CFPB Warns Nationwide Specialty Consumer Reporting Agencies to Give Consumers Easy Access to Free Consumer Reports

The Consumer Financial Protection Bureau (CFPB) has released a bulletin to nationwide specialty consumer reporting agencies (NSCRAs) as a reminder of their obligation under the federal Fair Credit Reporting Act (FCRA), which the CFPB oversees, to provide a “streamlined process” for consumers to obtain a free annual consumer report. The CFPB also issued warning letters to NSCRAs that may be violating the FCRA by failing to provide consumers an easy way to access their free reports. The bulletin from the CFPB is available at: http://files.consumerfinance.gov/f/201211_cfpb_NSCRA_Bulletin.pdf. “Nationwide specialty consumer reporting agencies can have great influence over a consumer’s tenancy, insurance premiums, or even employment,” CFPB Director Richard Cordray stated in a press release. “Today, the CFPB is reminding these companies that they must follow the law and provide consumers with easy access to their free annual report. If we have reason to believe that companies are not following the law, we will take action.” According to CFPB Bulletin 2012- 09, dated November 29, 2012, the FCRA requires NSCRAs “to provide, upon request of a consumer, a free annual disclosure of the consumer’s file, commonly known as a consumer report.”  The FCRA’s Regulation V includes a rule mandated by the FCRA that requires NSCRAs to establish a “streamlined process” for consumers to request their free annual consumer reports. The CFPB will evaluate compliance with the streamlined process requirements by NSCRAs and expects each NSCRA to comply with the FCRA and Regulation V by:  

• Enabling consumers to request annual file disclosures by a toll-free telephone number that is published in any telephone directory in which any telephone number for the NSCRA is published and is clearly and prominently posted on any Website owned or maintained by the NSCRA that is related to consumer reporting, along with instructions for requesting disclosures by any additional available request methods.
• Ensuring that its streamlined process for obtaining an annual file disclosure has adequate capacity to accept requests from a reasonably anticipated volume of consumers.
• Collecting only as much personal information from a consumer requesting a disclosure as is reasonably necessary to identify the consumer properly.
• Providing clear and easily understandable information and instructions to consumers, including but not limited to: providing information on the status of a request, providing a “help” or “frequently asked questions” page for web-based requests, and providing a statement when the identity of the consumer requesting an annual file disclosure cannot properly be verified and directions on how to complete the request.
• Using or disclosing personally identifiable information collected from a consumer because of the consumer’s request for an annual or other disclosure required by the FCRA from the entity that the consumer made through the streamlined process only in ways permitted by Regulation V.
• Accepting consumer requests for annual file disclosures from consumers who use methods other than the streamlined process or instructing such consumers on how to use the streamlined process.

The CFPB bulletin states that any NCSRA not currently providing a streamlined process that meets these requirements should take immediate steps to comply. The CFPB defines NSCRAs as “consumer reporting agencies that compile and maintain files on consumers on a nationwide basis relating to (1) medical records or payments; (2) residential or tenant history; (3) check writing history; (4) employment history; or (5) insurance claims.”  According to the CFPB, NSCRAs “are included in the larger industry category of consumer reporting agencies, which also includes credit reporting companies or credit bureaus.” The CFPB calculates there are “roughly 400 consumer reporting agencies in the U.S., with three companies dominating the market – Equifax Information Services LLC, Experian Information Solutions Inc., and TransUnion LLC. Consumers have a right to a free annual report (technically known as a “file disclosure”) not only from the largest three credit bureaus, but also from nationwide specialty consumer reporting agencies” The bulletin follows a CFPB review of how nationwide specialty consumer reporting agencies are complying with these requirements. According to the press release, the CFPB review looked at phone listings and websites for nationwide specialty consumer reporting agencies and attempted to request reports but identified several problems including “companies that are not listing toll-free numbers, and companies that have toll-free numbers but do not make it easy for consumers to request reports.” The CFPB is sending warning letters to several NSCRAs that advise the companies that “they may be in violation of the law, and that they should review their compliance with requirements to provide consumers streamlined access to their free annual reports.” An example of a warning letter from the CFPB can be found at http://files.consumerfinance.gov/f/201211_cfpb_NSCRA_warning_letter.pdf. As reported previously by ESR News in November 2012, the CFPB announced in the Federal Register corrections to typographical and technical errors in the earlier versions of three essential CFPB forms required by the Fair Credit Reporting Act (FCRA) in the background screening process starting January 1, 2013: ‘A Summary of Your Rights Under the Fair Credit Reporting Act,’ ‘NOTICE TO USERS OF CONSUMER REPORTS: OBLIGATIONS OF USERS UNDER THE FCRA,’ and ‘NOTICE TO FURNISHERS OF INFORMATION: OBLIGATIONS OF FURNISHERS UNDER THE FCRA.’  The CFPB announcement is available at https://www.federalregister.gov/articles/2012/11/14/2012-27581/fair-credit-reporting-regulation-v-correction. The new CFPB forms to be used starting January 1, 2013 are available on the Employment Screening Resources (ESR) Legal Compliance Resources web page at https://www.esrcheck.com/services/research.php. For ESR clients, these new CFPB forms will be updated automatically with the ESR Assured Compliance^SM system. For more information about automated compliance, visit https://www.esrcheck.com/ESR-Assured-Compliance.php. For information about background checks, visit Employment Screening Resources (ESR) – ‘The Background Check Authority’ and nationwide screening company accredited by The National Association of Professional Background Screeners (NAPBS®) – at https://www.esrcheck.com/ or call toll free 888.999.4474.  Sources: http://files.consumerfinance.gov/f/201211_cfpb_NSCRA_Bulletin.pdf http://www.consumerfinance.gov/pressreleases/consumer-financial-protection-bureau-issues-warning-to-nationwide-specialty-consumer-reporting-agencies/ http://files.consumerfinance.gov/f/201211_cfpb_NSCRA_warning_letter.pdf https://www.federalregister.gov/articles/2012/11/14/2012-27581/fair-credit-reporting-regulation-v-correction https://www.esrcheck.com/wordpress/2012/11/30/consumer-financial-protection-bureau-announces-new-corrected-forms-required-by-fcra-for-background-checks-starting-january-1-2013/ About Employment Screening Resources (ESR): Founded by safe hiring expert Attorney Les Rosen in 1997, Employment Screening Resources (ESR) – ‘The Background Check Authority^SM’– provides accurate and actionable information that empowers employers to make informed hiring decisions for the benefit of their organizations, employees, and the public. CEO Rosen literally wrote the book on background checks with “The Safe Hiring Manual” and ESR is accredited by The National Association of Professional Background Screeners (NAPBS), a distinction held by a small percent of screening firms. Employers choosing ESR know they have selected an agency meeting the highest industry standards. To learn more about ESR, visit https://www.esrcheck.com or call toll free 888.999.4474. About ESR News: The Employment Screening Resources (ESR) News blog – ESR News – provides employment screening information for employers, recruiters, and jobseekers on a variety of topics including credit reports, criminal records, data privacy, discrimination, E-Verify, jobs reports, legal updates, negligent hiring, workplace violence, and use of search engines and social network sites for background checks. For more information about ESR News or to send comments or questions, please email ESR News Editor Thomas Ahearn at [email protected]. To subscribe to the ESR News Blog Feed, visit https://www.esrcheck.com/wordpress/feed/. To subscribe to the complimentary ESRcheck Report monthly newsletter, please visit https://www.esrcheck.com/Newsletter/.]]>