15 USC 1681m - Requirements on users of consumer reports

U.S Code last checked for updates: May 22, 2026

§ 1681m.

Requirements on users of consumer reports

(a)

Duties of users taking adverse actions on basis of information contained in consumer reports

If any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, the person shall—

(1)

provide oral, written, or electronic notice of the adverse action to the consumer;

(2)

provide to the consumer written or electronic disclosure—

(A)

of a numerical credit score as defined in section 1681g(f)(2)(A) of this title used by such person in taking any adverse action based in whole or in part on any information in a consumer report; and

(B)

of the information set forth in subparagraphs (B) through (E) of section 1681g(f)(1) of this title;

(3)

provide to the consumer orally, in writing, or electronically—

(A)

the name, address, and telephone number of the consumer reporting agency (including a toll-free telephone number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis) that furnished the report to the person; and

(B)

a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken; and

(4)

provide to the consumer an oral, written, or electronic notice of the consumer’s right—

(A)

to obtain, under section 1681j of this title, a free copy of a consumer report on the consumer from the consumer reporting agency referred to in paragraph (3), which notice shall include an indication of the 60-day period under that section for obtaining such a copy; and

(B)

to dispute, under section 1681i of this title, with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.

(b)

Adverse action based on information obtained from third parties other than consumer reporting agencies

(1)

In general

(2)

Duties of person taking certain actions based on information provided by affiliate

(A)

Duties, generally

If a person takes an action described in subparagraph (B) with respect to a consumer, based in whole or in part on information described in subparagraph (C), the person shall—

(i)

notify the consumer of the action, including a statement that the consumer may obtain the information in accordance with clause (ii); and

(ii)

upon a written request from the consumer received within 60 days after transmittal of the notice required by clause (i), disclose to the consumer the nature of the information upon which the action is based by not later than 30 days after receipt of the request.

(B)

Action described

(C)

Information described

Information referred to in subparagraph (A)—

(i)

except as provided in clause (ii), is information that—

(I)

is furnished to the person taking the action by a person related by common ownership or affiliated by common corporate control to the person taking the action; and

(II)

bears on the credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living of the consumer; and

(ii)

does not include—

(I)

information solely as to transactions or experiences between the consumer and the person furnishing the information; or

(II)

information in a consumer report.

(c)

Reasonable procedures to assure compliance

(d)

Duties of users making written credit or insurance solicitations on basis of information contained in consumer files

(1)

In general

Any person who uses a consumer report on any consumer in connection with any credit or insurance transaction that is not initiated by the consumer, that is provided to that person under section 1681b(c)(1)(B) of this title, shall provide with each written solicitation made to the consumer regarding the transaction a clear and conspicuous statement that—

(A)

information contained in the consumer’s consumer report was used in connection with the transaction;

(B)

the consumer received the offer of credit or insurance because the consumer satisfied the criteria for credit worthiness or insurability under which the consumer was selected for the offer;

(C)

if applicable, the credit or insurance may not be extended if, after the consumer responds to the offer, the consumer does not meet the criteria used to select the consumer for the offer or any applicable criteria bearing on credit worthiness or insurability or does not furnish any required collateral;

(D)

the consumer has a right to prohibit information contained in the consumer’s file with any consumer reporting agency from being used in connection with any credit or insurance transaction that is not initiated by the consumer; and

(E)

the consumer may exercise the right referred to in subparagraph (D) by notifying a notification system established under section 1681b(e) of this title.

(2)

Disclosure of address and telephone number; format

A statement under paragraph (1) shall—

(A)

include the address and toll-free telephone number of the appropriate notification system established under section 1681b(e) of this title; and

(B)

be presented in such format and in such type size and manner as to be simple and easy to understand, as established by the Bureau, by rule, in consultation with the Federal Trade Commission, the Federal banking agencies, and the National Credit Union Administration.

(3)

Maintaining criteria on file

(4)

Authority of Federal agencies regarding unfair or deceptive acts or practices not affected

(e)

Red flag guidelines and regulations required

(1)

Guidelines

The Federal banking agencies, the National Credit Union Administration, the Federal Trade Commission, the Commodity Futures Trading Commission, and the Securities and Exchange Commission shall jointly, with respect to the entities that are subject to their respective enforcement authority under section 1681s of this title—

(A)

establish and maintain guidelines for use by each financial institution and each creditor regarding identity theft with respect to account holders at, or customers of, such entities, and update such guidelines as often as necessary;

(B)

prescribe regulations requiring each financial institution and each creditor to establish reasonable policies and procedures for implementing the guidelines established pursuant to subparagraph (A), to identify possible risks to account holders or customers or to the safety and soundness of the institution or customers; and

(C)

prescribe regulations applicable to card issuers to ensure that, if a card issuer receives notification of a change of address for an existing account, and within a short period of time (during at least the first 30 days after such notification is received) receives a request for an additional or replacement card for the same account, the card issuer may not issue the additional or replacement card, unless the card issuer, in accordance with reasonable policies and procedures—

(i)

notifies the cardholder of the request at the former address of the cardholder and provides to the cardholder a means of promptly reporting incorrect address changes;

(ii)

notifies the cardholder of the request by such other means of communication as the cardholder and the card issuer previously agreed to; or

(iii)

uses other means of assessing the validity of the change of address, in accordance with reasonable policies and procedures established by the card issuer in accordance with the regulations prescribed under subparagraph (B).

(2)

Criteria

(A)

In general

(B)

Inactive accounts

(3)

Consistency with verification requirements

(4)

Definitions

As used in this subsection, the term “creditor”—

(A)

means a creditor, as defined in section 1691a of this title, that regularly and in the ordinary course of business—

(i)

obtains or uses consumer reports, directly or indirectly, in connection with a credit transaction;

(ii)

furnishes information to consumer reporting agencies, as described in section 1681s–2 of this title, in connection with a credit transaction; or

(iii)

advances funds to or on behalf of a person, based on an obligation of the person to repay the funds or repayable from specific property pledged by or on behalf of the person;

(B)

does not include a creditor described in subparagraph (A)(iii) that advances funds on behalf of a person for expenses incidental to a service provided by the creditor to that person; and

(C)

includes any other type of creditor, as defined in that section 1691a of this title, as the agency described in paragraph (1) having authority over that creditor may determine appropriate by rule promulgated by that agency, based on a determination that such creditor offers or maintains accounts that are subject to a reasonably foreseeable risk of identity theft.

(f)

Prohibition on sale or transfer of debt caused by identity theft

(1)

In general

(2)

Applicability

(3)

Rule of construction

Nothing in this subsection shall be construed to prohibit—

(A)

the repurchase of a debt in any case in which the assignee of the debt requires such repurchase because the debt has resulted from identity theft;

(B)

the securitization of a debt or the pledging of a portfolio of debt as collateral in connection with a borrowing; or

(C)

the transfer of debt as a result of a merger, acquisition, purchase and assumption transaction, or transfer of substantially all of the assets of an entity.

(g)

Debt collector communications concerning identity theft

If a person acting as a debt collector (as that term is defined in subchapter V) on behalf of a third party that is a creditor or other user of a consumer report is notified that any information relating to a debt that the person is attempting to collect may be fraudulent or may be the result of identity theft, that person shall—

(1)

notify the third party that the information may be fraudulent or may be the result of identity theft; and

(2)

upon request of the consumer to whom the debt purportedly relates, provide to the consumer all information to which the consumer would otherwise be entitled if the consumer were not a victim of identity theft, but wished to dispute the debt under provisions of law applicable to that person.

(h)

Duties of users in certain credit transactions

(1)

In general

(2)

Timing

(3)

Exceptions

No notice shall be required from a person under this subsection if—

(A)

the consumer applied for specific material terms and was granted those terms, unless those terms were initially specified by the person after the transaction was initiated by the consumer and after the person obtained a consumer report; or

(B)

the person has provided or will provide a notice to the consumer under subsection (a) in connection with the transaction.

(4)

Other notice not sufficient

(5)

Content and delivery of notice

A notice under this subsection shall, at a minimum—

(A)

include a statement informing the consumer that the terms offered to the consumer are set based on information from a consumer report;

(B)

identify the consumer reporting agency furnishing the report;

(C)

include a statement informing the consumer that the consumer may obtain a copy of a consumer report from that consumer reporting agency without charge;

(D)

include the contact information specified by that consumer reporting agency for obtaining such consumer reports (including a toll-free telephone number established by the agency in the case of a consumer reporting agency described in section 1681a(p) of this title); and

(E)

include a statement informing the consumer of—

(i)

a numerical credit score as defined in section 1681g(f)(2)(A) of this title, used by such person in making the credit decision described in paragraph (1) based in whole or in part on any information in a consumer report; and

(ii)

the information set forth in subparagraphs (B) through (E) of section 1681g(f)(1) of this title.

(6)

Rulemaking

(A)

Rules required

(B)

Content

Rules required by subparagraph (A) shall address, but are not limited to—

(i)

the form, content, time, and manner of delivery of any notice under this subsection;

(ii)

clarification of the meaning of terms used in this subsection, including what credit terms are material, and when credit terms are materially less favorable;

(iii)

exceptions to the notice requirement under this subsection for classes of persons or transactions regarding which the agencies determine that notice would not significantly benefit consumers;

(iv)

a model notice that may be used to comply with this subsection; and

(v)

the timing of the notice required under paragraph (1), including the circumstances under which the notice must be provided after the terms offered to the consumer were set based on information from a consumer report.

(7)

Compliance

(8)

Enforcement

(A)

No civil actions

(B)

Administrative enforcement

(

cite as: 15 USC 1681m