Permissible Purpose & End-User Requirements Flashcards

A consumer reporting agency may lawfully furnish a consumer report only to a user it has reason to believe:

Answer: Has a permissible purpose as enumerated in Section 604

CRAs are obligated under Section 607(a) to maintain reasonable procedures to limit the furnishing of reports to users with a Section 604 permissible purpose.

Which of the following is NOT a permissible purpose under FCRA Section 604?

Answer: A neighbor's personal curiosity about someone's finances

Personal curiosity has no legitimate business nexus and is not listed as a permissible purpose anywhere in Section 604.

When a creditor uses a consumer report to review an existing account, this account review purpose falls under which Section 604 provision?

Answer: Section 604(a)(3)(A) — credit transactions

Section 604(a)(3)(A) covers credit transactions, including both the extension of new credit and the review or collection of existing credit accounts.

When an end user shares a consumer report with an affiliate, the FCRA requires that:

Answer: The affiliate must independently have a permissible purpose for receiving the report

Permissible purpose is user-specific; each entity that receives or uses a consumer report must independently have a permissible purpose under Section 604.

Which type of consumer report triggers additional disclosure and notice requirements under FCRA Section 606 due to the manner in which information is gathered?

Answer: Investigative consumer report

Section 606 imposes heightened disclosure obligations for investigative consumer reports, which are compiled through personal interviews about the consumer's character, general reputation, and personal characteristics.

A creditor that takes adverse action based wholly or partly on information in a consumer report is obligated under the FCRA to:

Answer: Provide the consumer with required adverse action notices under Section 615

Section 615(a) requires any person who takes adverse action based on a consumer report to provide the consumer with specific disclosures including the CRA's name and the consumer's right to obtain a free report.

Under the FCRA, a child support enforcement agency seeking a consumer report for enforcement purposes obtains authority from:

Answer: Specific child support enforcement provisions within Section 604

The FCRA includes specific provisions authorizing child support enforcement agencies to obtain consumer reports for enforcement purposes, distinct from general government access provisions.