What is the new FCRA law?
The Fair Credit Reporting Act (FCRA) is a federal law that governs the collection, use, and dissemination of consumer credit information. The FCRA was initially enacted in 1970 and has been amended several times over the years to keep up with changes in technology and consumer protection needs. The most recent amendment, known as the FCRA 2018, brings several new provisions and updates to the existing regulations. This article will provide an overview of the new FCRA law and its implications for consumers and businesses alike.
Key Changes in the New FCRA Law
1. Enhanced Notice Requirements
One of the significant changes in the new FCRA law is the enhancement of notice requirements for consumer reporting agencies (CRAs). CRAs are now required to provide more detailed and clear notices to consumers about the information they collect and how it is used. This includes providing a summary of the FCRA rights and a detailed explanation of the information being reported.
2. Increased Consumer Access to Free Credit Reports
The new FCRA law also includes provisions that make it easier for consumers to access their free credit reports. Consumers are now entitled to receive a free credit report from each of the three major CRAs (Equifax, Experian, and TransUnion) once every 12 months. This is an expansion of the previous rule, which allowed consumers to receive one free credit report per year.
3. Improved Accuracy and Integrity of Credit Reports
The FCRA 2018 emphasizes the importance of accuracy and integrity in credit reports. CRAs are now required to investigate disputes raised by consumers within 30 days and correct any inaccuracies found. Additionally, CRAs must provide consumers with a written notice of any changes made to their credit reports and the reasons for those changes.
4. Expanded Rights for Identity Theft Victims
The new FCRA law provides additional protections for identity theft victims. Consumers who have been victims of identity theft can now place a fraud alert on their credit reports, which will require creditors to take additional steps to verify the identity of the person applying for credit. Additionally, identity theft victims are entitled to a free credit report from each CRA for a 12-month period following the placement of the fraud alert.
5. Enhanced Disclosures for Employment Screening
The FCRA 2018 also addresses the use of credit reports for employment purposes. Employers are now required to provide written notice to applicants and employees about the nature and scope of the credit report being requested, as well as the potential adverse action that may result from the report. Employers must also obtain the consumer’s written consent before obtaining their credit report.
Conclusion
The new FCRA law brings several important updates and enhancements to the existing regulations, aiming to provide better protection for consumers and improve the accuracy and integrity of credit reports. By ensuring that consumers have access to their credit information, understanding how it is used, and having the ability to dispute inaccuracies, the FCRA 2018 helps maintain a fair and transparent credit reporting system. Both consumers and businesses should familiarize themselves with the new provisions to ensure compliance and make informed decisions regarding credit reporting and employment screening.
