UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
June 9, 1998
David G. Islinger, Esq.
Jackson, Lewis, Schnitzler & Krugman
60 Washington Street
Morristown, New Jersey 07960-6844
- Re: Section 603(d) of the Fair Credit Reporting Act
Dear Mr. Islinger:
This is in response to your letter requesting the staff's opinion
on a number of issues raised by the recent amendments to the Fair
Credit Reporting Act (FCRA). Specifically, you ask whether reports
received from a consumer reporting agency (CRA) regarding a consumer's
criminal record and education, and any licenses held by the consumer
are covered by the FCRA. You also inquire as to the status of
drug tests obtained from a drug testing laboratory.
1. Do criminal background checks, educational background
checks, and license checks provided by CRAs constitute consumer
Yes. The definition of "consumer report" in Section
603(d)(1) is broad and includes information about an individual
consumer's "character, general reputation, personal characteristics,
or mode of living" when made by a CRA. Criminal histories,
education, and licenses held by consumers all involve one or more
of these factors. Accordingly, when CRAs provide such information,
they are providing consumer reports and must comply with the FCRA.
We note that a CRA that collects and provides factual information
of the type discussed above, obtained through interviews with
friends, neighbors, associates, or others with knowledge of the
consumer, is making a particular type of consumer report known
as an "investigative consumer report." In that case,
the CRA must follow the procedures set forth in Section 606 specifically
for "investigative consumer reports" as well as those
contained in Section 604(b) for "consumer reports."
These procedures are discussed in the attached staff opinion letter
2. Are drug tests consumer reports?
When a drug lab provides the results directly to the employer,
the test is not a "consumer report" under the FCRA.
When an intermediary does so, a detailed factual analysis is needed
to determine the answer. When a CRA provides the test results,
it is clearly making a "consumer report" to the employer.
We explain these responses below.
As discussed in response to your first question, the definition
of "consumer report" in the FCRA covers a great deal
of information other than credit information. Drug tests do bear
on an individual's character, general reputation, personal characteristics,
or mode of living. However, Section 603(d)(2)(A) of the FCRA excludes
from the definition of "consumer report" any report
"containing information solely as to transactions or experiences
between the consumer and the person making the report." Since
drug test reports constitute reports based on the experience of
the laboratory (applying scientific methods to test urine or other
samples from the consumer), these reports are not "consumer
reports" covered by the FCRA when they are provided directly
to the employer by the laboratory. The court in Hodge v. Texaco,
Inc., 975 F.2d 1093, 1096 (5th Cir. 1992), reached the same
Where an intermediary such as a drug counselor reports the results
of a test done by a lab, the issue of whether the communication
is a "consumer report" covered by Section 603(d) requires
a detailed review of the facts. The "transactions or experiences"
exception does not apply to the intermediary because the intermediary
does not perform the analysis. The answer, therefore, turns on
whether the intermediary is a "consumer reporting agency"
as defined in Section 603(f) of the FCRA.(1) A party that "regularly engages . . .
in the practice of assembling or evaluating . . . information
on consumers for the purpose of furnishing consumer reports to
third parties" is a CRA under that definition. If an intermediary
contributes to (or takes any action that determines) the content
of the information conveyed to an employer, we believe it is "assembling
or evaluating" the information and thus qualifies as a CRA.
However, if the inter-mediary is like the drug counselor in Hodge
case cited above (975 F.2d at 1097) who simply "acted as
a go-between" between the employer and drug lab, it does
not appear to be a CRA. Thus, an intermediary that provides only
mechanical services (such as arranging for a lab test, collecting
and forwarding samples to the lab, and transmitting test results)
probably would not be a CRA making a "consumer report."
At the other end of the scale, an intermediary that retains copies
of tests performed by drug labs and regularly sells this information
to third parties for a fee is a CRA whose reports of drug test
results are "consumer reports" covered by the FCRA.
If a drug test report is provided by a party that is indisputably
a CRA because of the general nature of its business (e.g.,
a credit bureau or employment screening service), the report would
clearly be a "consumer report" because the communication
is made by a CRA and not covered by any of the exemptions from
the definition set forth in Section 603(d).
I hope that this information is helpful to you. The opinions
set forth in this letter represent the views of the staff of the
Commission and do not necessarily represent the views of the Commission
or any particular Commissioner.
Division of Credit Practices
1. As mentioned in our answer to question
#1 above, one of the elements in the "consumer report"
definition is that the communication be made by a CRA.