Fair Credit Reporting Act of 1970

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Time
7 hours 2 minutes
Difficulty
Intermediate
CEU/CPE
7
Video Transcription
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>> Hello everyone. It's Chris again.
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I'm a cyber instructor for it's
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US Information Privacy course.
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In Lesson 7.1,
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we're going to look at
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the Fair Credit Reporting Act of 1970.
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We have several learning objectives.
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We're going to look at some important definitions,
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we'll look at some of those permissible purposes
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of credit reports,
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we'll look at requirements relating to
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information contained in consumer reports.
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We'll look at disclosure of
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investigative consumer reports and
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employee misconduct investigations,
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and we'll close with discussion
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on enforcement and penalties.
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It's always important to review key definitions
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as they apply to any law,
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whether at the federal or state level
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here in the United States.
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Before I begin with the definition,
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I'd just like to provide you with
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some background information on the FCRA.
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Now the FCRA is the first US Federal Law that
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provided binding guidance to
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the private sector on how it would
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handle consumer personal information,
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which is extremely important.
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Now Congress felt the need and was compelled to enact
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this law based on previous decades of
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inadequate application of credit information
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that placed individuals at harm
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from a employment insurance and a credit perspective.
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What the Congress did was to enact this first law,
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has been amended since then.
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It really provided that guidance and
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held not organizations,
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institutions, and individuals accountable for how
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they handled consumer information.
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Now as we talk about these definitions,
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I'd like to begin with a consumer report.
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A consumer report is any written, oral,
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or other communication that
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contains information on a consumer's creditworthiness,
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credit standing, credit capacity,
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character, general reputation,
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personal characteristic or mode of
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living that's used to make a decision
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on a consumer's eligibility
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for credit or insurance, for personal,
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family, household purposes, for employment purposes,
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and for other purposes like, again,
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applying for certain types of licenses and others.
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When we talk about our consumer reporting agency,
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many of us are familiar with the big three.
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Experian, Equifax, TransUnion.
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But what many consumers don't know that
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there are thousands of
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credit reporting agencies out there
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that are purchasing and
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sharing information on your credit worthiness,
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credit capacity, general mode of
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living, and other information.
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When we talk about uses and furnishers,
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a user is someone
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their request information from
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a credit reporting agency to make those decisions on
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whether they grant you credit to provide you with
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insurance at a premium rate or
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substandard rate, or to employers.
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Users themselves have to
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provide their credit reporting agencies with
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a specific permissible purpose for which they
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plan on using that credit reporting information.
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Is the furnishers that provide that information to
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the credit reporting agencies based
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on your mode of living,
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credit capacity, creditworthiness, and other items.
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When we talk about employment misconduct,
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there are times when employers may conduct
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an employment employee misconduct investigation
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based on the actions of an employee.
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In those cases, the FCRA does not consider that report
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as a credit report if it does not
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contain any credit reporting information.
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However, if the employer is going to
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take adverse actions against that employee,
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then it must give that individual notification
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so that he or she may dispute the information.
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When we talk about an investigative consumer reports,
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those are reports that are based
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on consumer's character, general reputation,
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personal characteristics, or mode of living that
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a credit reporting agency will obtain by going out and
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doing interviews with your neighbors and others.
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Now, again, this credit reporting
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investigative consumer report isn't considered one if
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it doesn't include specific factual information
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on your creating information
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that is obtained directly from
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a creditor or from a consumer reporting agency.
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We talked about permissible purposes,
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so these are some of the permissible purposes.
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A user has to document the purpose for which
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it is requesting
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this credit reporting agency information.
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If it's in response to a court order,
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a grand jury subpoena at the ready request of
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the consumer as an extension or review of credit,
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for employment purposes, insurance underwriting,
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to review your creditworthiness
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as tied to a license or a government instrumentality,
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to determine whether you can repay credit,
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to encases for to determine child support levels.
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Now there's certain information that's supposed to be
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excluded from credit reports.
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Those are any information
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>> that's older than seven years.
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>> Any information when we talk
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about bankruptcy themselves title
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11 that are older than 10 years.
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Now, student loan default information remains on
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your credit report forever until
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that student loan is repaid.
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Now there's certain things that we have to
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disclose to a consumer.
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Consumers have a right to
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request their credit report from
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the credit reporting agencies
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if an adverse action has been
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taken against that consumer to null a credit employment
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that their credit reporting agency has and
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notify that consumer in writing stating that,
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again, the credit for
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employment with insurance or
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other purposes that was denied,
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the credit reporting agency will
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state that it did not make the decision.
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It has to provide the consumer with ability to
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request that credit report and refute
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this information and also to
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>> request a re-investigation.
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>> The credit reporting agency
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>> must also give information on
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>> the CRA's of credit
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reporting agencies contact information.
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If an employer is going to use
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credit reporting agency for or
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medical information for cases
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>> of employment or insurance.
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>> Then again, those employers must
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provide that consumer with notification and
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must have that consumers explicit
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consent before it can
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use those information for those purposes.
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We'll be talking about enforcement, many agencies,
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several of the banking regulatory bodies,
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the Consumer Financial Protection Bureau,
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and the Federal Trade Commission,
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and also State's Attorney and
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>> Generals enforced this law.
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>> For civil colonies,
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if you are in violation of
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the law knowingly, then again,
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you can be fined up to the amount of
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the damages or not
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less than $100 and no more than $1,000.
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You can also recoup
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attorney fees at the discretion of the court.
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Now, if we're talking about civil liability
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for negligence compliance, then again,
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then consumer can recoup
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any actual damages sustained by him or
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her as a result of the non-compliance,
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and also they may be able
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>> to recoup their attorney fees.
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>> Criminal penalties are if
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you obtain information under false pretenses,
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you could be imprisoned for no more than two years.
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If the unauthorized disclosure
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of that information, again,
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you can be imprisoned for no more than two years.
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Question 1 asks,
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FCRA defines a credit reporting agency as?
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The appropriate answer is A.
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Question 2 asks,
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an FCRA defines a credit report as?
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The correct answer is B.
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Question 3 asks, permissible purposes include?
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The answers are A, B, C,
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and D. Question 4 ask,
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upon the receipt of a customer's
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request for a credit score,
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a credit reporting agency must
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provide a notice that includes?
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The appropriate answers are A, B, C,
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and D. Question 5 asks,
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a person who is negligent in failing to comply
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with the FCRA is liable for what?
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The appropriate answers are C and D. Question 6 asks,
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any person knowingly and
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willfully obtains information from
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a consumer under false pretenses shall be?
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The answer is A. The FCRA is important law.
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It helps ensure the accuracy, fairness,
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and privacy information in consumer credit bureaus.
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It has civil and criminal penalties,
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it allows individuals to be able to
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dispute inaccuracies in their credit reports.
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I hope you enjoyed this discussion.
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I hope you're having a wonderful day. Take care
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