The changing face of FCRA Financial Today

The changing face of FCRA

Credit histories existed about a hundred years ago. It was not as well established as it is today. Credit histories were used by merchants to assess their possible customers. It was a record of negative information about the person involved. Also these records cannot be viewed by consumers. As years passed credit records change face. Fair Credit Reporting Act was created to regulate the activities involved in by credit reporting bureaus. This law sets restrictions of who can access consumers’ sensitive credit information and for what purposes can they be utilized.

Fair Credit Reporting Act which was enforced by the Federal Trade Commission was created to address the protection consumers needed for privacy, accuracy and fairness. This law was originally passed in 1970 to address the need of people to have access to such sensitive information about them shared by lenders, insurers and others. During 1996 amendments additional rights were added to strengthen consumers’ stand. 2003 revisions of this law addressed the growing need to protect consumers from identity theft, increasing of accuracy to this records and restriction of marketing of financial products using sensitive information which is shared with affiliates.

In 1998 the Congress made identity theft a felony. In addition to this the Congress ordered FTC to coordinate federal efforts to monitor identity theft thus several changes were made to Fair Credit Reporting Act.

Consumers were then given the right to request for a fraud alert for 90 days. Moreover if the consumer can provide a report of identity theft he/she can file extension of fraud alert of seven years. With this fraud alert new credit lines or request of higher credit limit on the consumer’s current accounts cannot be accomplished without the permission of the consumer.

Aside from the FACT Act amendments regarding identity theft accuracy, access to reports and reinvestigations are also addressed. Studies starting 1990s about credit reports reveal that credit bureaus have sloppy practices that can lead to errors on consumers’ credit reports. Errors made to credit reports post serious troubles and it can take a long time to resolve them completely.

To give consumers better chances to take a look at their credit reports to avoid being troubled by mistakes, the law required the three credit bureaus to give consumers free copy of their credit report once every 12 months. Credit scores can also be obtained in a “fair and reasonable” price.

In addition to this in case of a dispute credit bureaus are obliged to immediately address the problem. Reinvestigations can take place for 30-45 days. Credit bureaus must also notify furnishers about any changes made as a result of reinvestigation addressing the customer complaint about an error in his/her credit report. In turn furnishers must change their records and stop reporting to credit bureaus the information found to be imprecise.

The issues on privacy were also given sufficient attention with this amendment plus other concerns associated with credit reports and credit reporting. Some of the modifications include (1) consumers are now given rights to opt out of solicitations based on affiliate shared information and (2) Risk based pricing notices was established.

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