Credit Report — Identity Required on Inquiry Line
Service : Background Screening
Question: Can an employer request a consumer report — specifically, a credit report — on an individual consumer but not have their company name appear on the consumer’s file in the inquiry line?
Response and Analysis:
Both the Fair Credit Reporting Act (“FCRA”) as well as opinion letters of the staff of the Federal Trade Commission (“FTC”) provide guidance indicating that the identity of the end-user requesting the consumer report must be disclosed.
Section 607(e) of the FCRA provides that “A person may not procure a consumer report for purposes of reselling the report … unless the person discloses to the consumer reporting agency that originally furnishes the report (A) the identity of the end-user of the report (or information); and (B) each permissible purpose … for which the report is furnished to the end-user of the report (or information).”
This section further ties into the obligation of every CRA to the consumer under Section 609(a)(3)(A), which mandates that “(E)very consumer reporting agency shall, upon request … clearly and accurately disclose to the consumer … (i)dentification of each person (including each end-user identified under section 607(e)(1)) that procured a consumer report (i) for employment purposes, during the 2-year period preceding the date on which the request is made.” In addition, Section 609(a)(3)(B) provides that such identification shall include “the name of the person or, if applicable, the trade name (written in full) under which such person conducts business.” These compliance obligations imposed on CRAs ultimately protect consumers by providing them with information on who is inquiring about them, and these obligations exist whether or not the consumer (or the selling CRA, as the case may be) actually requests such information. In order for CRAs to be in compliance with the FCRA, they must have and disclose the identity of the end-user of the consumer report.
This compliance requirement is further detailed in “FTC Staff Opinion: Haynes-Rosen” dated June 9, 1998, which specifically addresses the requirement of the end-user’s identity as follows:
“6. Is it mandatory for a CRA that obtains a consumer report from another CRA to provide to the selling CRA the name of the end-user of a consumer report as required by Section 607(e), even when the selling CRA does not request the information?
Section 607(e) of the FCRA imposes special obligations upon entities that purchase consumer reports for resale from a CRA, including a requirement that the reseller must provide the selling CRA with the identity of the reseller’s user. This obligation exists regardless of whether the selling CRA requests the information.
7. Would a CRA/reseller be in compliance with Section 607(e) if it provides as the ‘name’ of the end-user some description of the company (such as a ‘national staffing company’) rather than the actual name of the end-user?
The reseller must provide the actual identity of the person or entity that is receiving the report. In the example you have provided, the CRA or reseller must provide the identity of the national staffing company. This is important because it enables a credit bureau or other CRA that is the source of the information to comply with Section 609(a)(3) of the FCRA, which requires CRAs to disclose to consumers the identities (trade name, where applicable) of all recipients of their reports for employment purposes for the previous two years.”
While Sections 607 and 609 fall under the FCRA’s “Compliance Procedures” and ultimately provide for consumer protection by ensuring consumers have information on who is requesting information about them, and the question has also been raised as to whether or not the consumer can “opt out” of such protection, based on the FCRA and staff guidance, the best practice is to always include the end-user’s identity. Both the FCRA and staff guidance have made clear that whether or not this information is requested, in order for the CRA and reseller to be in compliance, the identity of the end-user must be disclosed. No guidance exists on whether a CRA could provide this information to the consumer verbally instead and off-the-report, but the requirement under Section 609(a)(3)(B) that the name/identity be written in full seems to strongly negate the idea that verbal provision of information is sufficient, and we believe that the intent of these FCRA compliance provisions is that the information must appear on the consumer report.
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