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#972452 - 06/10/08 06:00 PM Negative Information
Anonymous
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According to FACTA a Notice of Negative Information must be given to "consumers", which is defined as an individual. My question is what if we have a business loan in a LLC name, but an individual is personally guarantying the loan. Do we need to give a Notice of Negative Information on the business loan?

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#972674 - 06/10/08 08:51 PM Re: Negative Information Anonymous
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
Actually is says it must be given to customers as defined by section 509 Public Law 106--102.

From the FAQ to to GLBA:

http://www.ftc.gov/privacy/glbact/glb-faq.htm

Q&A B. 1.

. . . A customer is a type of consumer, namely, an individual who has an ongoing relationship with you under which you provide a financial product or service. . . .

Therefore if you will report negative information on the individual (customer) then yes you must provide the notice.
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The opinions expressed are mine and they are not to be taken as legal advice.

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#973534 - 06/11/08 10:15 PM Re: Negative Information Dan Persfull
fmissle Online
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Joined: Jul 2007
Posts: 1,016
Pac NW
Originally Posted By: Dan Persfull
Actually is says it must be given to customers as defined by section 509 Public Law 106--102.

From the FAQ to to GLBA:

http://www.ftc.gov/privacy/glbact/glb-faq.htm

Q&A B. 1.

. . . A customer is a type of consumer, namely, an individual who has an ongoing relationship with you under which you provide a financial product or service. . . .

Therefore if you will report negative information on the individual (customer) then yes you must provide the notice.


(not the original poster, but)... looking further, I see this
Note that neither a business nor an individual who obtains a financial product or service for business purposes is a consumer or a customer under the Privacy Rule.

So if the loan was business purpose, even if the guarantor is an individual, do you still have to give them the notice? That makes me think no.

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#973623 - 06/12/08 01:39 AM Re: Negative Information fmissle
Dan Persfull Offline
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Dan Persfull
Joined: Aug 2002
Posts: 47,517
Bloomington, IN
I am aware of that statement and it would be a point of discussion, but as I look at it, it states that they are not customers for the purposes of the privacy rules. The FACT Act merely refers to the definition of a customer.
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The opinions expressed are mine and they are not to be taken as legal advice.

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