Additional Consumer Rights Prompt New FCRA Model Disclosures

The Bureau of Consumer Financial Protection (BCFP) has issued an interim final rule updating two model disclosures under the Fair Credit Reporting Act (FCRA).

Following the Equifax data breach and consumer concerns about the security of information in their credit reports, Congress passed the Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA) requiring nationwide consumer reporting agencies to provide “security freezes” free of charge to consumers. Security freezes allow consumers to lock their credit reports free of charge, making it harder for identity theft to occur. Additionally, consumers who may be victims of identity theft can have reporting agencies place an initial fraud alert in their files for at least one year (an increase from 90 days). A fraud alert informs a prospective lender that a consumer may have been a victim of identity theft and requires that the lender take steps to verify the identity of anyone seeking credit in the consumer’s name.

In response to EGRRCPA the BCFP issued new FCRA model disclosures, updated to inform consumers of their new rights: “Summary of Consumer Rights” and “Summary of Consumer Identity Theft Rights.” Businesses that use the FCRA model disclosures in their operations, such as lenders or employers performing background checks, should review the new disclosures and incorporate the changes, as appropriate, into their processes.