Monthly Educational Feature: June 1997.
Most Private Detectives access credit records during the routine course of their business, and, as we all know, there are legal limitations on that access. These limitations are established by the Federal Fair Credit Reporting Act (begins at 15 USC 1681) and the Kansas Fair Credit Act (begins at KSA 50-701). Congress made some changes to the Federal Fair Credit Reporting Act which are mandated to become effective not later than September 30, 1997; the standards may be adopted voluntarily by a consumer reporting agency prior to that date. This means that most credit reporting agencies either have or shortly will make this change. A review of the changes has been made and those most important for private detectives are summarized here. It is important to remember that under FTC rulings, a private detective agency meets the definition of a consumer reporting agency and also meets the definition of a user. Almost all work done by private detectives would qualify as an investigative consumer report which is more extensive than a simple consumer report.

[Summary prepared by KAPI Secretary who is not an attorney]

Permissible uses of consumer reports. When it may be provided:

• Court order or subpoena
• On the consumer's instructions
• Credit or financial transactions
• Employment purposes
• Insurance underwriting
• Governmental licensing of consumer if financial responsibility is a requirement

Reporting of obsolete information prohibited. Information is obsolete after:

• Bankruptcy 10 years
• Tax liens 7 years
• Arrests/Convictions 7 years
• Suits and Judgments 7 years
• Collections 7 years
• Other adverse 7 years
  

  Disclosure of investigative consumer reports.

  
  
  • Consumer must be notified that an investigative report will be prepared.
  • The consumer reporting agency must certify that the disclosure has been made to the consumer.
  • Public record arrest or conviction information must be verified within 30 days prior to the date of report before it can be included in the consumer report.
  • Personal adverse information must be verified - personal interview of source is recommended.
  
  

  Compliance procedures. Consumer reporting agencies must:
  

  • Use reasonable procedures to accurately identify the users of information and that use is appropriate.
  • Follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.
  • Notify users of their responsibilities and the limitations on use of the information.
  • Place restrictions on resellers of information.
  • Not prohibit the user from disclosing the consumer report to the consumer.
  
  

  Disclosures to governmental agencies. A consumer reporting agency may furnish identifying information respecting any consumer, limited to his name, address, former addresses, places of employment, or former places of employment, to a governmental agency.
  

  Disclosures to consumers. Must disclose on request by properly identified consumer.
  

  Public record information for employment purposes. A consumer reporting agency which furnishes a consumer report for employment purposes which contains adverse information from public records must:
  

  • Verify its accuracy
  • Notify the consumer of the consumer report.
  
  

  Restrictions on investigative consumer reports. Adverse information in an investigative report must be verified prior to reporting.
  

  Requirements on users of consumer reports. Users must notify the consumer of any adverse information and provide information on rights.
  

  Civil liability for willful noncompliance. The consumer reporting agency continues to have civil liability for willful noncompliance.
  

  Civil liability for negligent noncompliance. The consumer reporting agency continues to have civil liability for negligent noncompliance.
  

  Obtaining information under false pretenses. Deception to obtain a report continues to be a criminal offense with provision for felony level prosecution in some instances.
  

  Unauthorized disclosures by officers or employees. Continue to be prosecutable.
  

  Administrative enforcement. Continues to be with the Federal Trade Commission.
  

  Information on overdue child support obligations. Now contains clear provisions to allow release of information for child support.
  

  Counterintelligence use. Contains provisions for FBI access for national security.
  

  The changes do not affect the Debt Collection provisions in 15 USC 1692; they remain the same. An up-dated version of the permissible uses text is available from the KAPI Secretary and the entire act is available at any federal repository.