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Obtaining Credit Reports: Is a signature required?

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Our office is in an uproar over whether or not we have to obtain signatures before credit is pulled. I have a history in banking and have always been taught that we must have a signed application. An agent at the credit bureau said all we need is a verbal intent to do business. Please point us in the right direction.

A bank can obtain a consumer report for any legitimate business need that is initiated by the consumer or to review an account to determine whether the consumer continues to meet the terms of the account. Legitimate business needs include credit transactions, review or collection of an account, opening a deposit or savings account or underwriting of insurance. You must have written authorization to request a consumer report for employment purposes [see Section 604(a)(3)(f)].Also Section 615(c)(2) states:
The section does not require that the user provide any kind of advanced notification to consumers before a consumer report is obtained.

Although there is no requirement to get the consumer’s permission or signature to allow the bank to pull a consumer report (with the exception of a report for employment purposes), the bank could expose itself to civil liability if the consumer contends that the bank did not have a legitimate business need that it is initiated by the consumer. Therefore, I have always suggested that you have a signed application, signature card or other documentation to justify your business need for the consumer report. However, written permission would not be practical with regard to pulling a consumer report to monitor an account, however.

First published on 10/14/02

First published on 10/14/2002

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