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Specifically, we have already instituted a practice whereby our three reporting systeas exchange with each other on a sonthly basis the names of consumers who wish to opt out. We are deleting these individuals and also those who have notified the Direct Marketing Association from all of our marketing services.

We are also committed to the use of multiple mechanisms to inform consumers about their right to make this decision.


will continue to work with the credit-granting industry to

ensure effective methods of advising consumers of their right to opt out of credit bureau nailing lists or promotions, as well as assisting in consumer education about marketing techniques, benefits and choices. We will provide literature about marketing transactions to give consumers during disclosure processes. We want them to understand how marketing works, why 1t works, and how they can effectively participate in the process. We feel it is important they understand that no

details are ever revealed about individual purchases and

transactions, and with whom they have accounts.

And we want

them to know there is never any impact on their credit file from

sales of information for marketing purposes.

Adverse Action

H.R. 4213 adds a definition of adverse action

and ACB presumes that the goal is to assure that whenever a

consumer report is used to deny a consumer benefit, the consumer

should be notified of the name and address of the consumer

reporting agency issuing the report.

We support that position.

In fact, it is industry practice to advise users of reports for check cashing and rental purposes to make the Section 615

disclosures today.

There should be no circumstances under which a report should be

a "secret" from the consumer on whom it was issued.

• Consumer report disclosures

The industry is very sensitive

to the importance of clear and easy disclosure of reports.


there are several ways we are ensuring this objective is met.

For instance, it is industry practice to disclose all credit

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We think consumers should receive free disclosure in those cases

where they have been declined from a credit reporting agency

even if the request is reasonably after after the 30-day

statutory time limit.

That is industry practice.

We understand

much of the frustration that consumers feel when they do not get

the prompt attention they deserve.

The industry is currently

making substantial investment in consumer relations systems to

respond within three working days to the consumer's

's request for disclosure. However, we do not believe disclosure should be

free of charge to consumers who have not been declined.


think they should pay a reasonable amount for the report, our

handling and our fixed expenses to provide disclosures.

• Reinvestigations

Each bill the Subcommittee is considering

today would impose a 30-day time limit on the reinvestigation of the accuracy of credit information in a consumer report. Our industry presently uses this limit as a guideline, but we strive

to complete reinvestigations much sooner.

We also provide

formal notification to the consumer of the results of the


Our industry does not charge the consumer for

these reinvestigations.

We are sympathetic to the frustrations that consumers may feel when reinvestigations by one company are not communicated to the other two credit reporting systems. That is why we have developed a common reverification form whereby the results of a reinvestigation can be shared. That process has been developed

and is now being implemented.

Our goal is that the consumer

should only have to request reverification once, and have the

results recorded by all three systems.

We are also concerned with situations where reverification

requests are either delayed or not returned. We have procedures whereby detailed records of any lack of responsiveness are maintained with proper notifications given to the credit


Obsolete Adverse Information Members of ACB feel that the use of credit criteria is a judgment call that should be left to credit granters and to the marketplace. Each credit granter must evaluate the risk being undertaken against the information that has a bearing on risk. Congress should not go beyond the present limits in the FCRA, but Congress should know that credit granters are sensitive to good public policy.

In this regard a study has been commissioned by credit reporting companies and credit granters to determine what impact the

deletion of certain aged derogatory information from the credit

report would have on the predictability of bad debt.

The study

will be completed this summer.

The results will not alter the

fact that different types of risks require different information

needs. Making a credit risk decision on an ad hoc notion of

what needs to be considered does not make sense and is

inconsistent with congressional concern about sound lending

practices currently under congressional investigation.

We believe a marketplace study can result in a positive and

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by others. However, since the legislation would mandate

creditor notification to consumers that payment history

information is provided to a consumer reporting agency, ACB

would only comment that our members have no objection to such

information being given to consumers.

We believe most major

credit granters already do so.

Our concern is over the method

required, its applicability to smaller contributors of

information, and that the resulting method educates rather than

confuses consumers.

The proposed legislation would require that credit granters give

consumers the name and address of the three largest consumer

reporting agencies.

Those three companies, Equifax, Trans Union

and TRW, have no objection to being identified to consumers as

long as the notification is not misleading and does not imply

that information from their file was used when, in fact, it was


We assume the objective here is to permit the consumer to

contact all three agencies to check the information in files. This proposal also assumes that each system owns all the offices

on their system.

As discussed earlier, this is not the case.

As a practical matter, providing the consumers with the names


and addresses of two other companies, neither one of which

furnished a report on the consumer, could merely frustrate the consumer. In those instances, where an error had occurred, it does not necessarily follow that the same error may exist in the other two systems. Furthermore, in most instances the credit

granter might not know the name and address of the credit

bureaus or the other two systems and therefore only the names

and addresses of the systems could be furnished.

The result

would be added consumer confusion.

We applaud the goal of improving consumer awareness and

information. But we caution against well intentioned disclosures that only serve to confuse an already complex


This process needs to be reconsidered so the goal

can be accomplished within the framework of the industry.

Unauthorized access


Every area where we as an industry can

do better is important to us. However, nothing concerns us more

than the unauthorized access of credit files.

We know the

Subcommittee shares this concern and sense of urgency.

And we

as an industry are doing something.

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