UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Bureau of Consumer Protection
June 12, 1998
Richard W. Hauxwell, CEO
Accufax Div., Southwest
P.O. Box 35563
Tulsa, OK 74153-0563
Dear Mr. Hauxwell:
Re: Sections 604 and 606 of the Fair Credit Reporting
This is in response to your letter asking for clarification of
sections 604 and 606 of the Fair Credit Reporting Act ("FCRA").
You note that your company is a consumer reporting agency and
that you are asking these questions on behalf of your clients.
Your questions are addressed below in the order in which you presented
1. Is it safe for us to assume, based on your opinion
letter to Mr. Richard Steer, that we can combine the disclosure
and release form, which includes applicant identifiers, in one
form such as the enclosed sample?
Section 604(b) of the FCRA requires any employer who intends
to obtain a consumer report for employment purposes to disclose
this to the applicant or employee (in a document that consists
solely of the disclosure) and to obtain the applicant or employee's
written permission. As noted in the letter you cited (Steer,
10/21/97), it is our position that the disclosure notice and the
authorization may be combined. If they are combined, identifying
information (such as date of birth, Social Security number, driver's
license number, and current and former addresses) may be included
in the form. However, the form should not contain any extraneous
While we believe that you may combine the disclosure and authorization
(and include identifying information) as you have in the draft
form that you included with your letter, we note that your draft
disclosure includes a waiver by the consumer of his or her rights
under the FCRA. The inclusion of such a waiver in a disclosure
form will violate Section 604(b)(2)(A) of the FCRA, which requires
that a disclosure consist "solely" of the disclosure
that a consumer report may be obtained for employment purposes.
Moreover, it is a general principle of law that benefits provided
to citizens by federal statute generally may not be waived by
private agreement unless Congress intended such a result. Brooklyn
Savings Bank v. O'Neill, 324 U.S. 697 (1945). We note
that no authorization for a waiver is contained in the FCRA; nor
does the legislative history show that Congress intended that
consumers should be able to sign away their legal rights under
the Act.(1) Accordingly, employers and other users of
information covered by the FCRA may not require consumers to waive
their rights under the law.
2. Our members would also like further clarification
with regard to Section 606 as to when a Summary of Rights should
be provided to the applicant. The language of the law is confusing.
Section 606 of the FCRA mandates that specific procedures be
followed when an investi-gative consumer report is requested by
an employer or other user who has a permissible purpose to obtain
the report. First, Section 606(a)(1)(A) requires any person procuring
an investigative consumer report to disclose this fact to the
affected consumer not later than three days after the date on
which the report was first requested. Second, Section 606(a)(1)(B)
requires that the dis-closure include a statement of the consumer's
right to obtain additional information and a copy of the summary
of consumer rights prescribed by the Commission. Finally, Section
606(b) sets out the information that must be disclosed when the
consumer requests a disclosure pursuant to Section 606(a)(1)(B).
The issue that you raise concerns exactly at what point the Commission's
summary of rights must be sent. The language of Section 606(a)(1)(B)
is not entirely clear in mandating that the disclosure "includes
a statement informing the consumer of his right to request the
additional disclosures provided for under subsection (b) of this
section [the nature and scope of the inves-tigation] and the written
summary of the rights of the consumer prepared pursuant to section
609(c)." As you can see, the reference to the summary of
rights comes after a reference to sub-part 606(b), but in a general
discussion of the content of the sub-part 606(a)(1)(A) notice.
There are two possible interpretations of this ambiguous language:
(1) that Congress in-tended for the summary to be sent with the
initial Section 606(a)(1)(A) notice (that an investiga-tive consumer
report has been or may be procured); or (2) that Congress intended
that the sum-mary be provided with the subsequent Section 606(b)
disclosure of the "nature and scope" of the investigation.
The Commission's "Notice to Users of Consumer Reports: Obligations
of Users Under the FCRA,"(2)
states that the summary of rights should be provided with the
Section 606(a) notice that an investigative consumer report has
been or may be obtained. However, because the statutory language
may be interpreted to require that the summary be sent with the
subsequent Section 606(b) disclosure, it is unlikely that the
Commission's staff would recommend any en-forcement action if
the notice is sent with the Section 606(b) notice instead of the
Section 606(a) notice.
3. We would like your opinion regarding end-user
organizations which procure criminal and other public record information
for employment purposes directly from a federal, state, or county
record repository. Would the government repository (agency) providing
the information directly to the end-user organization ... requesting
the information be considered a consumer reporting agency and
subject to the same laws as a privately held consumer reporting
In general, information that is obtained by an employer directly
from a federal, state or county record repository is not a "consumer
report" because the repository (such as a courthouse or a
state law enforcement agency) is not normally a "consumer
reporting agency" and is itself not covered by the FCRA.
The attached staff letters (Copple, 6/10/98; Goeke,
6/9/98) discuss this issue in more detail. Therefore, an employer
who obtains information directly from a public record source is
not subject to the FCRA as to that information. However, because
of the fact that information in public record sources may be inaccurate
or incomplete, we believe that em-ployers who use this type of
information should voluntarily disclose to consumers the nature
and substance of any public record information that they rely
upon in taking any adverse action. If the information is, in fact,
inaccurate or incomplete, the consumer may then take steps to
correct the problem.
I hope that this information is helpful to you. The views that
are expressed above are those of the Commission's staff and not
the views of the Commission itself.
Division of Credit Practices
1. The FCRA is part of the Consumer
Credit Protection Act, 15 U.S.C. § 1601. We note that the
Truth In Lending Act, which is Subchapter I of the Consumer Credit
Protection Act, does permit consumers to waive certain rights.
2. The Commission's notice may be found
at 16 C.F.R. § 601, Appendix C (1997).