CFPB issues advisory on credit report privacy restrictions

The Consumer Financial Protection Bureau issued a legal interpretation on the permissible purposes for companies to use and share credit reports and background reports under the Fair Credit Reporting Act.

Details: The CFPB’s advisory opinion says:

• Insufficient matching procedures can result in credit reporting companies providing reports to entities without a permissible purpose, which violates consumers’ privacy rights.

• Providing credit reports of multiple people as “possible matches” is unlawful.

• Disclaimers about insufficient matching procedures do not cure permissible-purpose violations.

• Credit report users must ensure they do not violate a person’s privacy by obtaining a credit report when they lack a permissible purpose.

• Covered entities can face criminal liability for obtaining a background report on an individual under false pretenses or by providing a background report to an unauthorized individual.