The Fair Credit Reporting Act (FCRA)

Fair Credit Reporting Act

The Fair Credit Reporting Act was passed to provide greater accuracy in consumer credit reports and to insure the privacy of the consumer’s credit report. Common violations of the FCRA include:

  1. Theft of Identity. The perpetrator will gain enough information on the consumer to obtain a copy of his or her credit report. With the additional information gleaned from the consumer report the perpetrator will apply for credit, often in the form of credit cards, run up the balance, and abscond, leaving the unpaid bills to appear on the consumer’s bill. Action may be taken against the credit reporting agency and others to correct the situation.
  2. Unauthorized Use. Similarly, companies and individuals may obtain a consumer report for unauthorized purposes. The FCRA limits the permissible purposes for which a consumer report by be requested to: court ordered access, access on written approval by the consumer, extension of credit, application for insurance or for government license or permit, or other business purposes. A collection agency may access the consumer report in the course of collecting a debt. Examples of obtaining consumer reports for unauthorized purposes include: accessing the report for the purpose of litigation, accessing the report of a political rival, accessing the consumer report for use in support proceedings prior to the entry of judgment without court order, etc.
  3. Deletion of Improper Information. The FCRA requires the credit reporting agencies to maintain consumer reports to reflect the maximum possible accuracy. Debts older than seven (7) years and bankruptcies older than (10) years are required to be deleted. The consumer may request the credit reporting agency to reinvestigate. If the entry is not verified or the creditor does not respond, the information must be removed. The failure of the credit reporting agency to delete obsolete or unverified information violates the FCRA. Also, the reappearance of such information after removal is likely to violate the Act.