Consumer credit reporting agencies are required by federal law to protect your personal credit information and establish reasonable procedures to ensure accuracy and fairness in your credit report. The Consumer Credit Reporting Reform Act is designed to give consumers the tools necessary to review their personal credit information and to correct inaccurate information. Knowing what the law provides can help you protect your credit reporting information.
Consumer Credit Reporting Reform Act -- Background
The history of the Consumer Credit Reporting Reform Act begins with the Fair Credit Reporting Act -- passed by Congress in 1970 -- which applies to all credit reports used for consumer investigations and employment purposes. The purpose of the Fair Credit Reporting Act was to require that "consumer reporting agencies adopt reasonable procedures” that are “fair and equitable” to consumers and meet the needs of commerce for consumer credit reports. A credit reporting agency can only provide a consumer credit report for the permissible purposes set forth in the Fair Credit Reporting Act.
CCRRA Consumer Protections
The CCRRA, passed by Congress in 1996, amended the FCRA in several ways. For example, it provided a way for consumers to contest erroneously reported credit information. If a credit reporting agency is notified that a credit report contains inaccurate information, the agency must conduct a reasonable investigation free of charge to determine the accuracy of the information. The investigation must be completed within 30 days of receiving notice of the inaccuracy. If the information is found to be inaccurate, it must be deleted from the consumer's file. Any time deleted information is reinserted in the consumer's file, the consumer reporting agency must give the consumer written notice of the reinsertion not less than five business days after reinsertion. A credit reporting agency that neglects to comply with these sections can be sued for monetary damages.
CCRRA Business-related Provisions
Certain provisions of the CCRRA amended the FCRA to the benefit of businesses that use consumer credit reports. For example, companies that are affiliated through common corporate ownership are permitted to share information used in consumer credit reports for marketing and solicitation purposes. The CCRRA amendments also permit businesses to conduct prescreening of consumer credit reports for the purposes of making firm solicitations of credit or insurance.
Congress has further amended the FCRA since the passage of the CCRRA, most notably with the enactment of the "Fair and Accurate Credit Transactions Act of 2003," commonly known as FACTA. This law includes new provisions to the FCRA providing consumers with additional rights and protections against identity theft. For example, FACTA gives consumers the right to a free copy of their credit report once a year. It also requires a credit reporting agency to inform a consumer of his rights under the FCRA when the consumer has notified the agency of suspected identify theft.
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