CREDIT CORNER

Erroneous FCRA Email Circulating on Internet

 

 

You can now add information about the Fair Credit Reporting ACT (FCRA) to the list of misleading email messages circulating throughout the Internet.

 

            A recent false alarm about the FCRA has been circulating around the Capitol and throughout the Internet.  This email contains misleading information about the FCRA, the federal law that regulates the activities of consumer reporting agencies, users of credit reports and data furnishers.

 

            The email warns that the FCRA will expire at the end of 2003.  In actuality, Section 624 of the ACT (15 USC Section 1681t) pre-empts states from placing additional restrictions on credit reporting activity in certain areas.  Those specified exemptions sunset on January 4, 2004.  After that date, state legislatures could enact laws more restrictive than the FCRA in those specifically designated categories.

 

            The email urges consumers to write to the Federal Trade Commission (FTC) to stop the law from expiring.  In actuality, the latest issue of the Privacy Journal notes that it may be most beneficial to consumers if the limited pre-emption to state law expired.  By doing nothing, the Privacy Journal reports, states could enact more stringent legislation to limit sharing of credit information among affiliated companies and set timetables for credit bureaus to process consumers’ requests for correction.

 

            Representatives of credit reporting companies and credit grantors, however, are hoping to expand the list of provisions to pre-empt action by state legislatures.  Already, states and even counties are enacting legislation with language more stringent than the FCRA.  In California, for example, San Mateo County recently approved a measure, which would force financial services firms in the county to get customers’ permission before sharing their data with third parties.  The initiative would also allow customers to opt out of having information shared between affiliates of the same company.

 

            This misleading email joins an earlier email hoax first seen last year.  This email, which is still circulating on the Internet, reports that, “four major credit bureaus in the US will be allowed, starting July 1, to release your credit info, mailing addresses, phone numbers, etc. to anyone who requests it.”  The email message then provides a phone number so the consumer can opt out of having this information released – as long as the consumer provides a Social Security number.

 

            The law being referred to be the Gramm-Leach-Bliley Act, which requires that, financial institutions provide information to their customers about their privacy policies and allow customers the opportunity to restrict or opt out of having the financial institution from sharing some of this information to unaffiliated third parties.  For additional information on the Gramm-Leach-Bliley Act, please visit http://www.ftc.gov/privacy/glbact/