Senator Requests Information from Consumer Reporting Agencies about Consumer Protection

BP_FigureMagnifyingGlass

Written By ESR News Blog Editor Thomas Ahearn

U.S. Senator Claire McCaskill (D-Missouri) has written a letter to 21 Consumer Reporting Agencies (CRAs) requesting information about the uses of specialty consumer reports and examining the practices of specialty CRAs after receiving complaints from individuals who encountered trouble removing incorrect information from – or even learning about the contents of – their specialty consumer reports, according to a news release on Senator McCaskill’s website.

In her letter to the CRAs, Senator McCaskill wrote: Many consumers are unaware that specialty consumer reports are used in decision-making processes regarding employment, housing, or government benefits until an adverse action is taken against them. By the time a consumer learns of these reports, requests a copy, and disputes any erroneous information, the opportunities they seek are often expired and some can find their lives in disrepair.

As Ranking Member of the United States Senate Special Committee on Aging, Senator McCaskill wrote the letter because the practices of CRAs can impact seniors since these consumer reports are used to screen for employment, housing leases, and eligibility for government programs such as Social Security. As part of the Committee’s inquiry, McCaskill has requested that documentation and information about the following practices be provided to the Committee by June 2, 2016:

  • Do you provide a free annual consumer report to consumers? If no, why not? If so, please describe your policy and procedures for providing a streamlined process for consumers to request their free annual consumer report. Please also describe the ways in which consumers learn of this policy.
  • Please describe the specific circumstances in which consumers may receive a free consumer report from your company, apart from the report available once every 12 months upon request.
  • How does your company receive and process requests regarding copies of consumers’ reports? Please provide any data on how quickly the requests are processed, including any internal limit your company maintains on processing time, and describe the staff you maintain to handle consumer requests.
  • What is your company’s procedure for allowing consumers to dispute inaccurate information included on their report? Please describe your procedures for investigating and correcting inaccurate or outdated information, including any internal timeline you maintain for investigating inaccuracies and reporting results to consumers. Please provide any analytical data on the dispute resolution process.
  • Please describe your procedure for updating reports with correct information upon notification from reporting companies.
  • Have any consumers filed a case against you in a court of law? If so, please provide the case name, docket number, and jurisdiction for the litigation.
  • Have you been the focus of any enforcement actions, including warning letters, by any local, state, or federal agencies?
  • Please provide the name and address of any parent company, subsidiary, and affiliated companies.
  • Do you have any contracts or agreements with any federal, state or local government entities to provide reports? If so, please list the entities with which you have contracted and the type of service rendered for each.
  • What federal, state or local government entity has regulatory authority over your company? Have you had any interactions with any of these entities? If so, please explain.
  • Do you conduct audits on your data or employ a third party to do so? If so, please provide results of audits for the past five years, including but not limited to your error rate. If not, please explain how you control the quality of your data.
  • Please explain your procedures for handling personally identifiable information and protected health information and your protocol for protecting against identity theft.
  • How do you calculate a consumer’s report or reporting score? Is there a specific formula or documents used to substantiate the score that is reported? Is there a specific time frame used? Please explain the methods used to collect the information and generate your reports.
  • How do you distinguish between fraud, suspected fraud, and account abuse? How do these distinctions impact a consumer’s score?
  • Please describe your procedures for providing consumers the opportunity to place a “security freeze” on their credit reporting files, including the charge, if any, for this service.

While many consumers are familiar with the “big three” large credit bureaus – Experian, Equifax, and TransUnion – an estimated 300 to 400 smaller CRAs currently operate in the U.S., overseen by the Consumer Financial Protection Bureau (CFPB). A complete copy of Senator McCaskill’s letter is available at https://www.mccaskill.senate.gov/media-center/news-releases/with-credit-reporting-errors-harming-missourians-mccaskill-keeps-up-fight-to-protect-consumers-.

As reported on ESR News in May 2016, Senator McCaskill, along with Senator Jon Tester (D-Montana), wrote a letter to the Office of Personnel Management (OPM) that raised concerns about the transition of federal security clearance background checks from the Federal Investigative Services (FIS) to a new agency called the National Background Investigations Bureau (NBIB) “to ensure that the NBIB will not simply be a new name for the FIS.”

Earlier in the same month, ESR also reported that the Federal Trade Commission (FTC) released new guidance for companies in the business of compiling background information for employment purposes called “What Employment Background Screening Companies Need to Know About the Fair Credit Reporting Act (FCRA)” in order to help these companies understand when their work defines them as a CRAs under the FCRA.

CRAs in the U.S. are regulated by the Fair Credit Reporting Act (FCRA), a federal law enacted in 1970 to promote the accuracy, fairness, and privacy of consumer information in consumer reports. FCRA requirements for CRAs include prior notice, disclosure to and written consent from subjects of background checks, pre- and adverse action notices if applicants are denied employment due to a background check, and opportunities for consumers to dispute information.

Employment Screening Resources (ESR) founder and CEO Attorney Lester Rosen has written an article – ‘Complying with the Fair Credit Reporting Act in Four Easy Steps’ – that describes the certification, release and separate disclosure, pre-adverse action notice, and adverse action notice requirements of the FCRA. The article is available at http://www.esrcheck.com/Articles/Complying-with-the-Fair-Credit-Reporting-Act-in-Four-Easy-Steps/135/.

ESR is a member of Concerned CRAs, a group of like-minded CRAs formed in 2008 to focus on education for consumer protection best practices. Members pledge to verify the accuracy of information they provide for background checks and avoid “offshoring” personally identifiable information (PII) of Americans used in background checks overseas to foreign countries beyond the reach of U.S. privacy laws. More information is available at http://www.concernedcras.com/.

ESR Helps Protect Consumer Information

Employment Screening Resources® (ESR) is a global provider of fast, accurate, affordable, and compliant background checks that is accredited by the National Association for Professional Background Screeners (NAPBS®). ESR is also audited yearly for SOC 2® compliance to protect the security, privacy, and confidentiality of consumer information. To learn more about background check services from ESR, please call toll free 888.999.4474 or visit http://www.esrcheck.com.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

© 2016 Employment Screening Resources® (ESR) – Making copies or using of any part of the ESR News Blog or ESR website for any purpose other than your own personal use is prohibited unless written authorization is first obtained from ESR.