All users of consumer reports must comply with all applicable regulations. Information about
applicable regulations currently in effect can be found at the Consumer Financial Protection Bureau's
website, www.consumerfinance.gov/learnmore.
NOTICE TO USERS OF CONSUMER REPORTS:
OBLIGATIONS OF USERS UNDER THE FCRA
The Fair Credit Reporting Act (FCRA), 15 U.S.C. §1681‐1681y, requires that this notice be provided to inform
users of consumer reports of their legal obligations. State law may impose additional requirements. The text of
the FCRA is set forth in full at the Bureau of Consumer Financial Protection's (CFPB) website at
www.consumerfinance.gov/learnmore. At the end of this document is a list of United States Code citations for
the FCRA. Other information about user duties is also available at the CFPB's website. Users must consult the
relevant provisions of the FCRA for details about their obligations under the FCRA.
All users of consumer reports must comply with all applicable regulations. Information about
applicable regulations currently in effect can be found at the Consumer Financial Protection Bureau’s
website, www.consumerfinance.gov/learnmore
.
NOTICE TO USERS OF CONSUMER REPORTS:
OBLIGATIONS OF USERS UNDER THE FCRA
The Fair Credit Reporting Act (FCRA), 15 U.S.C. §1681‐1681y, requires that this notice be provided to inform
users of consumer reports of their legal obligations. State law may impose additional requirements. The text of
the FCRA is set forth in full at the Bureau of Consumer Financial Protection’s (CFPB) website at
www.consumerfinance.gov/learnmore
. At the end of this document is a list of United States Code citations for
the FCRA. Other information about user duties is also available at the CFPB’s website. Users must consult the
relevant provisions of the FCRA for details about their obligations under the FCRA.
The first section of this summary sets forth the responsibilities imposed by the FCRA on all users of consumer
reports. The subsequent sections discuss the duties of users of reports that contain specific types of
information, or that are used for certain purposes, and the legal consequences of violations. If you are a
furnisher of information to a consumer reporting agency (CRA), you have additional obligations and will
receive a separate notice from the CRA describing your duties as a furnisher.
I.
A.
OBLIGATIONS OF ALL USERS OF CONSUMER REPORTS
Users Must Have a Permissible Purpose
Congress has limited the use of consumer reports to protect consumers’ privacy. All users must have a
permissible purpose under the FCRA to obtain a consumer report. Section 604 contains a list of the permissible
purposes under the law. These are:
• As ordered by a court or a federal grand jury subpoena. Section 604(a)(1)
• As instructed by the consumer in writing. Section 604(a)(2)
• For the extension of credit as a result of an application from a consumer, or the review or collection of a
consumer’s account. Section 604(a)(3)(A)
• For employment purposes, including hiring and promotion decisions, where the consumer has given
written permission. Sections 604(a)(3)(B) and 604(b)
• For the underwriting of insurance as a result of an application from a consumer. Section 604(a)(3)(C)
• When there is a legitimate business need, in connection with a business transaction that is initiated by
the consumer. Section 604(a)(3)(F)(i)
• To review a consumer’s account to determine whether the consumer continues to meet the terms of the
account. Section 604(a)(3)(F)(ii)
• To determine a consumer’s eligibility for a license or other benefit granted by a governmental
instrumentality required by law to consider an applicant’s financial responsibility or status. Section
604(a)(3)(D)
• For use by a potential investor or servicer, or current insurer, in a valuation or assessment of the credit or
prepayment risks associated with an existing credit obligation. Section 604(a)(3)(E)
• For use by state and local officials in connection with the determination of child support payments, or
modifications and enforcement thereof. Sections 604(a)(4) and 604(a)(5)
In addition, creditors and insurers may obtain certain consumer report information for the purpose of making
“prescreened” unsolicited offers of credit or insurance. Section 604(c)
. The particular obligations of users of
“prescreened” information are described in Section VII below.
B.
Users Must Provide Certifications
Section 604(f) prohibits any person from obtaining a consumer report from a consumer reporting agency
(CRA) unless the person has certified to the CRA the permissible purpose(s) for which the report is being
obtained and certifies that the report will not be used for any other purpose.
C.
Users Must Notify Consumers When Adverse Actions Are Taken
The term “adverse action” is defined very broadly by Section 603. “Adverse actions” include all business, credit,
and employment actions affecting consumers that can be considered to have a negative impact as defined by
Section 603(k) of the FCRA – such as denying or canceling credit or insurance, or denying employment or
promotion. No adverse action occurs in a credit transaction where the creditor makes a counteroffer that is
accepted by the consumer.
1.
Adverse Actions Based on Information Obtained From a CRA
If a user takes any type of adverse action as defined by the FCRA that is based at least in part on information
contained in a consumer report, Section 615(a) requires the user to notify the consumer. The notification may
be done in writing, orally, or by electronic means. It must include the following:
• The name, address, and telephone number of the CRA (including a toll‐free telephone number, if it is a
nationwide CRA) that provided the report.
• A statement that the CRA did not make the adverse decision and is not able to explain why the decision
was made.
• A statement setting forth the consumer’s right to obtain a free disclosure of the consumer’s file from the
CRA if the consumer makes a request within 60 days.
• A statement setting forth the consumer’s right to dispute directly with the CRA the accuracy or
completeness of any information provided by the CRA.
2.
Adverse Actions Based on Information Obtained From Third Parties Who Are Not Consumer Reporting
Agencies
If a person denies (or increases the charge for) credit for personal, family, or household purposes based either
wholly or partly upon information from a person other than a CRA, and the information is the type of
consumer information covered by the FCRA, Section 615(b)(1) requires that the user clearly and accurately
disclose to the consumer his or her right to be told the nature of the information that was relied upon if the
consumer makes a written request within 60 days of notification. The user must provide the disclosure within
a reasonable period of time following the consumer’s written request.
3.
Adverse Actions Based on Information Obtained From Affiliates
If a person takes an adverse action involving insurance, employment, or a credit transaction initiated by the
consumer, based on information of the type covered by the FCRA, and this information was obtained from an
entity affiliated with the user of the information by common ownership or control, Section 615(b)(2) requires
the user to notify the consumer of the adverse action. The notice must inform the consumer that he or she
may obtain a disclosure of the nature of the information relied upon by making a written request within 60
days of receiving the adverse action notice. If the consumer makes such a request, the user must disclose the
nature of the information not later than 30 days after receiving the request. If consumer report information is
shared among affiliates and then used for an adverse action, the user must make an adverse action disclosure
as set forth in I.C.1 above.
D.
Users Have Obligations When Fraud and Active Duty Military Alerts are in Files
When a consumer has placed a fraud alert, including one relating to identity theft, or an active duty military
alert with a nationwide consumer reporting agency as defined in Section 603(p) and resellers, Section 605A(h)
imposes limitations on users of reports obtained from the consumer reporting agency in certain circumstances,
including the establishment of a new credit plan and the issuance of additional credit cards. For initial fraud
alerts and active duty alerts, the user must have reasonable policies and procedures in place to form a belief that
the user knows the identity of the applicant or contact the consumer at a telephone number specified by the
consumer; in the case of extended fraud alerts, the user must contact the consumer in accordance with the
contact information provided in the consumer’s alert.
E.
Users Have Obligations When Notified of an Address Discrepancy
Section 605(h) requires nationwide CRAs, as defined in Section 603(p), to notify users that request reports
when the address for a consumer provided by the user in requesting the report is substantially different from
the addresses in the consumer’s file. When this occurs, users must comply with regulations specifying the
procedures to be followed. Federal regulations are available at www.consumerfinance.gov/learnmore/
.
F.
Users Have Obligations When Disposing of Records
Section 628 requires that all users of consumer report information have in place procedures to properly
dispose of records containing this information. Federal regulations have been issued that cover disposal.
II.
CREDITORS MUST MAKE ADDITIONAL DISCLOSURES
If a person uses a consumer report in connection with an application for, or a grant, extension, or provision of,
credit to a consumer on material terms that are materially less favorable than the most favorable terms
available to a substantial proportion of consumers from or through that person, based in whole or in part on a
consumer report, the person must provide a risk‐based pricing notice to the consumer in accordance with
regulations prescribed by the CFPB.
Section 609(g) requires a disclosure by all persons that make or arrange loans secured by residential real
property (one to four units) and that use credit scores. These persons must provide credit scores and other
information about credit scores to applicants, including the disclosure set forth in Section 609(g)(1)(D)
(“Notice to the Home Loan Applicant”).
III.
A.
OBLIGATIONS OF USERS WHEN CONSUMER REPORTS ARE OBTAINED FOR EMPLOYMENT PURPOSES
Employment Other Than in the Trucking Industry
If information from a CRA is used for employment purposes, the user has specific duties, which are set forth in
Section 604(b) of the FCRA. The user must:
• Make a clear and conspicuous written disclosure to the consumer before the report is obtained, in a
document that consists solely of the disclosure, that a consumer report may be obtained.
• Obtain from the consumer prior written authorization. Authorization to access reports during the term of
employment may be obtained at the time of employment.
• Certify to the CRA that the above steps have been followed, that the information being obtained will not
be used in violation of any federal or state equal opportunity law or regulation, and that, if any adverse
action is to be taken based on the consumer report, a copy of the report and a summary of the
consumer’s rights will be provided to the consumer.
• Before taking an adverse action, the user must provide a copy of the report to the consumer as well as
the summary of consumer’s rights. (The user should receive this summary from the CRA.) A Section
615(a) adverse action notice should be sent after the adverse action is taken.
An adverse action notice also is required in employment situations if credit information (other than
transactions and experience data) obtained from an affiliate is used to deny employment. Section 615(b)(2)
.
The procedures for investigative consumer reports and employee misconduct investigations are set forth
below.
B.
Employment in the Trucking Industry
Special rules apply for truck drivers where the only interaction between the consumer and the potential
employer is by mail, telephone, or computer. In this case, the consumer may provide consent orally or
electronically, and an adverse action may be made orally, in writing, or electronically. The consumer may obtain
a copy of any report relied upon by the trucking company by contacting the company.
IV. OBLIGATIONS WHEN INVESTIGATIVE CONSUMER REPORTS ARE USED
Investigative consumer reports are a special type of consumer report in which information about a consumer’s
character, general reputation, personal characteristics, and mode of living is obtained through personal
interviews by an entity or person that is a consumer reporting agency. Consumers who are the subjects of such
reports are given special rights under the FCRA. If a user intends to obtain an investigative consumer report,
Section 606 requires the following:
• The user must disclose to the consumer that an investigative consumer report may be obtained. This
must be done in a written disclosure that is mailed, or otherwise delivered, to the consumer at some time
before or not later than three days after the date on which the report was first requested. The disclosure
must include a statement informing the consumer of his or her right to request additional disclosures of
the nature and scope of the investigation as described below, and the summary of consumer rights
required by Section 609 of the FCRA. (The summary of consumer rights will be provided by the CRA that
conducts the investigation.)
• The user must certify to the CRA that the disclosures set forth above have been made and that the user
will make the disclosure described below.
• Upon the written request of a consumer made within a reasonable period of time after the disclosures
required above, the user must make a complete disclosure of the nature and scope of the investigation.
This must be made in a written statement that is mailed or otherwise delivered, to the consumer no later
than five days after the date on which the request was received from the consumer or the report was first
requested, whichever is later in time.
V.
SPECIAL PROCEDURES FOR EMPLOYMEE INVESTIGATIONS
Section 603(x) provides special procedures for investigations of suspected misconduct by an employee or for
compliance with Federal, state or local laws and regulations or the rules of a self‐regulatory organization, and
compliance with written policies of the employer. These investigations are not treated as consumer reports so
long as the employer or its agent complies with the procedures set forth in Section 603(x), and a summary
describing the nature and scope of the inquiry is made to the employee if an adverse action is taken based on
the investigation.
VI. OBLIGATIONS OF USERS OF MEDICAL INFORMATION
Section 604(g) limits the use of medical information obtained from consumer reporting agencies (other than
payment information that appears in a coded form that does not identify the medical provider). If the
information is to be used for an insurance transaction, the consumer must give consent to the user of the
report or the information must be coded. If the report is to be used for employment purposes – or in
connection with a credit transaction (except as provided in regulations issued by the banking and credit union
regulators) – the consumer must provide specific written consent and the medical information must be
relevant. Any user who receives medical information shall not disclose the information to any other person
(except where necessary to carry out the purpose for which the information was disclosed, or as permitted by
statute, regulation, or order).
VII. OBLIGATIONS OF USERS OF “PRESCREENED” LISTS
The FCRA permits creditors and insurers to obtain limited consumer report information for use in connection
with unsolicited offers of credit or insurance under certain circumstances. Sections 603(1), 604(c), 604(e), and
615(d)
. This practice is known as “prescreening” and typically involves obtaining from a CRA a list of
consumers who meet certain preestablished criteria. If any person intends to use prescreened lists, that person
must (1) before the offer is made, establish the criteria that will be relied upon to make the offer and to grant
credit or insurance, and (2) maintain such criteria on file for a three‐year period beginning on the date on
which the offer is made to each consumer. In addition, any user must provide with each written solicitation a
clear and conspicuous statement that:
• Information contained in a consumer’s CRA file was used in connection with the transaction.
• The consumer received the offer because he or she satisfied the criteria for credit worthiness or
insurability used to screen for the offer.
• Credit or insurance may not be extended if, after the consumer responds, it is determined that the
consumer does not meet the criteria used for screening or any applicable criteria bearing on credit
worthiness or insurability, or the consumer does not furnish required collateral.
• The consumer may prohibit the use of information in his or her file in connection with future
prescreened offers of credit or insurance by contacting the notification system established by the CRA
that provided the report. The statement must include the address and toll‐free telephone number of the
appropriate notification system.
In addition, the CFPB has established the format, type size, and manner of the disclosure required by Section
615(d), with which users must comply. The relevant regulation is 12 CFR 1022.54.
VIII. OBLIGATIONS OF RESELLERS
A. Disclosure and Certification Requirements
Section 607(e) requires any person who obtains a consumer report for resale to take the following steps:
• Disclose the identity of the end‐user to the source CRA.
• Identify to the source CRA each permissible purpose for which the report will be furnished to the end
user.
• Establish and follow reasonable procedures to ensure that reports are resold only for permissible
purposes, including procedures to obtain:
(1) the identity of all end‐users;
(2) certifications from all users of each purpose for which reports will be used; and
(3) certifications that reports will not be used for any purpose other than the purpose(s) specified to
the reseller. Resellers must make reasonable efforts to verify this information before selling the
report.
B. Reinvestigations by Resellers
Under Section 611(f), if a consumer disputes the accuracy or completeness of information in a report prepared
by a reseller, the reseller must determine whether this is a result of an action or omission on its part and, if so,
correct or delete the information. If not, the reseller must send the dispute to the source CRA for
reinvestigation. When any CRA notifies the reseller of the results of an investigation, the reseller must
immediately convey the information to the consumer.
C. Fraud Alerts and Resellers
Section 605A(f) requires resellers who receive fraud alerts or active duty alerts from another consumer
reporting agency to include these in their reports.
IX. LIABILITY FOR VIOLATIONS OF THE FCRA
Failure to comply with the FCRA can result in state government or federal government enforcement actions, as
well as private lawsuits. Sections 616, 617, and 621. In addition, any person who knowingly and willfully
obtains a consumer report under false pretenses may face criminal prosecution. Section 619.
The CFPB’s website, www.consumerfinance.gov/learnmore, has more information about the FCRA,
including publications for businesses and the full text of the FCRA.
Citations for FCRA sections in the U.S. Code, 15 U.S.C. § 1681 et seq.:
Section 602 15 U.S.C. 1681 Section 615 15 U.S.C. 1681m
Section 603 15 U.S.C. 1681a Section 616 15 U.S.C. 1681n
Section 604 15 U.S.C. 1681b Section 617 15 U.S.C. 1681o
Section 605 15 U.S.C. 1681c Section 618 15 U.S.C. 1681p
Section 605A 15 U.S.C. 1681cA Section 619 15 U.S.C. 1681q
Section 605B 15 U.S.C. 1681cB Section 620 15 U.S.C. 1681r
Section 606 15 U.S.C. 1681d Section 621 15 U.S.C. 1681s
Section 607 15 U.S.C. 1681e Section 622 15 U.S.C. 1681s‐1
Section 608 15 U.S.C. 1681f Section 623 15 U.S.C. 1681s‐2
Section 609 15 U.S.C. 1681g Section 624 15 U.S.C. 1681t
Section 610 15 U.S.C. 1681h Section 625 15 U.S.C. 1681u
Section 611 15 U.S.C. 1681i Section 626 15 U.S.C. 1681v
Section 612 15 U.S.C. 1681j Section 627 15 U.S.C. 1681w
Section 613 15 U.S.C. 1681k Section 628 15 U.S.C. 1681x
Section 614 15 U.S.C. 1681l Section 629 15 U.S.C. 1681y
Section 628 15 U.S.C. 1681x
Section 629 15 U.S.C. 1681y
