A Business Guide to the Fair Credit Reporting Act

Many businesses use information covered by the Fair Credit Reporting Act (FCRA) in day-to-day decisions. You likely need to comply with the FCRA if you pull credit reports or other financial data to determine someone’s eligibility for financing, housing, employment or something else. To stay compliant, you’ll need to know how the FCRA protects consumer rights and what it means for business operations.

What Is the Fair Credit Reporting Act?

FCRA gives consumers certain rights around the financial information collected and used by various reporting agencies. These agencies include financial institutions and the three major credit bureaus—Experian, TransUnion and Equifax. The law boosts fairness, accuracy and privacy for consumers. It also gives them certain rights, like being able to request free reports periodically.

Under the law, credit reporting agencies can only provide information to a business with a legitimate purpose, like offering a line of credit, housing or a job. These agencies cannot provide credit reports to just anyone who requests one. If a business takes an adverse action based on a credit report, like denying someone credit or employment, they must give the consumer more details in a notice. The notice should include where the information came from and how the consumer can correct it.

FCRA Compliance for Businesses

If you use credit reports or collect customer information in another way, you’ll need to know how to avoid FCRA violations by staying compliant. You might fall under this umbrella if you make decisions based on consumer data. While offering credit is one example of this scenario, verifying account information with a bank before approving a purchase can also require FCRA compliance. Other common situations include renting property or using credit as part of a background check for employment.

Depending on your use case, you may have requirements in the following areas:

• Requesting permission: Typically, you will need to obtain permission before performing a hard inquiry to see a full report. You might use these inquiries to make credit. Soft credit checks—which don’t impact the consumer’s score—might not need prior permission. Employers must get written permission separate from the employment application and certify that they won’t discriminate against the employee or misuse the information.
• Making credit, employment or housing decisions: You must provide a notification of adverse action if you deny someone credit or adversely adjust the terms. The notification can be written, oral or electronic and must contain details like the reporting agency’s contact information and an explanation of the consumer’s right to a free report. Employers and landlords must follow similar processes if they take adverse actions, like rejecting an application, firing an employee or denying a rental application.
• Disposing of information: Whenever you collect report information, following proper disposal policies helps prevent privacy issues.

How CSG Forte Uses Data Under FCRA

As a payment solutions provider, CSG Forte sometimes uses consumer data for verification and authentication purposes. The following statements outline requirements for using that data and providing adverse action notices to customers.

Declined Payments

If a customer receives a decline response from CSG Forte Payments, Inc., the FCRA requires the Merchant—your company—to provide an avenue for them to dispute the declined payment.

Your company must also send customers a written notice to ensure they know they can initiate this process. This notice should contain the following information:

• The address to contact CSG Forte Payments, Inc.
• The submission deadline
• The customer’s rights in the situation

See our FCRA requirements page to ensure you understand the rights and responsibilities of merchants and customers.

Permissible Uses

Permissible use cases for data received through CSG Forte Payments include, but are not limited to, the following:

• Determining whether a customer is making child support payments
• Supplying information for insurance underwriters
• Providing background information on a customer for employers
• Responding to a federal grand jury or court order
• Following the customer’s written instructions to do so

See our service fees page for a full list of permissible uses and additional information on FCRA requirements.

Stay FCRA-Compliant With CSG Forte

Complying with FCRA can be tricky, but we specialize in financial data. Our secure solutions can help ensure proper handling, while our experienced team offers support in various industries, from small businesses and governments to healthcare providers and property managers. Reach out to us today to learn more about maintaining FCRA compliance with CSG Forte.