Purpose: To ensure accuracy, fairness, and privacy of consumer information in the files of consumer reporting agencies.
Regulated by: U.S. Federal Trade Commission, Consumer Financial Protection Bureau, and private litigants.
Amended by:
Fair and Accurate Credit Transactions Act
Credit CARD Act of 2009
USA Freedom Act
Historical Context
Initially passed to address inaccuracies and lack of transparency in consumer credit reports.
Earlier, credit reports included personal character and habits details, leading to errors and lack of consumer recourse.
Key Provisions
Regulations
Consumer Reporting Agencies (CRAs):
Must ensure maximum possible accuracy.
Provide consumer access to their information.
Correct or verify disputed information.
Remove negative information after specific periods (7 years for most items, 10 years for bankruptcies).
Users of Consumer Reports:
Obtain reports only for permissible purposes.
Notify consumers of adverse actions based on reports.
Provide information source to contest report accuracy.
Furnishers of Information:
Provide accurate information to CRAs.
Investigate and correct disputes within 30 days.
Notify consumers about negative information submitted.
Consumer Rights
Free Annual Credit Reports: Under the Fair and Accurate Credit Transactions Act (FACTA), consumers can get a free report from each CRA annually.
Dispute Inaccuracies: Consumers can dispute errors in their reports, and CRAs must rectify them.
Damages for Violations: Consumers can recover actual/statutory damages, attorney's fees, court costs, and possibly punitive damages for willful violations.
Statute of Limitations: Must file suit within two years of discovering the violation or five years of the violation occurring.
Supreme Court Cases
Key Cases:
TRW Inc. v. Andrews (2001)
Safeco Ins. Co. of America v. Burr (2007)
Spokeo, Inc. v. Robins (2016)
TransUnion LLC v. Ramirez (2021)
Nationwide Specialty Consumer Reporting Agencies
Include agencies handling medical records, tenant history, check writing history, employment history, and insurance claims.
Required to provide annual disclosures of their report files to consumers upon request.
Conclusion
The FCRA was one of the first data privacy laws in the Information Age, setting a precedent for information privacy.
It ensures that consumer credit information is handled accurately and fairly, with mechanisms for consumers to access and rectify their reports.