CIC, FCRA, FTC, CFPB. These acronyms all stand for the same thing: protecting consumer rights.
Contemporary Information Corp (CIC) was established in 1986 to assist landlords and employers in risk mitigation by providing accurate consumer information. CIC has always taken pride in being fully compliant with vetting, policy, regulation in addition to client and consumer education.
In an effort to reach the common goal of protecting consumers, there have been quite a bit of changes to laws, and regulations and stronger enforcement by way of penalties and fines against suppliers and users of consumer information. Keeping up with the changes can be difficult, but in the eyes of the law, lack of knowledge is not an excuse. Let CIC help
The FCRA is the Fair Credit Reporting Act. Initially enacted in 1970 and updated several times since, this federal legislation was designed to promote accuracy, fairness and privacy for all data used by consumer reporting agencies. One of the key stipulations of the FCRA is the consumer’s right to dispute incomplete or inaccurate information in his or her file. Of course, in order to dispute the information, the consumer must be well informed as to what is in the file and must be told if any of that information was used against him, therefore, these are also key stipulations of the FCRA. There is much, much more to the FCRA and the full text may be found at www.ftc.gov/.
A key component, as stated above, is that the applicant be made aware that information in his consumer file has been used to make an adverse decision regarding his application. An adverse action is not just a denial. Any terms that are less than the ideal terms offered, are considered an adverse action. If an applicant is accepted with any conditions- such as a requirement for a cosigner or a higher security deposit – there has been an adverse action and the applicant must be notified in writing.
While the FCRA does not require a specific form to be used, it does make very clear verbiage that must be included on or with the form. For example:
- If a consumer score is used in any part of the decision making process, the score, the score range and score factors must be disclosed to the applicant.
- The name, address and toll free telephone number of the consumer reporting agency that furnished the consumer file.
- A statement that the consumer reporting agency did not take part in making the decision regarding the application nor explain why the decision was made.
- A statement informing the applicant of the rights provided by the FCRA in regards to disputing the accuracy and or completeness of the information provided.
- A statement informing the applicant how to report identity theft or fraud.
- A summary of a consumer’s rights under the FCRA
- For California applicants: A summary of consumer rights must be given in English and in Spanish – regardless of the applicant’s nationality or language preference.
Until recently, government or enforcement of the FCRA fell to the Federal Trade Commission. The FTC was created in 1914 by the Federal Trade Commission Act. It is an independent agency of the United States government with the principal mission of promoting consumer protection. Under the written consent and guidance of the commission, the Bureau of Consumer Protection protects consumers against unfair or deceptive acts in commerce. Bureau attorneys enforce federal law related to consumer affairs and rules promulgated by the FTC. They will investigate, enforce and educate consumers and business in many areas – including privacy and identity protection.
The Consumer Financial Protection Bureau began operation in July 2011 as a result of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB is a federal agency that has the primary responsibility for regulating consumer protection in regards to financial products and services in the United States. It was designed to consolidate employees and responsibilities from a number of other federal regulatory bodies, including the Federal Reserve, the Federal Trade Commission, even the Department of Housing and Urban Development.]The bureau is an independent unit located inside and funded by the United States Federal Reserve, and affiliated with the U.S. Treasury Department. It writes and enforces bank rules, conducts bank examinations, monitors and reports on markets, as well as collects and tracks consumer complaints.
The CFPB opened its website in early February 2011 to accept suggestions from consumers via YouTube, Twitter, and its own website interface. The bureau is tasked with the responsibility to “promote fairness and transparency for mortgages, credit cards, and other consumer financial products and services.”[ According to the bureau’s own webpage, “The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans—whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products. As of January 1, 2013, consumers must be directed to the CFPB rather than the FTC for information regarding complaints, disputes or for information regarding identity theft or fraud. For more information on the CFPB, log onto http://www.consumerfinance.gov/.
Now that you see some of the regulatory agencies involved (there are more at the state level), you can understand the importance of learning as much as you can to protect yourself, your business and your applicants. These agencies are all watching that the FCRA is closely adhered to.
Does the Adverse Action form that your company is currently using incorporate all of these items? The fines for non-compliance are potentially staggering. The adverse action– and other forms – are available to CIC clients at no charge at https://www.securecontinfo.com/user/help08/forms.html.
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