or request for clarification.

To take advantage of the law's consumer protections, you must:

• write to the creditor at the address given for "billing inquiries," not the address for sending your payments, and include your name, address, account number and a description of the billing error.

• send your letter so that it reaches the creditor within 60 days after the first bill containing the error was mailed to you.

The creditor must acknowledge your complaint in writing within 30 days after receiving it, unless the problem has been resolved. The creditor must resolve the dis- pute within two billing cycles (but not more than 90 days) after receiving your letter.

Fair and Accurate Credit Transaction Act (FACTA)

1. Introduction: The Fair and Accurate Credit Transaction Act of 2003 (FACTA) added new sections to the federal Fair Credit Reporting Act (FCRA, 15 U.S.C. 1681 et seq.), intended primarily to help consumers fight the growing crime of identity theft. Accuracy, privacy, limits on information sharing, and new consumer rights to disclosure are included in FACTA. (Pub. L. 108-159, 111 Stat. 1952)

2. Help for Identity Theft Victims: The crime of identity theft has continued at epidemic proportions. Several widely reported surveys on the number of identity theft victims were released as Congress went into final hearings on FCRA amendments. A shocking report released by the Federal Trade Commission in September 2003 estimated that approximately 10 million people were victims of identity theft in 2002 alone. In response to new findings about identity theft, Congress adopted a number of provisions aimed at prevention and help for victims. The FTC recently published a revised guide for identity theft victims which includes new FACTA provisions.

A. Free Reports: Consumer advocates have long encouraged individuals to monitor their credit reports as a way to detect identity theft. The standard advice was to request a copy of your credit report once a year from each of the three national credit bureaus: Experian, TransUnion, and Equifax. Until now, you usually had to pay up to $9.50 to get a copy of your report from each of these credit bureaus. Congress recognized the benefits of self-monitoring. It adopted a new rule that allows you a free copy of your credit report annually from each of the 'big three.'

Should I contact each credit bureau for my free report? No. The only way to get your free reports is through a centralized source, a combined effort by the three national bureaus. Free reports are available through a dedicated web site, www.annualcreditreport.com. You may order by telephone at ( 877) 322-8228 or by mail.

Am I still entitled to a free credit report if I am unemployed? Yes, and for other reasons as well. You can still get a free copy of your credit report if you certify to the credit reporting agency that:

	You are unemployed and intend to apply for employment in the 60-day period beginning on the date you make the certification.
	Or you receive public welfare assistance.
	Or you believe your file contains inaccurate information due to fraud.

FACTA also gives you new rights to a free credit report if you are a victim of identity theft.

In addition to free credit reports, FACTA gives you the right to one free report annually from a consumer reporting agency that compiles reports on employment, medical records, check writing, insurance, and housing rental history.

I live in one of the states that passed a law prior to FACTA giving residents free reports. Can I order an additional free credit report under my state's law? Yes. The seven states that have laws on the books giving their residents a free credit report annually are: Colorado, Georgia (two per year), Maine, Maryland, Massachusetts, New Jersey, and Vermont. If you live in one of these states, you can obtain a free report from each bureau annually under federal law and an additional free report under your state's law.

B. Fraud Alerts and Active Duty Alerts If you are the victim of identity theft, FACTA gives you the right to contact a credit reporting agency to flag your account. To place a fraud alert, you must provide proof of your identity to the credit bureau. The fraud alert is initially effective for 90 days, but may be extended at your request for seven years when you provide a police report to the credit bureaus that indicates you are a victim of identity theft. FACTA creates a new kind of alert, an active duty alert, that allows active duty military personnel to place a notation on their credit report as a way to alert potential creditors to possible fraud. While on duty outside the country, military members are particularly vulnerable to identity theft and lack the means to monitor credit activity. An active duty alert is maintained in the file for at least 12 months. If a fraud alert or active duty alert is placed on your credit report, any business that is asked to extend credit to you must contact you at a telephone number you provide or take other 'reasonable steps' to see that the credit application was not made by an identity thief. FACTA gives you the right to a free copy of your credit report when you place a fraud alert. With the extended alert (seven years), you are entitled to two free copies of your report during the 12-month period after you place the alert. New FACTA provisions also allow you to 'block' certain items on your credit report that resulted from identity theft. Like the fraud alert, 'blocking' was already an option for consumers in some states. With FACTA, Congress has made 'blocking' the national standard.

C. Truncation: Credit Cards, Debit Cards, Social Security Numbers Credit card receipts that include full account numbers and expiration dates are a gold mine for identity thieves. In some states, printing of the full account number is already prohibited. For the future, FACTA sets a national standard requiring truncation of credit card information. FACTA says credit and debit card receipts may not include more than the last five digits of the card number. Nor may the card's expiration date be printed on the cardholder's receipt. However, the effective date of this provision is a long way off, and there are a couple of loopholes:

	This section does not apply to receipts for which the sole means of recording a credit or debt card number is by handwriting or by an imprint or copy of the card.
	For machines in use before January 1, 2005, the merchant has three (3) years to comply.
	For machines in use after January 1, 2005, the merchant has one (1) year to comply.

Another FACTA section allows consumers who request a copy of their file to also request that the first 5 digits of their Social Security number (or similar identification number) not be included in the file.

D. Information Available to Victims For victims, obtaining copies of the imposter's account application and transactions is an important step toward regaining financial health. A business that provides credit or products and services to someone who fraudulently uses your identity must give you copies of documents such as applications for credit or transaction records. The business must also provide copies of documents to any federal, state, or local law enforcement agency you specify. To obtain account documentation, you must supply proof of your identity. The business may also ask you to provide a police report and an identity theft affidavit. You must also:

	Make your request in writing.
	Mail the request to the business at an address it specifies.
	If the business asks, include relevant information about dates and account numbers.

Are there reasons a business would not have to give me this information? Yes, there are some exceptions. A business does not have to provide this information if:

	There is not a "high degree of confidence" in your true identity.
	The request contains a misrepresentation of fact.
	The information is Internet navigational data or similar information about a person's visit to a web site or online service.

Can I sue a business for not turning information over to me? The business can be sued only by a government agency. And the business cannot be held civilly liable if it makes a "good faith" effort to comply.

E. Collection Agencies: A call from a collection agency is often the first sign of trouble for an identity theft victim. Under FACTA, if you are contacted by a collection agency about a debt that resulted from the theft of your identity, the collector must so inform the creditor. You are entitled to receive all information about this debt -- such as applications, account statements, late notices from the creditor -- that you would be entitled to see if the debt were actually yours. In addition, FACTA says that a creditor, once notified that the debt is the work of an identity thief, cannot sell the debt or place it for collection.

The FTC's guide for identity theft victims also includes information on how to deal with collection agencies.

F. Red Flags: Consumer advocates have long pointed out that consumers can only go so far in protecting against identity theft, and that much of the problem lies with lax procedures of credit issuers and other companies that use information from credit reports. A climate of easy credit has made some creditors far too willing to accept a change of address, a request for a replacement credit card, or reactivation of a dormant account. In adopting FACTA, Congress recognized that consumers are helpless to prevent identity theft if businesses ignore the events that signal a potential fraud. Thus, FACTA incorporates several provisions that require financial institutions, creditors, and other businesses that rely on consumer reports to detect and resolve fraud by identity theft. The so-called "red flags" and related sections of FACTA include:

• Red Flag Guidelines and requirements for credit and debit card issuers to assess the validity of a change of address request, (FACTA §114, FCRA §615(e)).

• Procedures to reconcile different consumer addresses. (FACTA §315, FCRA §605(h)(2)).

On July 8, 2008, the FTC announced an outreach program to explain the new red flags requirements to both affected businesses and consumers. As part of this initiative, the FTC has published a business alert to help affected companies prepare for the November 1, 2008, deadline. The FTC's business alert indicates that more detailed guidance will be forthcoming. In the meantime, the FTC has established a dedicated e-mail address to answer questions about the new red flags requirements. Questions may be sent to the agency at RedFlags @ ftc.gov
1. Red Flags: Businesses that use consumer reports, under the new rules, must adopt a plan to detect, prevent and mitigate identity theft. The plan must be approved by the company's board of directors or senior management. The rules identity certain signals of actual or attempted identity theft, but each company is left to establish plans based upon a risk assessment of its own operations. Signals identified by the agencies as warranting increased alert include:

• Consumer's notation on a credit report such as a fraud alert, active duty alert, or credit freeze.

• Unusual patterns in the consumer's use of credit, such as a recent increase in inquiries or new credit accounts, changes in the use of credit, or accounts closed.

• Suspicious documents that appear to be alerted, forged or reassembled. Or documents that include information that is inconsistent with the person applying for credit.

• Suspicious Social Security number (SSN), for example an SSN that has not been issued or is listed on the Social Security Administration's Death Master File. Another example would be one in which the SSN range does not match the date of birth or is the same SSN as provided by other persons opening an account.

• Suspicious address or phone number as follows: (a) the address or phone number is known to have been furnished on fraudulent applications; (b) the address either does not exist or is that of a mail drop or prison; (c) the phone number is invalid or associated with a pager or answering service; or (d) the address or phone number is the same or similar to information submitted by other persons opening accounts.

• Use of an account that has been inactive for a 'reasonably lengthy period of time.'

• Mail sent to the account holder is returned while transactions continue.

• Notice from the account holder or law enforcement that identity theft has occurred.

2. Change of Address with Request for Replacement Cards: A common practice among identity thieves is to notify a credit or debit card issuer of a change of address. Soon after the change of address notice, the thief asks the card issuer for replacement cards. Now, before a new or replacement card can be issued, card issuers must take steps to assess the validity of a change of address. This applies at least within the first 30 days after an address change notification. Extra steps are required whether the change of address notice comes directly from the consumer or from the Postal Service. An address change notice combined with a request for new or replacement cards means the card issuer must verify the address by contacting the cardholder. Card issuers are also free to adopt alternate procedures for verifying an address. The rule applies to debit and credit cards issued by a financial institution as well as payroll cards and recipients of a home equity loan if the cardholder is able to access the loan with a debit or credit card. Stored value or prepaid cards such as gift cards are not subject to this rule. Because an identity thief's use of a business card may affect an individual's personal credit rating, the rules equally cover cards issued for personal, household, family or business purposes.

3. Address Discrepancy in Credit Report: A consumer's attempt to open a new credit account or increase an existing line of credit almost certainly results in the use of a consumer report. Rental and employment applications may also trigger the request for a credit report. Under rules in place since December 1, 2004, credit bureaus must notify the creditor, landlord, employer or other requester if the address supplied by the consumer "substantially differs" from the address included in the bureau's files. As part of the new "red flags" rules, credit report users that receive an address discrepancy notice from a credit bureau must take additional steps to verify the identity of the person applying to open an account or rent a property. Financial institutions required to adopt Customer Identification Programs (CIP) by the USA PATRIOT Act, Pub.L. 107-56, are instructed to follow the CIP standards for verifying identity for purposes of this FACTA section. Others (such as employers and landlords) that are not subject to the CIP rules are encouraged to adopt similar practices. Once a financial institution verifies a customer's identity, the results may be reported back to the credit bureau. However, this additional step is required only if (1) a relationship is established with the consumer and (2) the financial institution regularly reports to the credit bureau.

G. Disposal of Consumer Reports: The practice known as 'dumpster diving' provides identity thieves with a treasure trove of personal data. Irresponsible information disposal by businesses has been cited in numerous instances of fraud. Now under new FACTA provisions consumer reporting agencies and any business that uses a consumer report must adopt procedures for proper document disposal. The FTC, the federal banking agencies, and the National Credit Union Administration (NCUA) have published final regulations to implement the new FACTA Disposal Rule. The FTC's disposal rule applies to consumer reporting agencies as well as individuals and any sized business that uses consumer reports. The FTC lists the following as among those that must comply with the rule:

• Lenders

• Insurers

• Employers

• Landlords

• Government agencies

• Mortgage brokers

• Automobile dealers

• Attorneys and private investigators

• Debt collectors

• Individuals who obtain a credit report on prospective nannies, contractors, or tenants

• Entities that maintain information in consumer reports as part of their role as service providers to other organizations covered by the rule.

3. Notice of Consumer Rights: Credit reporting agencies have a new obligation to give identity theft victims a notice of their rights. This includes, among other things, notice of: (1) the right to file a fraud alert, (2) the right to block information in a report that resulted from fraud, and (3) the right to obtain copies of documents used to commit fraud.

This new notice of rights is in addition to a general notice of rights already required by earlier FCRA amendments. The FTC has issued final regulations and a sample copy of the identity theft rights. Under the FTC's rule consumers who report fraud to a consumer reporting agency will receive the special victims' notice of rights. The FTC's final rule also includes notices that explain the obligations of companies that furnish information on consumers as well as those that use consumer reports. (Read more about the rulemaking process for this provision.)

4. Credit Scores: It has become increasingly common for lenders to make decisions based upon a 'score.' Until recently, consumers did not have access to their score or information about the factors that made up the score. Common sense says a series of late payments can lead to a bad credit rating. However, a score is determined by other factors as well, and to give you the chance to improve your score, you should know how the score is calculated. Even if you do not have a history of late payments, your score may be lowered if your credit card balance is close to the limit or if you are just starting out with using credit. If you are looking for a car loan or thinking of refinancing your mortgage, it is a good idea to check your score before you apply for new credit.

5. Disputing Inaccurate Information: Consumer reports combine data voluntarily submitted to one or more of the national bureaus by companies that have had business dealings with the consumer. The FCRA defines such companies as "furnishers" of information. When creditors and others access a consumer's report, data is generally accepted as unquestionably true. However, studies have shown reason to question data accuracy. One such study, conducted by the U.S. Public Interest Research Group (USPIRG) found that one in four credit reports contain serious errors. By its very name, the Fair and Accurate Credit Transactions Act places new emphasis on accuracy of information in consumer reports. Two FACTA sections aim to improve the accuracy and integrity of information as well as give consumers a new right to dispute data included in reports directly with the company that furnished it. These sections are:

• Accuracy guidelines for financial institutions and creditors that furnish information to credit bureaus. (FACTA §312(a), FCRA §623(e)(1)).

• Ability of consumers to dispute information with companies that report to credit bureaus. (FACTA §312(c), FCRA §623(a)(8)).

Like other FACTA sections, the accuracy and dispute sections call for rules to be adopted by the federal banking agency and the FTC. On March 22, 2006, the agencies jointly issued an Advanced Notice of Proposed Rulemaking (ANPR), a means of gathering information prior to a rule proposal. On December 13, 2007, the agencies jointly published proposed rules, which includes an analysis of comments received after publication of the ANPR. As of this writing, the agencies have not adopted final rules. The comment period closed on February 11, 2008. Even though government agencies have not adopted final procedures, it is always a good idea to tell the creditor or others that furnish information about your dispute.

6. Negative Information in a Consumer Report: The number one tip for detecting identity theft is to check your credit report regularly. Erroneous information about late payments and collection actions is what you don't want to see. But catching fraud early enables you to more quickly regain your financial health. FACTA now requires creditors to give you what might be called an 'early warning' notice. This notice could alert you that something is amiss with an account. However, the notice is not a substitute for your own monitoring of credit reports, bank accounts, and credit card statements. And, you may have to look closely to even see this new notice. Starting in December 2004 a financial institution that extends credit must send you a notice before or no later than 30 days after negative information is furnished to a credit bureau. Negative information includes late payments, missed payments, partial payments, or any other form of default on the account.

7. Medical Information and Consumer Reports: If you're like most people, privacy of your medical information is a top priority. A major concern is that medical information may be used against you when you apply for a job or refinance your mortgage. Even when medical information is protected in one area, it may still be disclosed through other means. A good example of this is the credit report. A collection action noted on a credit report that names a medical facility as creditor could inadvertently reveal an underlying medical condition. This is a significant threat since the Federal Reserve Board found in a 2003 study that over half the collections reported on credit reports are for medical debt. Under a new FACTA provision, consumer reporting agencies may not report the name, address, and telephone number of any medical creditor unless the information is provided in codes that do not identify or infer the provider of care or the individual's medical condition. This does not apply to insurance companies selling other than property and casualty insurance. (FCRA §605(a)(6)). Another section of FACTA says a creditor may not obtain or use medical information to make credit decisions. (FCRA §604(g)(2)) But there are exceptions, and federal banking agencies were directed to issue regulations to cover uses of medical information to protect 'legitimate operational, transactional, risk, consumer, and other needs.' (FCRA §604(g)(5)(A)). The banking agencies have now adopted final regulations on medical information and credit. The rule prohibits a creditor from obtaining and using medical information to decide a consumer's credit eligibility. Still, creditors can obtain and use financial information if related to medical debts, expenses, and income. (Read more about the rulemaking process for this provision.) One example is a debt for medical bills. You may owe money to a hospital and perhaps you worked out a plan to pay the debt over time. If you apply for a car loan, the bank can check to see if your payments on the hospital bill are up-to-date. If you are late on a payment or two, the bank may consider this in deciding whether you give you the loan. The bank cannot, however, ask about your medical condition or the reason for your hospital stay. In other words, the late payments to the hospital cannot carry any more weight than a late payment on a credit card. It is your history of paying debts only that is allowed. Your health status should not factor into a creditor's decision about whether to give you a loan.

Is my consent needed to disclose medical information to an employer? Yes. Even before FACTA, your consent was required to disclose medical information to an employer or for credit or insurance. Now under FACTA your consent to use medical data for employment and credit purposes must be specific and in writing. Further, the consent request must use 'clear and conspicuous language' about how the information will be used. FACTA also requires that the medical information requested for employment or credit purposes be 'relevant.' (FCRA §605(a)(6)) The same standard does not apply to insurance.

8. Nationwide Specialty Consumer Reporting Agencies: Consumer reports are generally thought to mean 'credit' reports issued by one of the three national credit bureaus: Experian, TransUnion, or Equifax. However, consumer reports may also be issued for purposes other than credit applications. The FCRA also covers reports for insurance, employment, check writing, and housing rental history. Such reports are quite common and a number of companies now specialize in providing reports for these specific purposes. FACTA defines companies that issue non-credit reports as a 'nationwide specialty consumer reporting agency' when reports relate to:

	Medical records or payments.
	Residential or tenant history.
	Check writing history.
	Employment history.
	Insurance claims.

As of December 2004 consumers may request a free report annually for any of the specialty agencies.

The FTC has declined to publish a list of companies that meet the definition of 'nationwide specialty consumer reporting agencies.' For some specialties such as employment and rental history, there are many companies that meet the definition of consumer reporting agency and that follow the FCRA. Other specialties are dominated by one or two companies, such as the following:

	Medical Records: Medical Information Bureau mib.com
	Insurance Reports: ChoicePoint's CLUE choicetrust.com and Insurance Services Office ISO A-PLUS Report, iso.com/offices_contacts/index.html

Check-writing history: Reports about your check writing history are also 'specialty' reports. This includes reports obtained by banks or other financial institutions from ChexSystems. ChexSystems is a consumer reporting agency that collects information from member financial institutions. If, for example, your checking account was closed because of overdrafts, this may appear on a ChexSystems report when you apply to open an account at another bank. Identity theft victims who have had checks stolen may also have a negative ChexSystems report. Check-writing history reports also cover information compiled and reported to member retailers. Check verification systems include information about returned checks or fraud. Check verification works at point of sale. If, for example, you have a check returned, the merchant will probably report this to a verification network. When the same checking account is offered to purchase something from another merchant, the check may be rejected. Identity theft or other check fraud may result in a negative entry with a check verification system. Two major check verifications systems are SCAN and TeleCheck.

9. Workplace Investigations: FACTA sets a new standard for what the law calls "employee misconduct investigations."

What is an "employee misconduct investigation"? This is an investigation conducted by a third-party your employer may hire if the employer suspects you of:

	Misconduct relating to your employment.
	A violation of federal, state, or local laws or regulations.
	A violation of any preexisting written policies of the employer.
	Noncompliance with the rules of a self-regulatory organization, that, for example, oversees the securities and commodity futures industry.

Why was this change made to the FCRA? This section was adopted to make it clear that employers do not have to get permission to conduct a misconduct investigation. Prior to this, FTC staff issued an opinion letter, the so-called Vail Letter, that said the disclosure and consent requirement of FCRA applies even when an employee is suspected of misconduct and the employer hires an outside investigator. Employers objected to this interpretation of the law because they felt that obtaining consent would tip off the employee to an investigation. (Note: California law already includes an exception for workplace misconduct investigations.

If my employer suspects me of misconduct, what does this mean for me? It means your employer does not have to give you notice and get your permission to conduct a misconduct investigation. Like other inquiries covered by the FCRA, this only applies if the employer hires an outside party to conduct the investigation. It also means you will not receive a notice of your rights as others who are subject to a standard employment background check normally would. If at the end of the investigation the employer decides to take some action against you, you will receive the "adverse action" notice only after the action has been taken. You will receive only a summary of the investigation report, but not the more detailed report that may include sources.

Who will see the investigation report? The report may be communicated to:

	The employer or its agent.
	Any federal or state officer, agency or department, or any officer, agency or department of a unit of general local government.
	Any self-regulatory organization with regulatory authority over the activities of the employer or the employee.
	A government agency, in accordance with an existing FCRA section that allows a consumer reporting agency to disclose personal identifying information to a government agency.
	Others, as otherwise required by law; or

Can I dispute the findings? Not under the FCRA dispute procedure. That is because this new section on workplace misconduct investigations was established by removing this type of investigation from the definition of "consumer report." Thus, the usual protections that apply to a consumer report conducted for employment purposes do not apply to workplace misconduct investigations. If you find yourself in this position, you will probably want to seek the advice of an employment law attorney.

10. Information Sharing Among Affiliates – Opt-Out for Marketing: FACTA will give consumers a new opportunity to stop a corporation's affiliates from sharing customer data for marketing purposes. This opt-out is in addition to the existing opt-out choices for information shared with third-party non-affiliates and an existing opt-out under the FCRA.

The FTC and the federal banking agencies have proposed regulations to create this new opt-out procedure. As of this writing, the agencies have not adopted final rules. Existing provisions of the FCRA allow affiliates to share information about your 'experience and transactions' But that section of the FCRA enables you to stop affiliates from sharing information about your 'credit-worthiness,' also sometimes called 'application information.' FACTA does not change these procedures, but adds a new opt-out choice to stop information sharing among affiliates when the purpose is for marketing. You now have the ability to prevent the affiliate receiving your information to solicit you for its products and services.

How and when will I be able to opt-out? The details will be known only after the agencies issue final regulations. An important question for the agencies is whether this new opt-out will be included in a separate notice or whether it will be included along with the notice already required. The section of FACTA that establishes the affiliate opt-out provision allows the notice to be included with other notices. The statute also specifies that the notice should be 'concise' and 'simple.' In addition, this opt-out is in effect for five years, with another five-year extension available. To help prevent confusion, we believe the FTC and banking agencies should move forward in considering a short form opt-out that includes all consumer choices.

11. Risk-Based Pricing: The amount you pay in interest can vary greatly. If you have a poor credit history, you will usually have to pay a higher rate than people with a good history of repayments. Like everyone else, you probably receive direct mail or other solicitations quoting exceptionally low interest rates. But, if you apply for the loan or credit card, the interest rate may end up being several points higher than originally quoted. A new section of FACTA (FCRA §615(h)) says you must receive a notice if you are offered credit on terms that are 'materially' less favorable than others you received from the creditor. In short, this covers the situation where you apply for a loan and, although you get the loan, you have to pay a higher interest rate than most people because of something in your credit history. If this happens, you are entitled to notice plus a free copy of your credit report. The FTC and the banking agencies will address the details of this notice requirement through rulemaking. Regulations to implement §615(h) have not yet been published as of this writing. However, this notice requirement appears in a recent FTC proposal to amend notice consumer reporting agencies are required to make to 'users' of consumer reports.

12. FACTA Studies: The FTC and other federal agencies have been directed by Congress to conduct several studies of the credit reporting industry.