On January 11, 2024, the CFPB issued guidance to consumer reporting companies to address inaccurate background check reports, as well as sloppy credit file sharing practices. In particular, the Bureau issued two advisory opinions with the aim to ensure that the consumer reporting system produces accurate and reliable information and does not keep people from accessing their personal data.
The first advisory opinion titled Fair Credit Reporting; Background Screening highlights that background reports must be complete, accurate, and free of information that is duplicative, outdated, expunged, sealed, or otherwise legally restricted from public access. The CFPB said that consumer reporting companies, covered by the Fair Credit Reporting Act, must maintain reasonable procedures to avoid producing reports with false or misleading information. These procedures should:
Prevent the reporting of public record information that has been expunged, sealed, or otherwise legally restricted from public access;
Ensure disposition information is reported for any arrests, criminal charges, eviction proceedings, or other court filings that are included in background check reports; and
Prevent the reporting of duplicative information.
The guidance also reminds consumer reporting companies that they may not report outdated negative information and that each negative item of information is subject to its own reporting period, the timing of which depends on the date of the negative item itself.
The second advisory opinion, Fair Credit Reporting; File Disclosure, highlights that people are entitled to receive all information contained in their consumer file at the time they request it, along with the source or sources of the information contained within, including both the original and any intermediary or vendor source. The advisory opinion explains that individuals requesting their files:
Only need to make a request for their report and provide proper identification – they do not need to use specific language or industry jargon to be provided their complete file;
Must be provided their complete file with clear and accurate information that is presented in a way an average person could understand;
Must be provided the information in a format that will assist them in identifying inaccuracies, exercising their rights to dispute any incomplete or inaccurate information, and understanding when they are being impacted by adverse information; and
Must be provided with the sources of the information in their file, including both the original and any intermediary or vendor source or sources.
The CFPB’s announcement can be found here.
The Read the advisory opinion, Fair Credit Reporting; Background Screening here.
Read the advisory opinion Fair Credit Reporting; File Disclosure here.