Compliance
In 1970, the Fair Credit Reporting Act (FCRA) was enacted. This legislation was created to begin regulating Credit Reporting Agencies (CRA's) that use personal information to create consumer reports. The FCRA requires CRA's and those persons receiving consumer information to protect the confidentiality, accuracy and relevance of consumer information. The FCRA is the foundation of regulation which governs the credit reporting industry. These regulations are enforced by the Federal Trade Commission (FTC). For more information on the FCRA and the FTC, please go to their website: http://www.ftc.gov/.
A major function of the FCRA is to prevent the misuse of consumer data. The protection of consumer data has become an important issue as identity theft and fraud continues to increase. As a result, compliance with the FCRA has never been a higher priority among CRA's and users of consumer information than it is currently.
Airfactz, as a CRA, realizes the importance of compliance with this legislation and has instituted the necessary business practices to ensure that consumer information is protected and that full compliance is met. When you use the services offered by Airfactz to receive a consumer report on a potential renter or employee, you must also comply with the requirements under the FCRA.
This is why we have instituted this program and require the documents that we do to help guide you through the FCRA maze. For an in-depth description of your requirements as a user of consumer reports under FCRA, please refer to the Notice to Users of Consumer Reports. For a brief overview, please see below.
Requirements to Receive Information
According to the law, a client must show they have a "permissible purpose" to receive a credit report and must establish and demonstrate secure business practices. In order to meet the requirements under FCRA and the requirements from the credit bureaus, Airfactz must keep on file some necessary documentation for every client. For the documentation required to create an account with Airfactz, please refer to the Membership Checklist. While the requirements on the Membership Checklist may seem extreme or excessive, the purpose of each document is to ensure that only those persons who have a legitimate need receive information about consumers and that consumer information is kept safe.
The last item on the Membership Checklist is an on-site inspection of your office. The inspection is a requirement from each of the credit bureaus and is only applicable if a credit report is included in the background report you order. The credit bureaus have instituted this requirement in order to protect the security of the data they provide. The inspection must be completed through an approved third party vendor and the cost is $75. It is required annually for those operating out of a home office. For the security features you must have in place to pass the inspection, please refer to the Requirements for the On-Site Inspection. The on-site inspection can be waived when receiving a Decision Only Product from Airfactz (this option is not available with Equifax products).
Another requirement for compliance with the FCRA is to notify a consumer when adverse action is taken. The FCRA defines adverse action as any action that is unfavorable to the interest of a consumer. For tenant screening this would include denying residency, requiring a larger deposit than might be required for another applicant, requiring the consumer to pay first and last month's rent up front, etc. For employment screening this would be denying employment. The requirements for providing the adverse action notice differ depending on your permissible purpose, whether for employment screening or tenant screening.
For employment purposes, a pre-adverse action notice must be given to the consumer before adverse action is taken. The pre-adverse action notice must include a copy of the report and a Summary of Consumer Rights. The consumer then has an opportunity to respond to any incorrect information on the report before a final decision is made. After three days, a final adverse action notice may be given to the consumer if nothing in the report is disputed. A sample of a pre-adverse action notice and a final adverse action notice can be found at the bottom of the results page in any report processed on our secure website. If you are not set up with online access, please contact Airfactz directly and we would be happy to supply you with a sample notice.
For tenant purposes, an adverse action notice must be given at the time that the adverse action is taken. The information required to be included in the adverse action notice is included in the Notice to Users of Consumer Reports. A sample adverse action notice can be found at the bottom of the results page in any report processed on our secure website. If you are not set up with online access, please contact Airfactz directly and we would be happy to supply you with a sample notice.
Red Flag Rules and Address Discrepancy
Beginning May 1, 2009, users of consumer reports will be required to comply with the Red Flag Rules. The Red Flag Rules require that you have a procedure in place to verify the identity of a consumer. The Red Flag Rules also require that you have a written policy in place to deal with any red flags or signs that indicate the consumer might be a victim of fraud or identity theft. One red flag that requires particular attention is an address discrepancy. This occurs when the address reported by the consumer at the time of application does not match the address on file at the credit bureau. On reports generated by Airfactz, an address discrepancy will be noted for you in the Report Summary. You must have a policy in place to verify that the address stated by the consumer is, in fact, the correct address when an address discrepancy is reported. The correct address must then be reported to the credit bureau.
You may write your own policy; however, Airfactz has a Red Flag Policy in place that is available to all our members. A link to this policy can be found on Version 2.0 of our secure website on the News and Announcement page. If you are a member but do not have a log in to our secure website, please contact Airfactz directly for a copy of our policy.
