Sharing FCRA Information

Question: Does the FCRA permit us to share information about our experience with our customers with a third party? Don't we need a permissible purpose to do this?

Answer: There is a lot of confusion going around in the wake of last year's FTC interpretive letters and the new privacy act. Actually, the kind of sharing you give as an example is a greater concern under the G-L-B Privacy Act than FCRA.

Here's why.

The FCRA exists to regulate the ways in which information about consumers is collected and sold or distributed. The FCRA is by itself a privacy act. However, its primary regulatory target is consumer reporting agencies rather than creditors. The FCRA limits the way that consumer reporting agencies can compile and distribute consumer reports. Once compiled, the consumer reporter may release a consumer report (which we usually refer to as a credit report) only for a permissible purpose. One such purpose is the consumer's request for credit.

FCRA defines what constitutes a consumer reporting agency. If you meet that definition, all sorts of compliance requirements are triggered. So you don't want to be a consumer reporting agency inadvertently. FCRA allows you to report to third parties the information about your own experience with the consumer. If you share information that you acquired in any other way, you become a consumer reporter. Don't go there.

So for purposes of FCRA, if you only share information about your own experience with the consumer, you are ok. The FCRA permissible purposes don't apply to you - but the G-L-B Privacy Act does. If you are asked for information about one of your customers, you should take two steps before making a decision to share. First, is the information only about your own experience with the consumer? If so, FCRA is not a barrier. But next you should look at the new Privacy Act and regulations and determine whether you are permitted to share with a third party under that law.

Copyright © 2001 Compliance Action. Originally appeared in Compliance Action, Vol. 6, No. 14, 12/01