UNITED STATES GOVERNMENT
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
of Credit Practices
Bureau of Consumer Protection
Clarke W. Brinckerhoff
June 26, 1998
Ms. Stacy Lee
Senior Unit Manager
PMSI - Compliance
Waco, Texas 76712
Re: Sections 603(f), 609,
and 612 of the Fair Credit Reporting Act
Dear Ms. Lee:
This responds to your letter about the status
under the Fair Credit Reporting Act ("FCRA") of the
"TelePro" service that your company, PMSI, provides
to the life, health, disability income, and long-term care insurance
Your letter describes the service as "procurement
of medical records/attending physician statements for insurance
underwriting purposes. These records are not
stored or maintained. Copies are sent to PMSI and PMSI then forwards
the copies on to the insurance company." In a later phone
call, you stated that the only function performed by PMSI in providing
the TelePro service is to receive records from health care providers,
place them in a single envelope, and mail them to the insurer.
You pose four questions about the applicability
of the FCRA to TelePro, which we quote verbatim in italics followed
by our reply.
1. Does a copy service, such as TelePro,
meet the definition of a CRA?
Probably not. Section 603(f) of the FCRA
The term "consumer reporting 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, and which uses any means or
facility of interstate commerce for the purpose of preparing or
furnishing consumer reports.
The answer to your question depends on whether
a service such as PMSI/Telepro constitutes "assembling"
the medical records that it furnishes to its clients, because
it clearly meets the other elements of the definition -- it conveys
personal health information for a fee to insurers, who use the
information to evaluate consumers' eligibility for insurance products
offered by its clients. Because PMSI's action as you describe
it is entirely mechanical and does not in any way determine the
content of the material sent to the client, we believe it will
be in the same position as the drug lab consultant we discuss
in the enclosed Letter #1 (Islinger,
6/9/98) and probably not a CRA that is "assembling"
data. If at some point PMSI does more, like the record search
service that extracts information from public sources for its
clients described in the enclosed Letter #2 (LeBlanc,
6/9/98), it will become a CRA.
2-3. In the event TelePro services are
found to be that of a CRA, since PMSI does not maintain the records,
what procedures would we need to follow to comply with FCRA? Would
reordering the medical records be sufficient for disclosure? Could
any associated charges imposed on the medical facility be passed
on to the consumer?
Section 609 of the FCRA requires that CRAs
provide "[a]ll information in the consumer's file at the
time of the request" by the consumer for a disclosure of
his or her personal record maintained by the agency. Even if PMSI/TelePro
becomes a CRA, if it retains no file of documents it transmits
to insurer clients as part of the service (or of information contained
in those documents), it will have no information to disclose.
If PMSI/Telepro becomes a CRA and does maintain any such file,
it must make the disclosure. Section 612 limits CRA charges to
consumers for file disclosures to $8.00 (an amount subject to
increase based on the Consumer Price Index), and sets forth certain
situations when they are required to provide this service for
4. If the current TelePro services are
found not to be that of a CRA, but a later date, PMSI decides
to maintain copies of the medical records procured, would TelePro
services then be subject to FCRA disclosure requirements?
Yes. If PMSI/TelePro retains such information
in its files, it would undoubtedly be a CRA "assembling"
information on consumers. As such, it would have to make file
disclosures as required by Section 609.
The opinions set forth in this informal
staff letter are not binding on the Commission.
Clarke W. Brinckerhoff