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PRESS RELEASE
The Integrity News
Vol. XII No. 26
ISSN 1081-2717

September 18, 2003


The Integrity Center, Inc.
"objective risk management services"


September 19, 2003


More FCRA Amendments
Could Be Coming
By Year's End

Numerous powerful organizations have very strong opinions about, and large vested interests in, various parts of these potential amendments. The following is the status of these proposed amendments as we understand them today.

The Title of the House version of the FCRA amendments (HR 2622 EH), which passed the House on 9/10/03, and was sent to the Senate on 9/11/03, is the:

"Fair and Accurate Credit Transactions Act of 2003"

The stated mission of the Act is "To amend the Fair Credit Reporting Act, to prevent identity theft, improve resolution of consumer disputes, improve the accuracy of consumer records, make improvements in the use of, and consumer access to, credit information, and for other purposes."

Apparently, the driving force behind having this legislation appear at this time is the fact that "the national uniformity of key provisions in the FCRA is currently scheduled to expire January 1, 2004".

The banking, insurance, stock brokerage, and other industries want one national standard that cannot be over-ridden by State laws on this issue. They want Federal law to preempt State law. California has just passed a tough new privacy law which would be nullified, for instance, by the Federal law the way that it is currently written.

These industry groups seem to have two major goals: (1) they don't want to have to deal with the prospect of 50 different sets of State privacy laws. However, there are numerous organizations, and the States themselves, that say the States should have the right to regulate their own privacy standards. And, (2) these industry groups want to be able to use a single, more relaxed, national standard for their affiliate cross-marketing purposes.

Because of the momentum created by these industry groups to get FCRA amendments yet this year on this preemption issue, two other primary efforts appear to have been rolled into this Act.

One of these other efforts is backed by all of the advocates wanting tighter legislation to help prevent Identity Theft. They have gotten their portion of these amendments also. The States feel that by having a State's right to create identity theft protections permanently preempted, they would have their ability to protect their citizens impaired.

The other primary effort is by the group of law firms and investigators who want to be able to freely investigate their client's employees who are suspected of wrong-doing, without becoming Consumer Reporting Agencies as defined under the FCRA, and without being encumbered by certain privacy requirements of the current FCRA law.

There are many other issues addressed by these proposed amendments such as: fraud alerts, truncation of credit and debit card account numbers, blocking the use of information created by identity theft, resolving consumer disputes, reasonable investigation, accuracy of consumer reports, disputed information, re-pollution of consumer reports with bad information, consumer access to credit reports and credit scores, unsolicited offers to consumers, sharing of medical information, and consumer financial literacy, among others.

Then, there are the issues that are not addressed such as: using credit scores for insurance purposes, debt collection on consumers who were victims of identity theft, notification to consumers of database security breaches, protecting consumers against credit card interest rates being tied to credit scores, the right of a consumer to freeze access to their credit file, and issues of disparate impact, among others.

The reason for this issue of The Integrity News is to give our subscribers a heads-up on this proposed new legislation, especially Title VI - Protecting Employee Misconduct Investigations. "A great deal of the ( original ) impetus for the FCRA was not errors in credit reports, but abuses in investigative reports, including reports relating to employment."

"This provision ( Title VI ) would exclude employer investigations of sexual harassment or other workplace violations from the FCRA's requirement that employees (wrongdoers OR victims) be notified of third party investigations of 'suspected misconduct' and be given a copy of the consumer report if an adverse action is taken." That is, notice, authorization, and giving the accused the details of the resulting report, would not be required for an adverse action resulting from an Employee Misconduct Investigation.

It seems like Title VI in its current form would provide plenty of room for serious abuses. A law this broad could lead to the assumption that every investigated employee is guilty. "The accusation against the employee may: be malicious, be vindictive, be discriminatory because of sex, reflect labor organization bias, show minority discrimination, or show that the employee is simply disliked by someone."

It further seems that not having to tell the accused who their accusers are, nor give them the details of the investigative report that resulted in the adverse action, will lead to an un-ending series of legal actions against employers.

STAY TUNED --- there is surely more to come !


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