This article has been written by Ms. Khushi Patel, 3 years BBA LLB Student From Auro University.
Introduction
The fair credit reporting act in the USA governs Consumer credit report and promote the accuracy fairness and privacy of information assembled by credit reporting agencies. it is an obligation on the part of A Credit reporting agency To collect and self-credit information and financial information about individuals. In the USA there is a three National Credit reporting agencies which include the private investigator detective agency collection agency inspection bureaus companies which sell information to insecure companies and assist in performing a background checks and collecting the placement offices which are to be CRS under the law. Credit reporting agencies collect and compile consumer reports which are written or oral in nature, CSR bearing on the consumer’s creditworthiness, credit standing credit, capacity general reputation personal characteristics, or mode of Living. The objective of the fair credit reporting act is to promote the accuracy fairness and privacy of CRAs’ data. Credit report Agencies provide reports on individuals for a business and the FC provides important protection for the credit reports, consumer investigation reports, and Employment background checks. The act requires credit report Agencies to follow the “reasonable procedure” to protect the confidentiality, accuracy, and relevance of credit information and established a framework of fair information practices for personal information that include write of data quality, data securities use limitations required for the data destruction, notice, user participation, and accountability.
Impact of FCRA on American Companies
The consumer credit Protection Act protects the information Gathered by consumer reporting agencies such as a Credit bureaus, medical information companies, and tenant scanning services. The Fair Credit Reporting Act (FCRA) is the primary federal law that governs the collection and reporting of credit information about consumers. It covers how a consumer’s credit information is obtained, how long it is kept, and how it is shared with others. The Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) are the two federal agencies charged with overseeing and enforcing the provisions of the law. In United State, there is a three major credit reporting bureaus, Equifax, Experian, and Transunion, their work is to collect information about individuals’ consumer financial history, which can use for their credit score and affect their ability to borrow money. The agency which provides the information to the consumer reporting agency has a specific legal obligation, including the duty to investigate disputed information and notify the consumer when adverse action is taken on the basis of such a report. The fair and accurate credit transaction at added provision to this act on the base relating to record accuracy and identify theft and promote fairness. The Dodd-Frank Act, transfers to the consumer financial protection Bureau most of the rule-making responsibilities added to this Act, but the commission Retains all its enforcement authority. The fair credit reporting Act which compiles the consumer credit report and investigates consumer reports were passed to deal with the problems faced by the growing credit reporting industries. The credit reporting Act is the first Central act enacted in the USA to regulate the use of personal information by private businesses. Retail credit Co, was the first credit reporting agent established in 1899. with the passing of time, retail credit purchased smaller credit report agencies and expand its business into selling reports to employers. Later in the year 1960 the abuse was indicated within the industry, including requirements that investigator file quotes of negative information on the data subject. Credit report Agencies were collecting Lifestyle information on a data subject, including sexual orientation, material status, and drinking habits, and providing Outdated information to an unauthorized person. public explosion lead to Congressional Inquri and Federal regulation, Through this comprehensive amendment was indicated in the fair credit reporting act, the amendments contain a number of improvements to the fair credit reporting act, but it also includes the provision that allows an affiliate sharing of credit reports prescreening of credit report and Limited preemption of stronger State Law on credit.
The fair credit reporting act is domestic law in the United state that regulates the collection, dissemination, and use of consumer information including credit reports. the fair credit Reporting Act applies to all companies that provide information to credit reporting agencies including American companies. The fair credit reporting act not just regulates credit reporting but also includes the products and industry regulations, For those companies who believe that they are beyond the range of the fair credit reporting act because they do not engage in typical credit reporting such beliefs are mistaken, Because FCRA governed all those involved in consumer report chain including consumer reporting agency And all those who use consumer reporting agency’s report. It is difficult to imagine an employer or a consumer-facing business that is not subject to FCRA’s strict requirement and users may unknowingly purchase a regulated consumer report. Under the fair credit reporting act, American companies are required to ensure the accuracy and completeness of information in their report to the credit reporting agency. they must also inform consumers in case of false information is reported to the credit reporting agency. additionally, American companies must obtain the consumer’s consent before acquiring a credit report, And its an obligation on part of the company to inform the consumer if the adverse effect is done on the basis of information in their credit report. American consumer Has the legal right to file a lawsuit against the company, In the consumer financial protection Bureau or the federal trade Commission and seeks damages if any company violates the provision of the fair credit reporting Act, damages include actual damages, punitive damages, and lawsuit free.
Conclusion:
In conclusion, the fair credit reporting act is an important Central legislation that helps consumer to protect their privacy and ensure the accuracy of their credit reports. American companies must comply with the fair credit reporting act provisions and requirements to avoid legal consequences To maintain their honor of a business in the Marketplace. For violating the provision of the fair credit reporting act is a fine up to $100 $1000. If there is damage actual or punitive may also impose additional legal proceeding fees, and criminal charges May also apply in certain cases if the information is obtained by fraud.
Reference:
https://www.ftc.gov/legal-library/browse/statutes/fair-credit-reporting-act
https://bja.ojp.gov/program/it/privacy-civil-liberties/authorities/statutes/2349
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