Permissible Purpose & End-User Requirements Flashcards

Under FCRA Section 604, which of the following constitutes a permissible purpose for obtaining a consumer report?

Answer: A creditor reviewing an account for credit extension

Section 604(a)(3)(A) explicitly permits creditors to obtain consumer reports when reviewing or collecting on accounts for credit purposes.

Which party bears primary responsibility for certifying permissible purpose before accessing a consumer report from a CRA?

Answer: The end user requesting the report

Under the FCRA, end users must certify to the CRA that they have a permissible purpose before the CRA may furnish the consumer report.

A landlord seeking a consumer report on a prospective tenant would rely on which permissible purpose under Section 604?

Answer: Legitimate business need in connection with a transaction initiated by the consumer

Section 604(a)(3)(F) allows access for a legitimate business need in connection with a business transaction initiated by the consumer, which covers residential rental applications.

Under the FCRA, obtaining a consumer report under false pretenses exposes the violator to:

Answer: Civil liability and potential criminal prosecution

Section 619 provides criminal penalties for obtaining reports under false pretenses, and Section 616 provides civil liability, making both exposures applicable.

Which permissible purpose specifically requires written authorization from the consumer before a report may be procured?

Answer: Employment purposes

FCRA Section 604(b) requires employers to obtain written authorization from the consumer before procuring a consumer report for employment purposes.

A company that assembles and merges consumer report information from multiple CRAs and resells it to end users is classified under the FCRA as a:

Answer: Consumer reporting agency acting as a reseller

The FCRA defines a reseller as a consumer reporting agency that assembles information from other CRAs and resells it; resellers bear their own FCRA obligations.

Which FCRA provision authorizes a government agency to obtain a consumer report for determining eligibility for a government-granted license?

Answer: Section 604(a)(3)(D) — government licensing and benefit eligibility

Section 604(a)(3)(D) specifically permits government agencies to obtain consumer reports when determining eligibility for a license or other benefit granted by a governmental instrumentality.