Free Online Credit Report: Credit Bureaus Are Trying To Resist New FTC Law |
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The tussle between the credit bureaus and consumers about online credit report is escalating. The consumers are demanding that the amendment to the Fair Credit Reporting Act passed last November, allowing every consumer in the nation to get a free copy of his or her online credit report once a year, be implemented straightaway and the credit bureaus are pleading with the Federal Trade Commission for delays in the free online credit report requirement. Nearly 3000 consumers have written to the commission saying, "We want free copies now. That's what the law says." Actually, the FTC, which enforces the credit-reporting act, can consider "the significant demands that may be placed on consumer reporting agencies in providing such [disclosures]" and "appropriate means to ensure that consumer reporting agencies can meet those demands including the efficacy of a system of staggering the availability to consumers of such [disclosures]." The Fair and Accurate Credit Transactions (FACT) Act of 2003 allows the FTC to issue a proposed rule Mar. 16 making consumers eligible for free online credit reports on a gradual basis. The schedule for consumers becoming eligible is: Western states like Arizona, California and some other western states will become eligible on Dec. 1; Midwestern states will become eligible Mar. 1, 2005; Southern states will become eligible from June 1, 2005; and Eastern states like Puerto Rico, and all U.S. territories become eligible Sept. 1, 2005. An FTC spokesman said, "The transition is intended to protect the nationwide credit bureaus from receiving a volume of free online credit report requests beyond their capacity to process, and to ensure that consumers can get timely online credit report for other purposes." As a result of the new FACT law, the FTC's proposed rule requires that a centralized source for free online credit report from the three nationwide bureaus be available to consumers through a Web site, a toll-free number, and a postal address. The Consumer Data Industry Association wants that this process should be delayed and that it should spill over into 2006. It is unable to assess the volume of requests and it does not want to waste money on a larger-than-required system or get battered for building a system that is inadequate. The credit bureaus are trying to get immunity from lawsuits that may arise out of this situation. As the credit bureaus have already been providing free online credit report to many consumers if they live in seven states including the populous states of California, Georgia, and New Jersey - or if the individual is unemployed or indigent or victimized by ID theft. Based on these figures, a Congressional office estimated that requests, now that there is no charge, would total 231% of the current level. The volume of requests for free online credit report is inevitably excessive after news articles about credit reporting or about ID theft or hacking or credit inaccuracy. The FTC proposes that during such periods, the credit bureaus should be relieved of providing prompt free disclosures as consumers want prompt access at such a time. A joint statement coordinated by the Consumer Federation of America and US Public Interest Research Group told the FTC that there is no need for a staggered nationwide roll-out, but if it is done, it should be done more rapidly, with the burden on the credit bureaus to prove the potential need for additional staggering following a one-region test. Keeping in view the potential, yet heretofore unsubstantiated, unrealized and unproven concerns of the nationwide consumer reporting agencies, the FTC could still achieve the primary intent of providing as many American consumers as possible rapid access to free online credit report. The FTC has also been alerted about the apparent plans by credit bureaus to take the information provided by consumers to prove their identity, to get their own online credit report, and use it to sell additional services or even to rent it to other companies. They want that Spanish-speaking consumers should also be serviced and that the exemption for extraordinary request volume be triggered at a very low threshold. A consumer-oriented advisory board was also proposed. |
