ASSEMBLY, No. 1098

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblymen CORODEMUS and T. SMITH

 

 

An Act concerning consumer reporting agencies and supplementing P.L.1960, c.39 (C.56:8-1 et seq.).

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. This act shall be known and may be cited as the "Fair Consumer Reporting Act."

 

    2. As used in this act:

            "Consumer" means a natural person.

            "Consumer report" means any written, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing or credit capacity which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for: (1) credit or insurance to be used primarily for personal, family or household purposes, or (2) employment purposes, or (3) other purposes authorized under section 3 of this act. The term does not include any report containing information solely as to transactions or experiences between the consumer and the person making the report, any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device, or any report in which a person who has been requested by a third party to make specific extension of credit directly or indirectly to a consumer conveys his decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made and such person makes the disclosures to the consumer required under section 17 of this act.

            "Consumer reporting agency" or "agency" means any person which, for monetary fees, dues or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties.

            "Employment purposes" means, when used in connection with a consumer report, a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee.

            "File" means, when used in connection with information on a consumer, all of the information on that consumer recorded and retained by a consumer reporting agency regardless of how the information is stored.

            "Firm offer of credit" means any offer of credit to a consumer that will be honored if, based on information in a consumer report on the consumer and other information relative to the creditworthiness of the consumer, the consumer is determined to meet the criteria used to select the consumer for the offer.

            "Investigative consumer report" means a consumer report or portion thereof in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information. However, such information shall not include specific factual information on a consumer's credit record obtained directly from a creditor of the consumer or from a consumer reporting agency when such information was obtained directly from a creditor of the consumer or from the consumer.

            "Medical information" means information or records obtained after the consent of the individual to whom it relates, from physicians or other health care practitioners, hospitals, clinics, or other medical or medically related facilities.

            "Prescreening" means a process whereby a consumer reporting agency compiles or edits for a client a list of consumers who meet specific criteria and provides such list to the client or third party on behalf of the client for the purpose of making a firm offer of credit.

            "User" means any person seeking or obtaining a consumer report for purposes authorized in section 3 of this act.

 

    3. a. A consumer reporting agency may furnish a consumer report under the following circumstances and no other:

    (1) in response to the order of a court of competent jurisdiction;

    (2) in accordance with the written instructions of the consumer to whom it relates; or

    (3) to a person which it reasonably believes:

    (a) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer; or

            (b) intends to use the information for employment purposes or

 

    (c) intends to use the information in connection with the underwriting of insurance involving the consumer; or

    (d) intends to use the information in connection with a determination of the consumer's eligibility, or continuing eligibility, for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant's financial responsibility or status; or

    (e) intends to use the information in connection with a transaction either entered into or being negotiated with a consumer, if by the terms of the transaction either party transfers an interest in real or personal property, pays money or renders services, or becomes obligated to transfer property, pay money or render services; provided, however, that the consumer who is the subject of the report, except in the case of the rental or lease of residential property, has provided permission in writing or in the same manner in which the transaction was negotiated or entered into, that a consumer report may be requested in connection with the transaction; or

    (f) intends to use the information for investigating child support cases pursuant to Title IV-D of the Social Security Act, 42 U.S.C. § 651 et seq., and P.L.1981, c.417 (C.2A:17-56.7 et seq.); or

    b. A consumer reporting agency may furnish information for the purposes of a credit transaction under subparagraph (a) of paragraph (3) of this subsection when the credit transaction is not initiated by the consumer, only if:

    (1) the consumer authorizes the consumer reporting agency to furnish the consumer credit report to the person; or

    (2) the proposed transaction involves a firm offer of credit to the consumer, the consumer reporting agency has complied with the provisions of section 4 of this act, and the consumer has not elected to have his name excluded from any list of names provided by the consumer reporting agency for purposes of reporting in connection with the potential issuance of firm offers of credit and the agency only provides the name and address of the consumer and information pertaining to a consumer which is not identified or identifiable with particular accounts or transactions of the consumer.

 

    4. a. A consumer may elect to have his name and address excluded from any list provided by a consumer reporting agency pursuant to paragraph (2) of subsection b. of section 3 of this act by notifying the consumer reporting agency, by telephone or in writing, through the notification system maintained by the consumer reporting agency pursuant to subsection c. of this section, that the consumer does not consent to any use of consumer reports relating to the consumer in connection with any transaction that is not initiated by the consumer.

    b. An election by a consumer under this section shall be effective with respect to a consumer reporting agency, and any affiliate of the consumer reporting agency, on the date on which the consumer notifies the consumer reporting agency.

    c. Each consumer reporting agency that provides prescreening lists under paragraph (2) of subsection b. of section 3 of this act in connection with a credit transaction not initiated by the consumer shall establish and maintain a notification system, including a toll-free telephone number, which permits any consumer, with appropriate identification and for whom the consumer reporting agency has a file, to notify the consumer reporting agency of the consumer's election to have the consumer's name removed from any list of names and addresses provided by the consumer reporting agency. Each consumer reporting agency which compiles and maintains files on consumers on a nationwide basis shall establish and maintain a notification system jointly with its affiliated consumer reporting agencies.

    d. Any person who uses a consumer report in connection with any credit transaction not initiated by the consumer and which consists of a firm offer of credit shall provide with any solicitation made to the consumer a clear and conspicuous statement that the consumer has a right to prohibit the use of information contained in the consumer's file with any consumer reporting agency in connection with any credit transaction that is not initiated by the consumer. The statement shall inform the consumer that he may exercise this right by notifying the consumer reporting agency by employing the notification system or joint notification system established under subsection c. of this section. A consumer may cancel or review his decision to have his name removed from prescreening lists provided under paragraph (2) of subsection b. of section 3 of this act by notifying the consumer reporting agency through the notification system established under subsection c. of this section. Nothing in this subsection shall preclude a person who uses a consumer report in connection with credit transactions not initiated by the consumer from establishing a notification system, pursuant to subsection c. of this section, and providing such toll-free telephone number on any solicitation pursuant to this subsection, which allows the person to notify each applicable consumer reporting agency on the consumer's behalf after receiving notice from the consumer of his election to have his name removed from such prescreening list or of the consumer's decision to review or cancel such a removal.

 

    5. a. Except as authorized under subsection b. of this section, no consumer reporting agency shall make any consumer report containing any of the following items of information:

    (1) Bankruptcies which, from date of adjudication of the most recent bankruptcy, antedate the report by more than fourteen years.

    (2) Suits and judgments which, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.

    (3) Paid tax liens which, from the date of payment, antedate the report by more than seven years.

    (4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.

    (5) Records of arrest, indictment, conviction of crime which, from date of disposition, release or parole, antedate the report by more than seven years.

    (6) Any other adverse item of information which antedates the report by more than seven years.

    b. The provisions of subsection a. of this section are not applicable in the case of any consumer credit report to be used in connection with:

    (1) a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $50,000 or more;

    (2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $50,000 or more; or

    (3) the employment of any individual at an annual salary which equals or which may reasonably be expected to equal $20,000 or more.

 

    6. a. A person may not procure or cause to be prepared an investigative consumer report on any consumer unless:

     (1) It is clearly and accurately disclosed in writing to the consumer, prior to requesting the consumer reporting agency to prepare the report, that an investigative consumer report commonly includes information as to the consumer's character, general reputation, personal characteristics, and mode of living, and the disclosure includes the precise nature and scope of the investigation requested and the right of the consumer to have a copy of the report upon request; and

    (2) the consumer provides the person requesting the report written permission to obtain the investigative consumer report prior to the person making the request to the consumer reporting agency.

    b. The consumer reporting agency shall, upon the request of the consumer, provide to the consumer a copy of such report upon its completion.

    c. No person may be held liable for any violation of any provision of this section if he proves by a preponderance of the evidence that at the time of the violation he maintained reasonable procedures to assure compliance with the provisions of this section.

 

    7. a. Every consumer reporting agency shall maintain reasonable procedures designed to avoid violation of section 5 of this act and to limit the furnishing of consumer reports to the purposes listed under section 3 of this act. These procedures shall require that prospective users of information identify themselves, certify the purposes for which the information is sought, and certify that the information will be used for no other purpose. Every consumer reporting agency shall make a reasonable effort to verify the identity of a new prospective user and the uses certified by such prospective user prior to furnishing such user a consumer report. No consumer reporting agency may furnish a consumer report to any person if it has reasonable grounds for believing that the consumer report will not be used for a purpose listed in section 3 of this act.

    b. Whenever a consumer reporting agency prepares or disseminates a consumer report it shall follow reasonable procedures to assure maximum possible accuracy and completeness of the information concerning the consumer about whom the report relates.

 

    8. a. Every person who furnishes information to a consumer reporting agency shall follow reasonable procedures to ensure that the information reported to a consumer reporting agency is accurate and complete. No person shall provide information to a consumer reporting agency if such person knows or has reasonable cause to believe such information is not accurate or complete.

    b. A person who: (1) in the ordinary course of business regularly and on a routine basis furnishes information to one or more consumer reporting agencies about the person's own transactions or experiences with one or more consumers, and (2) determines that information on a specific transaction or experience so provided to a consumer reporting agency is not complete or accurate, shall promptly notify the consumer reporting agency of such determination and provide to the consumer reporting agency any corrections to that information, or any additional information, which is necessary to make the information provided by the person to the consumer reporting agency complete and accurate.

    c. While the completeness or accuracy of any information on a specific transaction or experience furnished by any person to a consumer reporting agency is subject to a continuing bona fide dispute between the affected consumer and that person, the person shall not furnish the information to any consumer reporting agency without also including a notice that the information is disputed by the consumer; provided, further, that no person shall report to a consumer reporting agency that a consumer's account is delinquent until the bona fide dispute is resolved pursuant to the federal "Fair Credit Billing Act," 15 U.S.C. § 1666 et seq.

    d. A person who regularly furnishes information to a consumer reporting agency regarding a consumer who has an open-end credit account with such person, and which account is closed by the consumer, shall notify the consumer reporting agency of the closure of the account by the consumer, in information regularly furnished for the period in which the account is closed.

    e. A person who places a delinquent account for collection, internally or by referral to a third party, charges the delinquent account to profit or loss, or takes similar action, and subsequently furnishes information to a consumer reporting agency regarding such action, shall include within the information furnished, the approximate commencement date of the delinquency which gave rise to the action, unless such date was previously reported to the consumer reporting agency. Nothing contained in this section shall be deemed to require that a delinquency must be reported to a consumer reporting agency.

    f. Upon receiving notice of a dispute notice pursuant to subsection a. of section 12 of this act with regard to the completeness or accuracy of any information provided to a consumer reporting agency, the person that provided the information shall: (1) complete an investigation with respect to the disputed information and report to the consumer reporting agency the results of that investigation within 30 business days of the date the consumer reporting agency receives the notice of dispute from the consumer in accordance with subsection a. of section 12 of this act, and (2) review relevant information submitted to it.

    g. A person who furnishes information to a consumer reporting agency shall be liable for failure to comply with any provision of this section, unless the person furnishing the information establishes by a preponderance of the evidence that, at the time of the failure to comply with any provision of this section, that person maintained reasonable procedures to comply with such provisions.

 

    9. Notwithstanding the provisions of section 3 of this act, a consumer reporting agency may furnish identifying information respecting any consumer, limited to his name, address, former addresses, places of employment, or former places of employment, to a government agency.

 

    10. a. Every consumer reporting agency shall, upon request and proper identification of any consumer, clearly and accurately disclose to the consumer:

    (1) the nature, contents and substance of all information, except medical information, in its file on the consumer at the time of the request, and which is obtainable based upon the identifying information supplied by the consumer when making the request, and if the consumer has made a written request, deliver a written copy or photocopy of all such information except any code identifications which are used solely for purposes of transferring such information to and from consumer reporting agencies; provided, however, that the names of the users corresponding to the code identifications shall be disclosed to the consumer; provided, further, that the agency shall provide a clear, simple and plain meaning explanation of the information provided under this section and such explanation shall be in a readable format and type, which shall in no case be smaller than 10 point type;

    (2) the sources of all credit information obtained through routine credit reporting or through any other credit reporting techniques in the file at the time of the request, except that the sources of information acquired solely for use in preparing an investigative consumer report and actually used for no other purpose need not be disclosed; provided, however, that in the event an action is brought, such sources shall be available to the plaintiff under appropriate discovery procedures in the court in which the action is brought; and

    (3) the recipients of any consumer report on the consumer which it has furnished for employment purposes within the two-year period preceding the request, and for any other purpose within the six-month period preceding the request.

    b. Every consumer reporting agency, upon contact by a consumer by phone, mail or in person regarding information which may be contained in the agency files regarding that consumer, shall with each written disclosure, or in response to a request by the consumer to be advised as to his rights, promptly advise the consumer of the consumer's rights under this section. The written notice shall be in a clear and conspicuous format and be no smaller than 10 point type. The notice shall inform the consumer of the consumer's rights under this act, provided in a clear and conspicuous manner, in substantially the following manner:

    "You have a right to obtain a copy of your credit file from a consumer credit reporting agency. You may be charged a reasonable fee not exceeding $8. There is no fee, however, if you have been turned down for credit, employment, insurance or rental dwelling because of information in your credit report within the preceding 60 days. The consumer credit reporting agency must provide someone to help you interpret the information in your credit file. Each calendar year you are entitled to receive, upon request, one free consumer credit report.

    You have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit repair company or credit service organization has the right to have accurate, current and verifiable information removed from your credit report. In most cases, under state and federal law, the consumer credit reporting agency must remove accurate, negative information from your report only if it is over seven years old, and must remove bankruptcy information only if it is over 10 years old.

    If you have notified a consumer credit reporting agency in writing that you dispute the accuracy of information in your file, the consumer reporting credit reporting agency must then, within 30 business days, reinvestigate and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service. Any pertinent information and copies of all documents you have concerning a dispute should be given to the consumer credit reporting agency.

    If reinvestigation does not resolve the dispute to your satisfaction, you may send a statement to the consumer credit reporting agency to keep in your file, explaining why you think the record is inaccurate. The consumer credit reporting agency must include your statement about the disputed information in a report it issues about you.

    You have a right to receive a record of all inquires relating to a credit transaction initiated in the six months preceding your request, or two years in the case of a credit report used for employment purposes. This record shall include the recipients of any consumer credit report.

    You have the right to opt out of any prescreening lists compiled by or with the assistance of a consumer credit reporting agency by calling the agency's toll-free telephone number or contacting the agency in writing. You may be entitled to collect compensation, in certain circumstances, if you are damaged by a person's negligent or intentional failure to comply with the provisions of the credit reporting act."

 

    11. a. A consumer reporting agency shall make the disclosures required under section 10 of this act during normal business hours and on reasonable notice.

    b. The disclosures required under section 10 of this act shall be made to the consumer:

    (1) in person if he appears in person and furnishes proper identification; or

    (2) by telephone if he has made a written request, with proper identification, for telephone disclosure and the toll charge, if any, for the telephone call is prepaid by or charged directly to the consumer; or

            (3) by certified mail, if he has made a written request, return receipt requested, delivered to addressee only.

    c. Any consumer reporting agency shall provide a toll-free telephone number and trained personnel to explain to the consumer any information furnished to him pursuant to section 10 of this act.

    d. The consumer shall be permitted to be accompanied by one other person of his choosing, who shall furnish reasonable identification. A consumer reporting agency may require the consumer to furnish a written statement granting permission to the consumer reporting agency to discuss the consumer's file in such person's presence.

     e. Except as provided in sections 18 and 19 of this act, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, any user of information, or any person who furnishes information to a consumer reporting agency, base on information disclosed pursuant to this section or section 10 or 17 of this act, except as to false information furnished with malice or willful intent to injure such consumer.

    f. No person shall be held liable for any violation of subsection b. of this section if such person proves by a preponderance of evidence that at the time of the alleged violation such person maintained reasonable procedures to assure compliance with that subsection b.

 

    12. a. If the completeness or accuracy of any item of information in his file is disputed by a consumer, and such dispute is directly conveyed to the consumer reporting agency by the consumer, the consumer reporting agency shall, within 30 business days of the date the consumer reporting agency receives notice from the consumer, reinvestigate and record the current status of such information unless it has reasonable grounds to believe that the dispute is frivolous or irrelevant; including by reason of a failure of the consumer to provide sufficient information, as requested by the consumer reporting agency, to resolve the dispute. Unless the consumer reporting agency determines that the dispute is frivolous or irrelevant within five business days of the date the consumer reporting agency receives notice of the dispute under this section, the agency shall notify any person who provided the information in dispute at the address provided by the person. A consumer reporting agency may require that disputes by consumers be in writing.

    b. If the consumer reporting agency determines that the dispute is frivolous or irrelevant, it shall notify the consumer by mail or, if authorized by the consumer for that purpose, by any other means available to the consumer reporting agency, within five business days after the determination is made that it is terminating its reinvestigation of the item of information. In this notification the consumer reporting agency shall state the specific reasons why it has determined that the consumer's dispute is frivolous or irrelevant. The presence of contradictory information in the consumer's file shall not in and of itself constitute grounds for believing the dispute to be frivolous or irrelevant.

    c. If after reinvestigation of the information, it is found to be inaccurate or can no longer be verified, the consumer reporting agency shall within three business days delete the information.

    d. If the reinvestigation does not resolve the dispute, the consumer may file a statement setting forth the nature of the dispute.

    e. Within 10 business days after the completion of a reinvestigation, the agency shall provide the consumer with written information, free of charge, that includes:

    (1) a statement that the reinvestigation is completed,

    (2) a consumer report that is based on the consumer's file as that file is revised as a result of the reinvestigation,

    (3) a description or indication of any changes made in the consumer report as a result of the revisions,

    (4) notice that, if requested by the consumer, a description of the procedure used to determine the accuracy and completeness of the information shall be provided to the consumer by the consumer reporting agency, including the business name, address and telephone number of any person who furnished information contacted in connection with the information,

    (5) notice that the consumer has the right to add a statement to the consumer's file disputing the accuracy or completeness of the information,

    (6) notice that the consumer has the right to request that the consumer reporting agency furnish notifications under subsections g. and i. of this section, and

    (7) notice that the consumer has a right to obtain all information required to be disclosed under section 10 of this act.

    f. Whenever a statement of dispute is filed, the consumer reporting agency shall, in any subsequent consumer report containing the information in question, clearly note that it is disputed by the consumer and provide the consumer's statement as part of its report.

    g. Following any deletion of information which is found not to be accurate, or whose accuracy can no longer be verified, the consumer reporting agency shall, upon the request of the consumer, within 15 business days, furnish notification to any person who has within two years prior thereto received a consumer report for employment purposes, or within six months prior thereto received a consumer report for any other purpose, which contained the deleted item, that the item has been deleted.

    h. A consumer reporting agency shall accept the consumer's version of the disputed information and correct or delete the disputed item when the consumer submits to the consumer reporting agency documentation obtained from the source of the item in dispute or from public records confirming that the report was inaccurate or incomplete, unless the consumer reporting agency in good faith has substantial reason to doubt the authenticity of the documentation, or the completeness of the information provided.

    i. No information may be reinserted in a consumer's file after having been deleted pursuant to this section unless the person who furnishes the information to be reinserted verifies that the information is accurate. If any information so deleted from a consumer's file is reinserted in the file, the consumer reporting agency shall promptly notify the consumer of the reinsertion in writing or, if authorized by the consumer for that purpose, by any other means available to the consumer reporting agency. As part of, or in addition to, the notice, the consumer reporting agency shall, within five business days of reinserting the information, provide, in writing to the consumer:

    (1) a statement that the disputed information has been reinstated;

    (2) a notice that the agency will provide to the consumer, within 15 days following a request, the name, address and telephone number of any person who furnished information in connection with the reinsertion;

    (3) the toll-free telephone number of the consumer reporting agency that the consumer may use to obtain the name, address and telephone number; and

    (4) a notice that the consumer has the right to add a statement to his file disputing the accuracy or completeness of the information.

 

    13. a. A consumer reporting agency shall make all disclosures pursuant to section 10 of this act without charge to the consumer if the consumer makes a request under section 10 of this act within 60 days after receipt by the consumer of a notification pursuant to section 17 of this act or notification from a debt collection agency affiliated with the consumer reporting agency stating that the consumer's credit rating may be or has been adversely affected.

    b. Except as provided in subsection c. of this section, a consumer reporting agency shall not charge a consumer for any disclosures or a copy of a consumer report requested pursuant to section 12 of this act.

    c. Except as otherwise provided, the consumer reporting agency may impose a reasonable charge, not to exceed $8:

    (1) for making disclosures to a consumer pursuant to section 10 of this act, the charge for which shall be indicated to the consumer prior to making disclosure; and

    (2) for furnishing notifications, statements or summaries, to a person pursuant to subsection g. of section 12 of this act, the charge for which shall be indicated to the consumer prior to furnishing the information.

    d. Each consumer reporting agency which compiles and maintains files on consumers on a nationwide basis shall furnish without charge to any consumer who has provided verification of his identity and who meets other requirements as set forth in section 11 of this act and who requests a copy of his consumer report, one complete consumer report per calendar year.

    e. Each consumer reporting agency which does not compile and maintain files on consumers on a nationwide basis shall furnish, for a charge not to exceed $5, to any consumer who has provided verification of his identity and who meets other requirements as set forth in section 11 of this act and who requests a copy of his consumer report, one complete consumer report per calendar year.

 

    14. a. A consumer reporting agency which furnishes a consumer report for employment purposes and which for that purpose compiles and reports items of information on consumers which are matters of public record and are likely to have an adverse effect upon a consumer's ability to obtain employment shall, at the time such public record information is reported to the user of the consumer report, notify the consumer of the fact that public record information is being reported by the consumer reporting agency, together with the name and address of the person to whom the information is being reported; or maintain strict procedures designed to insure that whenever public record information which is likely to have an adverse effect on a consumer's ability to obtain employment is reported it is complete and up to date. For purposes of this section, items of public record relating to arrests, indictments, convictions, suits, tax liens and outstanding judgments shall be considered up to date if the current public record status of the item at the time of the report is reported. Nothing contained in this section shall permit the use of public record information otherwise prohibited by section 5 of this act.

    b. A consumer reporting agency which furnishes a consumer report for employment purposes shall enter into an agreement with the user of the consumer report which provides that no consumer report may be requested by the user until and unless the user has provided written notice to the employee or prospective employee that a consumer report regarding the employee or prospective employee will be requested. For current employees, notification in an employee manual shall be sufficient for the purpose of this section.

 

    15. A consumer reporting agency which compiles and reports items of information on consumers which are matters of public record, for purpose of furnishing a consumer report, shall:

    a. Maintain reasonable procedures designed to insure that whenever public record information is reported in a consumer report, it is complete and up to date to the extent practicable. It shall be deemed a reasonable procedure for a consumer reporting agency to accurately report the status of public record information as of the date recorded in its files provided that the information is updated on a regular basis.

    b. When conducting a reinvestigation as required by subsection a. of section 12 of this act, a consumer reporting agency shall promptly record and report the current status of the public record.

    c. Nothing contained in this section shall permit the use of public record information otherwise prohibited under section 5 of this act.


    16. Whenever a consumer reporting agency prepares an investigative consumer report, no adverse information in the consumer report, other than information which is a matter of public record, may be included in a subsequent consumer report unless the adverse information has been verified in the process of making such subsequent consumer report, or the adverse information was received within the three-month period preceding the date the subsequent report is furnished.

 

    17. a. Whenever credit or insurance for personal, family or household purposes, or employment involving a consumer is denied or terminated or the charge for such credit or insurance is increased either wholly or partly or whenever a consumer's line of credit is reduced, except when the consumer is delinquent with regard to such line of credit, because of information contained in a consumer report from a consumer reporting agency, the user of the consumer report shall, within 10 business days of its decision to deny or terminate such credit, insurance or employment, or to increase the charge for such credit or insurance, or to reduce a consumer's line of credit, except when the consumer is delinquent with regard to such line of credit, notify such consumer in writing against whom such adverse action has been taken. The notice shall be in a clear and conspicuous format, no smaller than 10 point type, and shall contain the name, address, and toll-free telephone number of any consumer reporting agency which provided any consumer report which was reviewed or otherwise taken into account in the making of such adverse action and shall inform the consumer of his rights in substantially the following manner:

    "You have the right to obtain a free copy of your credit report within 60 days from the consumer credit reporting agency which has been identified on this notice. The consumer credit reporting agency must provide someone to help you interpret the information on you credit report. Each calendar year you are entitled to receive, upon request, one free consumer report.

    You have the right to dispute inaccurate information by contacting the consumer credit reporting agency directly. If you have notified a consumer credit reporting agency in writing that you dispute the accuracy of information in your file, the agency must then, within 30 business days, reinvestigate and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service.

    If reinvestigation does not resolve the dispute to your satisfaction, you may send a statement to the consumer credit reporting agency, to be kept in your file, explaining why you think the record is inaccurate. The consumer credit reporting agency must include your statement about the disputed information in a report it issues about you.

    b. Whenever credit for personal, family or household purposes involving a consumer is denied or the charge for such credit is increased either wholly or partly because of information obtained from a person other than a consumer reporting agency bearing upon the consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, the user of such information shall, within a reasonable period of time, upon the consumer's written request for the reasons for such adverse action received within 60 days after learning of such adverse action, disclose the nature of the information to the consumer. The user of such information shall clearly and accurately disclose to the consumer his right to make such written request at the time such adverse action is communicated to the consumer.

    c. No person shall be held liable for a violation of any provision of this section if he proves by a preponderance of the evidence that at the time of the alleged violation he maintained reasonable procedures to assure compliance with the provisions of subsections a. and b. of this section.

 

    18. a. Any person who knowingly and willfully obtains information relative to a consumer from a consumer reporting agency under false pretenses shall be guilty of a crime of the fourth degree.

    b. Any person who is convicted of knowingly and willfully introducing, attempting to introduce or causing to be introduced, false information into a consumer reporting agency's files for the purpose of damaging or enhancing the credit information of any individual shall be guilty of a crime of the fourth degree.

    c. Any officer or employee of a consumer reporting agency who knowingly and willfully provides information concerning an individual from the agency's files to a person not authorized to receive that information shall be guilty of a crime of the fourth degree.

 

    19. A violation of any provision of sections 2 to 17 of this act, inclusive, is deemed to be an unlawful practice.

 

    20. This act shall take effect on the 180th day following enactment.

 

 

STATEMENT

 

    This bill regulates the practices of consumer reporting agencies. It provides protection for consumers by limiting who may receive consumer reports, requiring distribution of certain consumer information and providing for the correction of incorrect or incomplete information in a consumer's file. Consumer reports may be used in determining a consumer's eligibility for credit, insurance or employment.

    A consumer reporting agency may only furnish a consumer report in response to a court order; by request of the consumer; or if the person requesting the report intends to use the information in regard to the extension of credit, the underwriting of insurance, employment or investigating child support cases.

    The bill limits the age of the various information in a consumer's report except when that report is used in connection with a credit transaction with a face value of $50,000 or more, underwriting of life insurance with a face value of $50,000 or more, or employment with an annual salary of $20,000 or more.

    Consumer reporting agencies must disclose to a consumer, upon request, the contents and substance of all information (except medical) in its file on the consumer. Agencies must also disclose the source of all information, and the recipients of any report regarding the consumer which it has furnished for employment purposes within the previous two years and for any other purpose within the last six months. Upon contact by a consumer regarding information in his file, a consumer reporting agency must advise the consumer of his rights under the bill. Consumer reporting agencies must also maintain a toll-free telephone number and trained personnel to explain to the consumer any information furnished to him.

    The bill requires consumer reporting agencies to investigate disputed information within 30 business days. Within 10 business days after reinvestigation, the agency must provide the consumer written notice of its findings with respect to the disputed information, along with a copy of the consumer's report as it stands after reinvestigation. The agency must also notify the consumer that he has the right to add a statement disputing the accuracy or completeness of an item and the right to request the agency to furnish notification to any person who has received an inaccurate report. If the information is found to be inaccurate or cannot be verified, the agency must delete the information within three days. If reinvestigation does not resolve a dispute, the consumer may file a statement with the agency setting forth the nature of the dispute, which statement must be provided as part of the agency's report. Following the deletion of inaccurate or unverified information or following the dispute of any information, the consumer reporting agency must, upon request, within 15 days, notify any person who has received a copy of the inaccurate or disputed report within two years for employment purposes or six months for any other purpose.

    The bill requires consumer reporting agencies which compile reports on a national basis to provide a consumer with one free copy of his report annually upon request and consumer reporting agencies which do not compile information on a national basis to provide a consumer with a copy of his report annually upon request at a charge not to exceed $5.

    The bill allows a consumer to remove his name and address from any list provided by a consumer reporting agency for the use of pre-screening for offers of credit. It regulates investigative reporting (reports on a consumer's character, general reputation, personal characteristics and mode of living) by requiring automatic disclosure by a consumer reporting agency of the nature and scope of an investigative report and by requiring specific written permission by the consumer who is the potential subject of the report.

    A provider of information to a consumer reporting agency is prohibited from providing information to a consumer reporting agency if he has reason to believe it is incomplete or inaccurate. Upon being notified of a dispute, the provider of the information under dispute is prohibited from furnishing that information to any consumer reporting agency without also including a notice that the information is being disputed by the consumer, and the provider of the information under dispute must complete an investigation with respect to the disputed item within 30 business days.

    When a consumer report is used in denying credit, insurance or employment, the grantor of credit, underwriter or employer, as the case may be, must notify the consumer or employee within 10 days of its decision and the notice must contain the name, address and toll-free telephone number of any consumer reporting agency which provided any consumer report that was used in the decision and inform the consumer or employee of his rights under the bill.

 

 

 

"Fair Consumer Reporting Act."