Accountancy Resources
Now that you’ve seen that information about you is being collected and distributed without your consent, you may feel that your privacy has been invaded, and to some degree, you would be right. But it’s a necessary evil, since lenders wouldn’t lend to you if they weren’t able to estimate the risk it involved (or at the very least, the lending process would be grossly inefficient). Fortunately, the government has taken significant steps to protect your rights. As we mentioned above, the credit report does not contain personal information not relevant to the lending process, such as your religious or political affiliation.
For the information that does appear in the report, there are strict rules about their use that are intended to safeguard your rights. The three most important federal acts are described below. You may have additional rights under state laws. Contact your state Attorney General or local consumer protection agency for more information.
The Fair Credit Reporting Act (FCRA), enforced by the Federal Trade Commission, is designed to promote accuracy and ensure the privacy of the information used in consumer reports such as credit reports. Recent amendments to the Act expand your rights and place additional requirements on credit bureaus and other consumer reporting agencies (CRA’s). Businesses that supply information about you to CRA’s and those that use consumer reports also have new responsibilities under the law.
First, you have a right to know what’s in your report. The CRA must tell you everything in your report, including medical information, and in most cases, the sources of the information.
Second, only people with a legitimate business need are able to get a copy of your report. For example, a company is allowed to get your report if you apply for credit, insurance, employment, or to rent an apartment. That company must also sign a contract agreeing to use the data properly. A CRA may not supply medical information about you to anyone without your consent. Additionally, a CRA may not supply information about you to your employer, or to a prospective employer, without your consent.
Third, the CRA must give you a list of everyone who has requested your report within the past year (two years for employment-related requests). The Equal Credit Opportunity Act requires that anyone who takes action against you in response to a report supplied by a CRA – such as denying your application for credit, insurance, or employment – give you the name, address, and telephone number of the CRA that provided the report.
Fifth, you have the right to opt-out of unsolicited offers from creditors. Creditors and insurers may use CRA file information as a basis for sending you unsolicited offers. These offers must include a toll-free number for you to call if you want to remove your name and address from lists for two years; completing a form that the CRA provides for this purpose will keep your name off the lists permanently. Equifax, Experian, and Trans Union have websites that explain marketing list opt-outs and how to request them, but you cannot opt-out online.
Finally, you have a right to dispute your credit report if it is in error.
The Equal Credit Opportunity Act (ECOA) is designed to protect you against discrimination by creditors for any reason (other than your creditworthiness). The ECOA forbids creditors from requiring you to state your sex, race, national origin, or religion, and cannot deny you credit for these reasons, or for your age, or for the fact that you receive public assistance.
The Fair Debt Collection Practices Act (FDCPA) is designed to prevent debt collectors from engaging in unfair, deceptive, or abusive practices. Debt collectors must identify themselves to you on the phone, may contact you only between 8 am and 9 pm, and may not contact you at work if they know your employer disapproves of it. In addition, they may not harass or abuse you, or lie to you, and must stop contacting you if you ask them to in writing.
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