STATES OF AMERICA
FEDERAL TRADE COMMISSION
June 27, 1997
Eric J. Weisberg, Esq.
SZOLD & BRANDWEN
14 Wall Street
New York, NY 10005
Dear Mr. Weisberg:
This responds to your letter dated April 17, 1997, concerning
the obligations of employers to consumers (who may be either applicants
or current employees) against whom they take adverse action based
in whole or in part on a consumer report, under amendments to
the Fair Credit Reporting Act (FCRA) that become effective September
30, 1997. Specifically, you ask if an employer's compliance with
Section 604 before taking adverse action makes it unnecessary
to provide some or all of the disclosures required by Section
615 after the action is taken.
Section 604(b)(3) applies specifically to employers. It requires
them to provide to the consumer, before taking any adverse action
based on a consumer report, a copy of (1) the report and (2) a
summary of consumer rights under the FCRA.(1)
Section 615(a) applies more generally to any party who takes adverse
action that is based, in whole or in part, on a consumer report.
The report user must notify the consumer of the fact that adverse
action has been taken based on a consumer report, including in
that disclosure (1) the name, address, and phone number of the
consumer reporting agency (CRA) that furnished the report, (2)
a statement that the CRA did not decide to take the adverse action
and is unable to provide the consumer with specific reasons for
the action, and (3) a notice of a consumer's rights to obtain
a free copy of his or her report from the CRA within 60 days under
Section 612 and to dispute the accuracy or completeness of any
information in a consumer report under Section 611.
You note that the Section 615(a) notice appears redundant in
the context of employment in two ways: (1) the employer will have
already provided an applicant (or employee) with an actual copy
of his or her report pursuant to Section 604(b)(3), making unnecessary
the notice of the consumer's Section 612 right to get a free report
within 60 days, and (2) the consumer will have already received
a statement of his or her FCRA rights, duplicating the notice
of the consumer's Section 611 right to dispute inaccurate or incomplete
information in the file. You ask whether an employer who has already
complied with Section 604(b)(3) may comply with Section 615(a)
simply by telling the consumer that adverse action has been taken
based on the report already provided.
In our view, any employer who uses consumer reports in making
employment decisions must comply with both Section 604(b) and
Section 615(a). Although there is some duplication of disclosures
required by those two subsections of the amended FCRA in the employment
context,(2) we do not believe the
latter disclosures can be omitted, given the clear and specific
language of the statute. Furthermore, it seems to us that the
duplication may be (at least in part) intended by the drafters,
and that employers will be able to comply with both provisions.
Section 615(a)(3)(B) singles out the consumer's right to dispute
inaccurate or incomplete information with the CRA, under Section
611, as part of the disclosure. The dispute rights are among the
most important the FCRA gives consumers; thus, the Section 615(a)
notice highlights these rights, even though they will have already
been included in a general summary of consumer rights that the
consumer received pursuant to Section 604(b). Similarly, Section
615(a)(3)(A) focuses on the consumer's right to a free report
for 60 days under Section 612. The fact that a rejected employment
applicant receives one copy before the adverse action when the
employer complies with Section 604(b) does not negate his or her
right to another free disclosure for a full two-month period --
a significant benefit because credit files routinely change over
In order to prevent confusion on the part of consumers, an employer
may provide the information required by Section 615(a) in a way
that minimizes duplication with its compliance with Section 604(b).
For example, when an employer provides the Section 615(a) notice
-- including the required statements that the consumer has the
right to obtain a free copy of the consumer report under Section
612, and to dispute the accuracy or completeness of the report
under Section 611(4) -- it may also note that the consumer
has already received (before adverse action was taken) a copy
of his or her report and a summary of consumer rights under the
FCRA. Similarly, when the employer makes the required disclosure
of the name, address, and phone number of the CRA,(5)
it may take note of the fact that some or all of this information
is contained in the report already provided.
In sum, it is the FTC staff's view that employers must comply
in full with both Section 604(b) and 615(a). To the extent any
duplication may confuse consumers, it can be minimized by the
type of cross-reference suggested above.
The final issue raised by your letter concerns the period of
time that an employer must wait after supplying the materials
required by Section 604(b), before taking adverse action, an issue
on which the section is silent. You suggest a period of five business
days from the date of the notice. Although the facts of any particular
employment situation may require a different time, the five day
period that you proposed appears reasonable.
The opinions set forth in this informal opinion letter are those
of the staff, and are not binding on the Commission.
Clarke W. Brinckerhoff
1. Section 609(a)(3) mandates the Federal Trade Commission to prescribe
the form and content of the summary. On February 28, 1997, the
Commission published a proposed version of "A Summary of
Your Rights Under the Fair Credit Reporting Act" (62 Fed.
Reg. 9123, 9128-29). The staff expects that a final version will
be published within a few days.
2. Some of the Section 615(a) disclosures -- most importantly the
statement required by Section 615(a)(2)(B) that the CRA is not
able to provide the specific reasons for the adverse action because
it did not make the decision to take the action -- are not in
any way duplicated by an employer who has provided the report
and summary required by Section 604(b).
3. Also, the complete file disclosure provided to the consumer pursuant
to Section 609 may have more information, or be in a more readable
format, than the report upon which the employer relied.
4. Section 615(a)(3)
5. Section 615(a)(2)(A)