FCRA Regulations & Legal Framework 4 — Questions and Answers
Question 1: The FCRA's 'reasonable procedures' standard for CRAs under section 607(b) requires CRAs to follow procedures designed to ensure what?
- That reports are generated within 24 hours of any request
- Maximum accuracy of information in consumer reports (Correct answer)
- That all disputed items are removed within 30 days
- That consumers receive copies of every report issued about them
Correct answer: Maximum accuracy of information in consumer reports
Section 607(b) requires CRAs to maintain reasonable procedures to ensure maximum possible accuracy of information in consumer reports.
Question 2: Under which circumstance may a CRA provide a consumer report for employment purposes without the consumer's consent?
- Never — employment reports always require prior written consent
- When the employer has a permissible purpose and certifies compliance, but the consumer's consent is still separately required by the employer under section 604(b) (Correct answer)
- When the state law supersedes the consent requirement
- When the employer is a federal government agency
Correct answer: When the employer has a permissible purpose and certifies compliance, but the consumer's consent is still separately required by the employer under section 604(b)
For employment, the employer must have permissible purpose and separately obtain written consumer authorization under section 604(b)(2)(B) before procuring a report.
Question 3: Section 623(a)(1) of the FCRA prohibits furnishers from reporting information they know (or have reasonable cause to believe) is inaccurate. What must a furnisher do if it discovers such information has already been reported?
- Wait for the consumer to dispute before correcting
- Promptly notify the CRA and provide corrected information (Correct answer)
- File a correction with the CFPB within 30 days
- Place a dispute flag on the account until resolved
Correct answer: Promptly notify the CRA and provide corrected information
Section 623(a)(2) requires furnishers who discover previously reported information is inaccurate to promptly notify the CRA and provide correct information.
Question 4: The FCRA's civil liability provisions distinguish between 'negligent noncompliance' and 'willful noncompliance.' What additional damages are available ONLY for willful violations?
- Actual damages
- Statutory damages up to $1,000 per violation and punitive damages (Correct answer)
- Attorney's fees and costs
- Court-ordered reinvestigation
Correct answer: Statutory damages up to $1,000 per violation and punitive damages
Willful FCRA violations allow statutory damages of $100–$1,000 per violation plus punitive damages; negligent violations allow only actual damages plus fees.
Question 5: Which FCRA provision specifically governs the disposal of consumer report information by users and CRAs?
- Section 628 (Correct answer)
- Section 605B
- Section 623
- Section 616
Correct answer: Section 628
Section 628 of the FCRA requires proper disposal of consumer information derived from consumer reports to protect against unauthorized access.
Question 6: A consumer who files a complaint with the CFPB regarding a CRA's failure to investigate a dispute is exercising rights under which FCRA section?
- Section 609
- Section 611 (Correct answer)
- Section 615
- Section 620
Correct answer: Section 611
Section 611 governs CRA dispute investigation obligations, and failure to comply can trigger CFPB enforcement and private consumer lawsuits.
Question 7: Under the FCRA, which entity has enforcement authority over CRAs that are NOT subject to CFPB jurisdiction (e.g., small CRAs)?
- Only state attorneys general
- The Federal Trade Commission (FTC) (Correct answer)
- The Federal Reserve Board
- The Department of Justice
Correct answer: The Federal Trade Commission (FTC)
The FTC retains enforcement authority over CRAs and other entities not subject to CFPB supervisory authority under the FCRA.
FCRA Regulations & Legal Framework 4
The FCRA's 'reasonable procedures' standard for CRAs under section 607(b) requires CRAs to follow procedures designed to ensure what?