Fair Credit Reporting Act (FCRA) Flashcards

(31 cards)

1
Q

Fair Credit Reporting Act Purpose?

A

Ensure accuracy, fairness, and privacy of consumer personal information handled by consumer reporting agencies (CRAs).

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2
Q

FCRA Enacted by Congress in ?

A

1970

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3
Q

Regulatory Agencies:

  • Primary: Consumer Financial Protection Bureau (CFPB)
  • Secondary: _________ __________ ______________ (FTC)
A

Federal Trade Commission

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4
Q

Known as Regulation V ?

A

True

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5
Q

Covered Transactions

  • Use of credit reports,
  • consumer investigatory reports,
  • employment background checks ?

T/F

A

True

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6
Q

Consumer Report

A

Information from a CRA relating to a consumer’s credit worthiness, credit standing, credit capacity, character, personal characteristics, or mode of living

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7
Q

Consumer Reporting Agency (CRA)

A

Person/entity assembling or evaluating consumer credit information to provide reports to third parties.

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8
Q

Prohibited Practices

  • Furnishing reports for non-permissible purposes.
  • Providing inaccurate information knowingly.
  • Including outdated negative financial information in reports.
  • Releasing disputed information without indicating the dispute.
A

True

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8
Q

Creditor

A

Person regularly extending, renewing, or continuing credit.

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9
Q

Penalties for Violations

  • Civil Liability:
    • Willful noncompliance: Actual damages or $100-$________ plus punitive damages, costs, attorney’s fees.
    • False pretenses: Actual damages or $1,000.
    • Negligent noncompliance: Actual damages, costs, attorney’s fees.
  • Criminal Penalties:
    • False pretenses: Fines and/or imprisonment up to ____ years.
    • Unauthorized disclosures by CRA employees: Fines and/or imprisonment up to 2 years.
A

$1,000
2 years

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10
Q

What is the primary purpose of the Fair Credit Reporting Act (FCRA)?
- a) To regulate the interest rates on loans
- b) To ensure the accuracy, fairness, and privacy of consumers’ personal information
- c) To provide grants for consumer education
- d) To reduce the number of credit reports requested by lenders

A

To ensure the accuracy, fairness, and privacy of consumers’ personal information

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11
Q

Which regulatory agency has general authority to enforce compliance with the FCRA?
- a) Federal Trade Commission (FTC)
- b) Federal Reserve
- c) Consumer Financial Protection Bureau (CFPB)
- d) Office of the Comptroller of the Currency (OCC)

A

The CFPB has general authority to enforce compliance with the FCRA, although the FTC retains some rulemaking and enforcement authority.

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12
Q

What type of information is included in a consumer report according to the FCRA?
- a) Only financial account balances
- b) Information about a consumer’s character, personal characteristics, and mode of living
- c) Medical history and diagnoses
- d) Personal emails and text messages

A

b. Information about a consumer’s character, personal characteristics, and mode of living

A consumer report includes information about a consumer’s creditworthiness, character, and personal characteristics.

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13
Q

Which of the following is NOT considered a permissible purpose for obtaining a consumer report under the FCRA?
- a) Consumer’s request for their own credit report
- b) Employment background check with the consumer’s consent
- c) Personal curiosity without the consumer’s knowledge
- d) Underwriting of life insurance

A

c) Personal curiosity without the consumer’s knowledge

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14
Q

What is a “fraud alert” in the context of the FCRA?
- a) An alert indicating a consumer’s bankruptcy
- b) A statement in a consumer’s file indicating they may be a victim of fraud or identity theft
- c) A notice to lenders about a consumer’s credit limit
- d) An alert about a consumer’s recent loan application

A

A statement in a consumer’s file indicating they may be a victim of fraud or identity theft

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14
Q

How long can a bankruptcy case be reported on a consumer report?
- a) 5 years
- b) 7 years
- c) 10 years
- d) Indefinitely

A

10 years - Bankruptcy cases can be reported for up to 10 years on a consumer report.

15
Q

What must a furnisher do if a consumer disputes the accuracy of information provided to a CRA?
- a) Ignore the dispute if it seems frivolous
- b) Report the dispute to the CRA and investigate
- c) Remove the disputed information immediately
- d) Wait for the CRA to resolve the issue

A

b) Report the dispute to the CRA and investigate

16
Q

Under the FCRA, what is the penalty for willful noncompliance?
- a) Actual damages, punitive damages, costs, and attorney’s fees
- b) A warning letter from the CFPB
- c) Mandatory credit counseling for the violator
- d) Loss of the violator’s credit rating

A

a. Actual damages, punitive damages, costs, and attorney’s fees

17
Q

What type of adverse action requires notification to the consumer?
- a) Denial of credit or an extension of credit in a substantially smaller amount than requested
- b) Approval of credit with favorable terms
- c) Consumer’s request to close an account
- d) None, adverse actions do not require notifications

A

a) Denial of credit or an extension of credit in a substantially smaller amount than requested

18
Q

What are the five categories of information that make up the FICO credit score?
- a) Payment history, amounts owed, length of credit history, types of credit used, new credit
- b) Payment history, medical history, personal relationships, new credit, employment history
- c) Length of credit history, marital status, new credit, types of credit used, amounts owed
- d) Payment history, loan types, credit limits, spending habits, social security number

A

a) Payment history, amounts owed, length of credit history, types of credit used, new credit

19
Q

What type of report contains information on a consumer’s character, reputation, and lifestyle obtained through interviews?
- a) Consumer Report
- b) Investigative Consumer Report
- c) Credit Report
- d) Employment Report

A

b) Investigative Consumer Report

20
Q

Which information is excluded from a consumer report after 7 years unless the statute of limitations has not expired?
- a) Bankruptcies
- b) Civil lawsuits, arrest records, and accounts placed for collection
- c) Positive credit history
- d) Recent inquiries

A

b) Civil lawsuits, arrest records, and accounts placed for collection

These types of information are excluded from a consumer report after 7 years unless the statute of limitations has not expired.

21
Q

Which entity is primarily responsible for enforcing the FCRA for large depository institutions?
- a) Federal Trade Commission (FTC)
- b) Consumer Financial Protection Bureau (CFPB)
- c) Office of the Comptroller of the Currency (OCC)
- d) Federal Deposit Insurance Corporation (FDIC)

A

b) Consumer Financial Protection Bureau (CFPB)

22
Q

Which information is NOT included in a consumer report under the FCRA?
- a) Credit inquiries
- b) Bankruptcy cases older than 10 years
- c) Address discrepancies
- d) Payment history

A

b) Bankruptcy cases older than 10 years

23
What is the consequence for a CRA employee releasing information without authorization? - a) A warning letter - b) Fines and/or imprisonment up to 2 years - c) Suspension without pay - d) Reassignment to another department
b) Fines and/or imprisonment up to 2 years
23
What must a CRA do if they receive a notice of address discrepancy? - a) Ignore the notice - b) Notify the requester if the address differs from the one on file - c) Correct the address immediately - d) Contact the consumer for verification
b) Notify the requester if the address differs from the one on file
24
What is the penalty for furnishing a consumer report for a non-permissible purpose? - a) There is no penalty - b) Civil liability for actual damages, costs, and attorney’s fees - c) Credit score reduction - d) Temporary suspension of business activities
b) Civil liability for actual damages, costs, and attorney’s fees
25
What type of information can a CRA include in a consumer report for credit transactions over $150,000? - a) Bankruptcies older than 10 years - b) Positive credit history only - c) Personal emails and text messages - d) Social media activity
a) Bankruptcies older than 10 years
26
What should a consumer do if they believe there is inaccurate information on their credit report? - a) Ignore the error - b) Report the dispute to the CRA - c) Contact their bank immediately - d) File a lawsuit against the creditor
19. Answer: b) Report the dispute to the CRA - Explanation: If a consumer believes there is inaccurate information on their credit report, they should report the dispute to the CRA, which is then required to investigate.
27
What type of report includes information obtained through personal interviews? - a) Consumer Report - b) Investigative Consumer Report - c) Credit Report - d) Employment Report
20. Answer: b) Investigative Consumer Report - Explanation: An investigative consumer report includes information obtained through personal interviews, providing insights into a consumer’s character, reputation, and lifestyle.
28