UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580
Division of Financial Practices
October 27, 1998
The Reverend John C. Tabler
30 Bannington Drive
Upper Marlboro, Maryland 20774
- Re: Section 603(d)(1)(A) of the Fair Credit
Dear Reverend Tabler:
This letter responds to your letter of June 15, 1998 asking for
the staff's opinion as to whether Section 603(d)(1)(A) of the
Fair Credit Reporting Act ("FCRA") prohibits a credit
grantor from providing a consumer reporting agency ("CRA")
with information regarding an individual's performance on a corporate
credit card account.
Your letter suggests that under Section 603(d)(1) a credit grantor
could not report any information regarding a consumer's performance
on a corporate card. We disagree. Section 603(d) defines a "consumer
report"; it imposes no restrictions on the information that
a credit grantor may report and a CRA may collect. We do not believe
that Section 603(d) is relevant to the issue you raise.
The FCRA, however, does contain specific restrictions upon the
information that may be included in an individual's consumer report.
In particular, the FCRA imposes obligations on both CRAs and credit
grantors concerning the accuracy and completeness of information
in an individual's consumer report. Whether or not a CRA may,
as part of a consumer report, include information about an individual's
payment history on a corporate credit card depends upon the individual's
legal obligations under the card agreement or general responsibility
for payment of incurred charges.
Although certain corporate credit accounts may not impose any
obligations on an employee, it is also possible that an employee
may have some personal liability for the use of a corporate credit
account or may be responsible for payment prior to being reimbursed
by the employer. In these instances, an employee's performance
on the corporate credit card could relate to credit worthiness
and could be a factor in an eligibility determination. As such,
the information could be included in a consumer report. On the
other hand, if an individual has no legal obligation or responsibility
for ensuring payment, it would arguably be inaccurate for a CRA
or a credit grantor to report a delinquency on the card as an
obligation of the consumer.
Without knowing the underlying facts of your situation, it is
not possible to evaluate the applicability of the FCRA to your
situation. However, as a general matter, under Section 611, CRAs
must investigate consumer disputes regarding inaccurate or incomplete
information in the CRA's file on the consumer, and must also report
the dispute to the entity that furnished the disputed information
to the CRA. Upon receiving notice, under Section 623(b), a furnisher,
such as the issuer of the corporate credit card in your situation,
is required to investigate the dispute and report its findings
to the CRA. When it has completed its reinvestigation, Section
611 requires the CRA to notify the consumer of the results of
the reinvestigation. Your letter implies that, in this instance,
you notified the CRAs of your dispute, who in turn notified the
corporate card issuer. It is unclear from your letter to what
extent the CRA and the card issuer investigated your dispute,
what information you supplied to them, and what action was ultimately
taken and why.
If your dispute was investigated and the information was found
to reflect accurately a personal obligation (under the reasoning
stated above), the inclusion of this information in your credit
file would be proper. However, if any of these entities failed
to comply with their obligations under Section 611 and Section
623, they could be liable under Section 616 and Section 617 of
the FCRA. Enclosed is a copy of our "Fair Credit Reporting"
brochure that explains more generally the rights provided to consumers
by the FCRA.
The views set forth in this informal opinion letter are those
of the staff, and are not binding on the Commission.
Jonathan A. Smollen