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YOUR RIGHTS UNDER THE REVISED FEDERAL FAIR CREDIT REPORTING ACT
-- partly adapted from FTC Model Fact Sheet--

The federal Fair Credit Reporting Act (FCRA) is designed to promote accuracy, fairness, and privacy of information in the files of every credit bureau (or Consumer Reporting Agency--CRA). The law was significantly amended by the 1996 Congress. The new changes take effect 30 Sept 97.

Most credit bureaus gather and sell information about you -- such as if you pay your bills on time or have filed bankruptcy -- to creditors, employers, landlords, and other businesses. You may not know that check verification companies and tenant screening firms, as well as the Medical Information Bureau, are all credit bureaus. You can find the complete text of the FCRA, 15 U.S.C. 1681-1681u, and helpful fact sheets, at the Federal Trade Commission's web site. Here are key FTC highlights:

The FCRA gives you specific rights, as outlined below. You may have additional rights under state law, especially to obtain free credit reports. Contact your state attorney general for more details.

You must be told if information in your file has been used against you. Anyone who uses information from a CRA to take action against you -- such as denying an application for credit, insurance, or employment -- must tell you, and give you the name, address, and phone number of the CRA that provided the consumer report, plus disclose your right to a free report after denial.

You can find out what is in your file. At your request, a CRA must give you the information in your file, and a list of everyone who has requested it recently. There is no charge for the report if a person has taken action against you because of information supplied by the CRA, if you request the report within 60 days of receiving notice of the action. You also are entitled to one free report every twelve months upon request if you state that (1) you are unemployed and plan to seek employment within 60 days, (2) you are on welfare, or (3) your report is inaccurate due to fraud or identity theft. Otherwise, a CRA may charge you up to $8.50 or so, unless you live in a free or low cost report state. If you live in Vermont, Massachusetts, Georgia (2/year in GA), Maryland, Colorado or also New Jersey, you can obtain a free credit report annually on request. In Maine, credit reports are $3 and in Connecticut, the cost for the first report requested in a 12-month period is $5.00 and $7.50 for each subsequent report. Of course, if denied credit, you can request additional free reports under federal law in these states.

You can dispute inaccurate information with the CRA. If you tell a CRA that your file contains inaccurate information, the CRA must investigate the items (usually within 30 days) by presenting to its information source all relevant evidence you submit, unless your dispute is frivolous. The source must review your evidence and report its findings to the CRA. (The source also must advise national CRAs -- to which it has provided the data -- of any error.) The CRA must give you a written report of the investigation, and a copy of your report if the investigation results in any change. If the CRA's investigation does not resolve the dispute, you may add a brief statement to your file. The CRA must normally include a summary of your statement in future reports. If an item is deleted or a dispute statement is filed, you may ask that anyone who has recently received your report be notified of the change.

CONTACT THE CREDIT BUREAUS TO COMPLAIN OR REQUEST A REPORT:
Obtain a copy of your credit report on a regular basis to monitor for changed addresses and fraudulent account information. Here's how to find the credit bureaus.

Inaccurate information must be corrected or deleted. A CRA must remove or correct inaccurate or unverified information from its files, usually within 30 days after you dispute it. However, the CRA is not required to remove accurate data from your file unless it is outdated (as described below) or cannot be verified. If your dispute results in any change to your report, the CRA cannot reinsert into your file a disputed item unless the information source verifies its accuracy and completeness. In addition, the CRA must give you a written notice telling you it has reinserted the item. The notice must include the name, address and phone number of the information source.

You can dispute inaccurate items with the source of the information. If you tell anyone -- such as a creditor who reports to a CRA -- that you dispute an item, they may not then report the information to a CRA without including a notice of your dispute. In addition, once you've notified the source of the error in writing, it may not continue to report the information if it is, in fact, an error.

Outdated information may not be reported. In most cases, a CRA may not report negative information that is more than seven years old; ten years for bankruptcies.

Access to your file is limited. A CRA may provide information about you only to people with a need (permissible purpose) recognized by the FCRA -- usually to consider an application with a creditor, insurer, employer, landlord, or other business. Only Vermont law requires your (oral) consent to access your report for credit or insurance purposes.

Your consent is required for reports that are provided to employers, or reports that contain medical information. A CRA may not give out information about you to your employer, or prospective employer, without your written consent. A CRA may not report medical information about you to creditors, insurers, or employers without your permission. An employer considering adverse action must show you the report.

OPT-OUT! Choose to exclude your name from bureau lists for unsolicited credit and insurance offers. Creditors and insurers are allowed by law to use credit reports to generate misleading junk marketing mailings. These "You've been pre-approved" letters have been implicated in theft of identity scams and also often make promises that the offerors don't have to keep. However, the law also says such offers must include a toll-free phone number for you to call if you want your name and address removed from future lists. If you call, you will hear a selection to opt-out for two years. Ignore it. Listen for the "permanent" option. Follow the instructions-- we advise opting-out permanently. The Big 3 Credit Bureaus now use the same telephone number-- (1-888-567-8688) or 1-888-5-OPTOUT. If you call one, you are opting-out with all 3 (actuually there is some sort of 4th bureau now participating, which we are investigating).

NONE OF YOUR BUSINESS! The new law also gives big banks the right to share your credit report and other information with "affiliates." Your mutual fund may be owned by a bank that will make a credit card offer to you, for example. Those banks that desire to take advantage of "affiliate-sharing" must send you a one-time offer to opt-out. The law does not require that this notice be very clear. You may have received it and tossed it, or never noticed it. They're not required to have toll-free numbers. We encourage you to opt-out. Shop around when you need financial products instead of letting your own bank send you mediocre offers. You'll need to send your bank a letter stating that you want to exercise your FCRA right to opt-out of information sharing among affiliates. Here is a sample letter. Use it to to tell the bank "None of your business!" See PIRG's Financial Privacy Pages.

You may seek damages from violators. If a CRA, a user or (in some cases) a provider of CRA data, violates the FCRA, you may sue them in state or federal court.

Credit Doctors: Bottom-feeding credit repair doctors are strictly regulated under the 1996 changes to the FCRA law. Their promises that they can "change your social security number" to hide your negative credit background are illegal. Don't give credit doctors your money, use it to pay your bills and re-build your credit. Complain to the FTC about credit doctors. No one can delete accurate negative information from your credit report. Only time can do that. Remember that the most recent information is the most important.

WHERE TO COMPLAIN:

The FCRA gives several different federal agencies authority to enforce the FCRA. If your complaint is about a credit bureau, department store, credit repair doctor, or other non-insured financial institution, complain to the Consumer Response Center, Federal Trade Commission, Washington, DC 20580. Telephone: 202-326-3761. Or use the ONLINE FTC COMPLAINT form. Complaints about financial institutions (banks and credit unions) are handled by one of several agencies. If you're not sure which is your bank's primary regulator, call your bank and ask. (The FTC will forward mis-mailed complaints.) Send a copy of all complaints to your state Attorney General, who also has jurisdiction under both state and federal laws. You can find a list of all bank and other financial regulators at the Federal Reserve, which also tells you how to complain. Ignore their advice about trying to work it out with the bank first. Copy all complaints to the bank to regulators automatically. Any bank with national or NA in its name is regulated by the OCC. Here's where to complain to the OCC.

For more information about errors on your credit report and what to do:

See what other fact sheets are available at our main consumer web site or email PIRG's Consumer Advocate (we cannot handle your complaint, nor give legal advice but we can send you more information. We also gain knowledge about problems from hearing from consumers.
or write to:
U.S. PIRG, 218 D Street SE, Washington, D.C. 20003

Don't Forget:

Keep logs of all phone calls and dates -- who you spoke with -- first and last name --and what they promised by when.

Complain to the credit bureau in writing, even if you've already called on the phone. In your written complaint, include copies (NOT ORIGINALS) of all relevant proof that the entry is wrong. After 30 days, contact the credit bureau again. Ask for a free copy of your report to review the correction. If the mistake has not been corrected, complain again. This time, send a copy of your letter to your Senators, Congressperson, state Attorney General and U.S. PIRG.

Stay away from credit repair doctors. Some sites on the internet claim they can fix your credit report and even provide "kits." Don't believe it.

It isn't true. Most accurate, but negative information, can remain at least 7 years (except in New York where shorter periods sometimes apply.).

The bureau **is** required by law to ensure that information is complete -- so if you've paid a bill they must report that fact as well as the fact that the bill had been delinquent. But accurate negative information cannot be removed by getting a new social security number, registering as a business, or whatever the doctors order. Don't give them your money, use it to pay off your bills.

Good books on credit and credit debt that we do recommend: "The Ultimate Credit Handbook," Gerrie Detweiler, and "Conquer Your Debt," by William Kent Brunette. Ask your bookseller for details on these excellent paperbacks by consumer advocates. Gerrie's book has a new updated edition out.