**After The Deal Is Done:**

**Debt Collection and Credit Reporting**

[Captain Julie]{.smallcaps} J.R[. Huygen]{.smallcaps}[^1]

**I. INTRODUCTION**

After the door-to-door salesman has the contract, after the telemarketer
has the credit card number, after the bank has the mortgage, after the
car dealer has the lease---in other words, after the deal is done---the
consumer becomes the client. No judge advocate engages in legal
assistance for any length of time without quickly encountering the first
of many clients worrying about a deal-gone-bad. For a lot of those
clients, the bad deal means an even worse payment situation, and that
may lead to problems with debt collection and credit reporting.

"Complaints to the \[Federal Trade\] Commission about third-party debt
collectors ranked second only to complaints about credit bureaus in
1998."[^2] Of the most common complaints by consumers to the Federal
Trade Commission as of July 1998, four of the top ten involved debt
collection and credit reporting.[^3] As long as consumers rely on credit
agreements to transact business, those complaints will keep on coming.
For a variety of reasons, including easing business transactions and
addressing consumer complaints, the federal government has enacted laws
governing debt collection and credit reporting. This article discusses
the law at its most basic level, examining the process, procedures, and
protections of both pieces of legislation---issues about which a legal
assistance attorney must be well versed.

**II. DEBT COLLECTION**

"There is abundant evidence of the use of abusive, deceptive, and unfair
debt collection practices by many debt collectors. Abusive debt
collection practices contribute to the number of personal bankruptcies,
to marital instability, to the loss of jobs, and to invasions of
individual privacy."[^4] So begins the Fair Debt Collection Practices
Act (FDCPA).[^5] The FDCPA was enacted as part of the Consumer Credit
Protection Act[^6] on September 20, 1977 and last amended on September
30, 1996. Its stated purpose is "to eliminate abusive debt collection
practices by debt collectors, to insure that those debt collectors who
refrain from using abusive debt collection practices are not
competitively disadvantaged, and to promote consistent State action to
protect consumers against debt collection abuses."[^7] It achieves this
purpose by regulating communication between a debt collector and a
consumer or a third party.

**A. Process**

The process of debt collection is a simple one. A consumer and a
creditor conduct a business transaction. The consumer fails to pay, and
the creditor pursues the consumer for the amount owed. The creditor uses
letters, telephone calls, or personal visits. If and when these efforts
fail, the creditor pursues repossession or refers the matter to a debt
collector. The debt collector uses letters, telephone calls, or personal
visits. If and when these efforts fail, the debt collector or creditor
pursues legal action against the consumer.

*Clomon v. Jackson*[^8] is discussed below for its holding, but it is
raised here for its facts, which illustrate a typical debt collection
process. Ms. Clomon owed \$9.42 for a magazine subscription to American
Family Publishers (AFP), a company known for its sweepstakes and
spokesmen. AFP employed NCB Collection Services (NCB) as its debt
collection agency on its debts, numbering approximately one million per
year. AFP provided electronic information to NCB, which used the
information to send form letters. Without a response from the consumer
to the first form letter, NCB's computer system automatically sent
additional letters. Not only was a response from the consumer necessary
to stop the flow of letters, one was necessary before a human being
would even review the consumer's file.[^9]

Clomon received six form letters, the first from 'Althea Thomas, Account
Supervisor,' the other five from 'P.D. Jackson, Attorney at Law, General
Counsel, NCB Collection Services.' Jackson was an attorney, a part-time
lawyer for NCB. He approved the form of the letters sent to Clomon and
other consumers, but he never actually signed them. In fact, he never
had any personal knowledge of Clomon or her file.[^10] Eventually,
Clomon prevailed on summary judgment and then again on appeal claiming
that Jackson made a "false, deceptive, or misleading
representation"[^11] in violation of the FDCPA by allowing the use of
his letterhead and signature on the form letters.[^12]

**B. Protections**[^13]

Consumer protection under the FDCPA is contingent upon the Act's
definitions, and effective legal assistance on this issue demands a
clear understanding of the key definitions in the statute. The
legislation focuses its protective power on the communication between
the debtor and collector. As a result, the statute's definition of the
word "communication" is a logical place to begin an evaluation of the
legislation. A *communication* is "the conveying of information
regarding a debt directly or indirectly to any person through any
medium."[^14] It does not, however, include a legal notice, a legal
filing or service, or any contact about a filed lawsuit.[^15] With
regard to the parties, a *consumer* is "any natural person obligated or
allegedly obligated to pay any debt."[^16] A *creditor* is

> any person who offers or extends credit creating a debt or to whom a
> debt is owed, but such term does not include any person to the extent
> that he receives an assignment or transfer of a debt in default solely
> for the purpose of facilitating collection of such debt for
> another.[^17]

By contrast, a *debt collector* is defined as "\[a\] person who uses any
instrumentality of interstate commerce or the mails in any business the
principal purpose of which is the collection of any debts, or who
regularly collects or attempts to collect, directly or indirectly, debts
owed or due or asserted to be owed or due another."[^18] A debt
collector, under the terms of the FDCPA, includes any employee of a debt
collector, any debt collector in the United States,[^19] any attorney
who regularly engages in debt collection activities,[^20] and any
creditor that collects debts in a name other than its own.[^21] However,
it does not include a creditor, an employee of a creditor, an attorney
of a creditor who collects debts in the creditor's name, or a creditor
that collects debts in its own name. Nor does it include a government
employee acting in an official capacity or an attorney who represents a
consumer against a debt collector.[^22] The focus of the controversy is,
of course, the *debt*, which is "any obligation or alleged obligation of
a consumer to pay money arising out of a transaction in which the money,
property, insurance, or services which are the subject of the
transaction are primarily for personal, family, or household purposes,
whether or not such obligation has been reduced to judgment."[^23] A
debt can include overdue bills, dishonored checks,[^24] and delinquent
student loans, while unpaid taxes[^25] or alimony, child support,[^26]
tort, or nonmonetary claims are not considered debt.[^27]

When a consumer alleges an FDCPA violation by a debt collector, the
standard used to evaluate the claim is the "least sophisticated
consumer."[^28] As discussed by the Second Circuit Court of Appeals in
*Clomon*,

> The most widely accepted test for determining whether a collection
> letter violates § 1692e is an objective standard based on the "least
> sophisticated consumer." This standard has also been adopted by all
> federal appellate courts that have considered the issue. . . . The
> basic purpose of the least-sophisticated-consumer standard is to
> ensure that the FDCPA protects all consumers, the gullible as well as
> the shrewd.[^29]

In *Clomon*, the court also discussed the least sophisticated consumer
standard in the context of consumer protection law. Quoting the United
States Supreme Court, the court noted that, "\[l\]aws are made to
protect the trusting as well as the suspicious."[^30] Comparing the
FDCPA to the Federal Trade Commission Act (FTCA),[^31] the court
reiterated a point it made in an earlier case that the law "was not made
'for the protection of experts, but for the public---that vast multitude
which includes the ignorant, the unthinking and the credulous.'"[^32]

The court reasoned that adopting the least sophisticated consumer
standard better served the purpose of consumer protection laws by
providing a "standard for evaluating deceptions that \[did\] not rely on
assumptions about the 'average' or 'normal' consumer." [^33] The court
acknowledged the sensibility of the use of this standard given the ease
with which people of below average sophistication or intelligence fall
prey to misleading or fraudulent schemes.[^34]

Recognizing that even the least sophisticated consumer standard has a
limit, the court wrote, "in crafting a norm that protects the naïve and
the credulous the courts have carefully preserved the concept of
reasonableness. . . \[E\]ven the 'least sophisticated consumer' can be
presumed to possess a rudimentary amount of information about the world
and a willingness to read a collection notice with some care."[^35]
Relying on the standard, the court concluded that its dual purpose was
served in that it adequately protected all consumers, "even the naïve
and trusting," against deceptive debt collection practices, and it,
likewise, protected debt collectors against liability for unusual
interpretations of collection notices.[^36] Regardless of the legal
theory surrounding use of the standard, the least sophisticated consumer
standard marks the dividing line that a debt collector cannot cross in
an attempt to collect a debt from a consumer. Along this line lie the
FDCPA requirements of and restrictions on communication between debt
collector and consumer or third party.

*1. Requirements*

The requirements placed on the debt collector are fairly
straightforward. A debt collector must, as a basic matter, provide
proper notice of a debt. With the initial communication to a
consumer,[^37] or within five days of such, the debt collector must send
a written notice of the amount of the debt; the name of the creditor; a
statement that the debt will be assumed valid unless disputed by the
consumer within thirty days;[^38] and a statement that, if disputed, a
verification will be obtained and sent.[^39] Until the consumer disputes
the debt, the debt collector may continue collection efforts, even
within the 30-day period. If, within the thirty days, the consumer
disputes the debt, then the debt collector must cease collection
efforts. In other words, letters and telephone calls in pursuit of
collection must stop until the debt is verified. If the consumer
registers a dispute, the debt collector may still take legal action
against the consumer, even within the 30-day period.[^40] The failure of
a consumer to dispute the debt is not an admission of liability.[^41]

There is an additional requirement of a "mini-Miranda" notice.[^42] In
its initial written communication with the consumer,[^43] the debt
collector must state that it is attempting to collect a debt and that
any information obtained will be used for that purpose. Failure to
provide this notice constitutes a false or misleading
representation.[^44]

*2. Restrictions*

A debt collector may contact a third party for location information
about a consumer. Location information is limited to a consumer's home
address, home telephone number, and work address.[^45] When the debt
collector makes contact, he must identify himself, state his purpose of
confirming or correcting location information, and not identify his
employer unless asked. The debt collector may not make contact with a
specific third party more than once unless by request or for
correction.[^46] In addition, the debt collector may not communicate by
post card or indicate on mail the nature of his business or the
communication. For location information as well as other purposes, the
debt collector must contact the consumer's attorney if the attorney is
known,[^47] can be located, and is responsive.[^48] A creditor's
knowledge of a consumer's attorney is not imputed to a debt
collector.[^49]

In addition, a debt collector may not contact a third party about the
debt without prior consent by the consumer, permission of a court, or a
reasonable need to enforce a judgment. Otherwise, the debt collector's
contact is restricted to the consumer, consumer's attorney, consumer
reporting agency if permitted by law, creditor, creditor's attorney, and
debt collector's attorney.[^50] Even if there is no mention of the
debt,[^51] a debt collector may not contact a consumer, without the
consumer's consent or a court's permission, at any unusual or
inconvenient time or place or at the consumer's workplace if the
consumer's employer prohibits such contact. Before 8 *a.m.* and after 9
*p.m*. is presumed inconvenient, while Sunday is not so presumed.[^52]
These same restrictions apply to contacting the consumer's spouse or the
parent of a minor consumer.[^53] As with the purpose of acquiring
location information, the debt collector must contact the consumer's
attorney if the attorney is known, can be located, and is
responsive.[^54]

A debt collector also cannot contact a consumer if the consumer has
refused, in writing, to pay the debt or if the consumer has asked for no
further contact. The debt collector may then contact the consumer only
to notify the consumer that the collection is stopped, that further
remedies may be invoked, or that further remedies will be invoked.[^55]
Under no circumstances can a debt collector harass, oppress, or abuse
any person in pursuit of collection.[^56] This prohibition covers not
only the consumer but also third parties (e.g., spouse, parent, friend,
neighbor, coworker, or boss). The list of debt collector proscriptions
is not all-encompassing, but it includes the use or threat of violence
or harm to person, reputation, or property; the use of obscene or
profane or abusive language; the publication of consumer names other
than to a consumer reporting agency; and the repeated or continuous
calling to annoy, abuse, or harass.[^57] An example of such a
prohibition is unnecessary calls, which might, for example, include
leaving telephone messages with a consumer's neighbor for the consumer
when the debt collector has the consumer's telephone number.[^58]

A debt collector is also precluded, though not surprisingly, from using
false, deceptive, or misleading representations.[^59] As with
harassment, this prohibition covers third parties as well as the
consumer. Again, the list presented is not exhaustive, but it includes
implying affiliation with a governmental agency[^60] or a consumer
reporting agency; threatening arrest, imprisonment, property
seizure,[^61] or wage garnishment unless the action is lawful and
intended;[^62] threatening any illegal or unintended[^63] action;
threatening the communication of false information; and giving a false
name.[^64] It also includes lying about the character, amount, or legal
status of the debt; lying about whether the contact is from an attorney;
lying about the consumer's criminal status; and lying about whether the
communication is or is not a legal document and does or does not require
action.[^65] Though, if a debt collector resorts to legal action, it may
only be brought in the judicial district where the consumer
resides,[^66] the judicial district where the contract in dispute was
signed, or the judicial district where the real estate in dispute is
situated.[^67]

Finally, a debt collector is not permitted to use unfair or
unconscionable means to secure collection. A method of debt collection
may be unfair if it causes injury that is substantial, not outweighed by
countervailing benefits to consumers or competition, and not reasonably
avoidable by the consumer.[^68] Unfair or unconscionable practices
include collecting more than authorized by the debt agreement or law,
misusing a postdated check, charging for collect calls or telegram fees,
and threatening repossession when repossession is not legal or
intended.[^69]

**C. Penalties**

The FDCPA provides penalties for someone wronged by a debt collector,
who might be a consumer or a third party (e.g., spouse, parent,
relative, or friend).[^70] A wronged party may seek damages against a
debt collector in federal or state court[^71] within one year of the
date of the violation. A debt collector may be held liable for actual
damages, including out-of-pocket expenses as well as damages for
humiliation, embarrassment, anguish, and distress.[^72] Furthermore, a
debt collector may be held liable for statutory damages[^73] up to
\$1,000 per individual or \$500,000 per class plus attorney's fees and
court costs.[^74] The amount of damages depends on the frequency,
persistence, and nature of the debt collector's noncompliance as well as
the extent to which it was intentional.[^75] Generally, the debt
collector is held to a standard of strict liability unless the debt
collector demonstrates by a preponderance of the evidence that the
violation was unintentional and caused by a bona fide error.[^76]

In addition, an FDCPA violation may be an unfair and deceptive act or
practice in violation of the FTCA.[^77] Suspected violations should be
reported to the Commission, which can pursue violators and report
violations to Congress.[^78] For example, in October 1998, the
Commission announced a settlement in which Nationwide Credit, Inc.,
agreed to pay a \$1 million civil penalty, the largest ever in a debt
collection case.[^79]

**D. Practice Notes**

There are several practical considerations that would almost certainly
be helpful to the legal assistance attorney.

The legal assistance attorney should be cautious about representing
herself as a consumer's attorney, especially if contacting a debt
collector in writing or via telephone. Unless the attorney makes it
clear that the debt collector should contact the consumer directly, the
debt collector is obligated to restrict contact to the attorney.[^80] In
the Air Force, the limits on the legal assistance program combined with
the frequent moves of attorneys and client-consumers make it difficult
for a legal assistance attorney to take on long-term representation of a
client with debt collection problems.

Consider having a form letter for a client to use when replying to
initial communication from a debt collector. The letter should cite the
FDCPA and should be signed by the consumer, not the attorney. It should
demand verification of the debt[^81] and give convenient days and times
for contacting the consumer at home. It should also state that the debt
collector should not contact the consumer at the workplace. Depending on
the consumer's specific situation, the letter might also contain a
refusal to pay the debt or a request for no further contact.[^82] In
today's computer-reliant society, maintain such a letter (or, for that
matter, letters) on a computer and preparing for the client while the
client waits, should be almost as easy as the touch of a button.

Be sure to advise a client who is experiencing financial difficulties to
use the resources available to him (e.g., the assistance of his first
sergeant and/or commander and the counseling services of the Family
Support Center). Remind the client that a military member is expected to
pay just financial obligations in a proper and timely manner.[^83]

Inform commanders and first sergeants about procedures regarding
airmen's indebtedness. A commander should process a complaint received
about an airman's indebtedness,[^84] but the commander should not give
out information (e.g., the airman's address[^85] or action being taken
against the airman).[^86] The Air Force does not have the authority to
force payment (e.g., order from a commander) without a court order,[^87]
but it may take action against an airman who fails in his financial
responsibilities.[^88] It is worth noting that an airman, like any other
citizen, has the right to file for bankruptcy and that a bankruptcy
filing in and of itself cannot be grounds to take action against the
airman.[^89]

**III. CREDIT REPORTING**

While any deal-gone-bad has immediate undesirable consequences, such as
a consumer getting embroiled in the process of debt collection, it has a
potential long-term aftereffect---the credit report. A negative credit
report can keep a consumer from having a credit card, obtaining an
insurance policy, buying a house, getting a job, and more. Because a
credit report can have such a powerful impact, its importance cannot be
understated, and the law that regulates credit reporting, the Fair
Credit Reporting Act (FCRA),[^90] should not, indeed cannot, be ignored.

**A. Process**

Credit reports are generated from a process of information exchange. A
consumer and a creditor conduct a business transaction. The creditor
reports the business transaction to a consumer reporting agency. The
consumer reporting agency compiles the consumer's business transactions,
as reported by all creditors, as well as information of public record
and produces a credit report. Creditors update the information, and the
consumer reporting agency updates the credit report. The consumer
reporting agency provides the credit report to would-be creditors and
other business entities, who may request the credit report and use the
information it contains only for the purposes allowed by law.

The FCRA requires that credit reports be accurate, updated, and provided
and used for limited purposes. It places responsibility on all parties
involved in the process of credit reporting---consumers should review
their credit reports for accuracy and report errors; those who furnish
information must provide accurate, updated information; consumer
reporting agencies must produce accurate, updated reports and provide
them only for the purposes permitted by the FCRA; and those who use the
information must do so only for the permitted purposes.

**B. Protections**[^91]

As with the FDCPA, the protections available under the FCRA depend on
the definitions of some of the key aspects of a credit-based
transaction. A *person* is any individual, business, government, or
other entity.[^92] In the context of the FCRA, the term "person" might
refer to a furnisher, supplier, or user of credit information, though it
usually does not refer to the subject of the information. A *consumer*
is, quite simply, an individual,[^93] usually the subject of a credit
report. A *consumer reporting agency* is any person that regularly
engages in assembling or evaluating consumer credit or other information
to furnish consumer reports to third parties.[^94] In general, the term
does not include those people that provide information to consumer
reporting agencies.[^95] A *consumer report*[^96] is any communication,
oral or written, of any information by a consumer reporting agency about
a consumer's credit, character, reputation, or lifestyle for the purpose
of establishing eligibility for credit, employment, or any other
authorized purpose.[^97] A report is a consumer, or credit, report if a
consumer reporting agency collects information for the report for one of
the purposes covered by the FCRA, if the consumer reporting agency
expects the report to be used for an FCRA purpose, or if a requestor
uses the report for an FCRA purpose.[^98] *Employment purposes* include
employment, promotion, reassignment, and retention.[^99]

Of course, issues under the FCRA usually arise only after credit has
been denied or refused. Under the FCRA, this is referred to as an
*adverse action*, which is defined more specifically as

> a denial or revocation of credit, a change in the terms of an existing
> credit arrangement, or a refusal to grant credit in substantially the
> amount or on substantially the terms requested. Such terms does not
> include a refusal to extend additional credit under an existing credit
> arrangement where the applicant is delinquent or otherwise in default,
> or where such additional credit would exceed a previously established
> credit limit.[^100]

It also means a denial, cancellation, increased charge, reduction, or
change of insurance; an adverse employment decision; a denial,
cancellation, increased charge, or change of government license; and an
action taken in connection with a consumer-initiated transaction and
adverse to the consumer's interests.[^101]

*1. Disclosures*

Adverse action occurs only after a consumer's credit information is
disclosed. Thus, the FCRA is specific as to when a consumer reporting
agency may furnish a consumer report and to whom. There are certain
circumstances that allow for the release of a consumer report---in
response to a court order or federal grand jury subpoena; per the
written consent of the consumer-subject of the report; to a person who
intends to use the report for a consumer's credit, employment,
insurance, or governmental license or a legitimate business need[^102]
for a business transaction initiated by the consumer or for the review
of a consumer's account; and in response to a child support award or
enforcement agency.[^103] Aside from the permissible purposes of credit
reports, there are conditions on their release. A credit report that
contains medical information may not be released for employment purposes
or for a credit or insurance transaction not initiated by the consumer
unless the consumer consents to the release.[^104]

When used for employment purposes, a credit report may be released only
to a person who certifies to the consumer reporting agency that it will
be used properly. Proper use means that the person has notified the
consumer in writing that the report may be procured and that the
consumer has consented in writing to the procurement. In addition,
proper use means that, before a person takes adverse action based on the
report, the person must provide the consumer a copy of the report and a
written description of the consumer's FCRA rights.[^105]

When used for a credit or insurance transaction that is not initiated by
the consumer, a credit report may be released only if the consumer
authorizes the release or if two conditions are met: (1) the transaction
is a firm offer and (2) the consumer may but has elected not to have his
name and address excluded from the list provided by the consumer
reporting agency to the person initiating the transaction.[^106] If
released, the credit report is released in redacted form.[^107] Under
the FCRA, a consumer has the right not to have information released for
credit or insurance transactions that the consumer does not initiate. A
consumer reporting agency must maintain a system by which a consumer may
notify the consumer reporting agency of non-consent for release using a
toll-free telephone number.[^108] In addition, a consumer reporting
agency that operates nationwide must maintain such a system jointly with
other nationwide consumer reporting agencies.[^109] A consumer reporting
agency may furnish a consumer's name, address and former addresses, and
employment and former employment to a governmental agency.[^110] There
are additional provisions for disclosure to the Federal Bureau of
Investigation for counterintelligence purposes.[^111]

*2. Duties*

Every entity in the chain of consumer information has responsibilities
for establishing and maintaining the integrity of that information. Any
weak link may result in a violation of the FCRA and an injury to the
consumer. The duties imposed by the FCRA must be taken seriously by
those providing and procuring consumer information. The duties in this
regard are primarily concerned with the accuracy of the information. For
example, a person who furnishes information to a consumer reporting
agency may not furnish the information if the person knows or
consciously avoids knowing that the information is inaccurate or if the
person has correctly been notified by the consumer that the information
is inaccurate. A person who regularly furnishes information to a
consumer reporting agency has a duty to correct and update such
information as well as a duty to notify the consumer reporting agency of
disputes, accounts voluntarily closed by the consumer, and delinquent
accounts.[^112]

A consumer reporting agency must follow reasonable procedures to assure
the accuracy of the credit reports it prepares.[^113] A credit report
may not contain information about bankruptcies older than ten years or
judgments or paid tax liens, accounts under collection, criminal records
of arrest, indictment, or conviction, or any other adverse information
older than seven years. However, a report may contain any and all of
this information if it will be used in connection with a credit
transaction or life insurance policy of \$150,000 or more or for
employment with an annual salary of \$75,000 or more.[^114] A credit
report must note if a consumer voluntarily closes a credit
account.[^115] It must also contain information on the failure of a
consumer to pay overdue child support if the information is provided or
verified by a governmental agency and is less than seven years
old.[^116] A consumer reporting agency must provide to furnishers and
users of information a notice of their FCRA responsibilities.[^117] To
that end, the Federal Trade Commission provides notices for consumer
reporting agencies' distribution.[^118]

A prospective user of FCRA information must identify himself, certify
his purpose, and certify that he has no purpose other than the one
stated. A consumer reporting agency must then make a reasonable effort
to verify the identity and purpose of the prospective user before
furnishing a credit report.[^119] A user may not resell a credit report
or any information therein, unless the user discloses to the providing
consumer reporting agency the identity of the subsequent user and the
subsequent user's purpose for the information. In addition, the user and
the subsequent user take on the same obligations of the consumer
reporting agency and the user, respectively, in that each must certify
and verify identity and purpose.[^120] If a user takes adverse action
based on a credit report,[^121] the user must notify the consumer of the
adverse action; the name, address, and telephone number of the consumer
reporting agency; and the consumer's rights to obtain a free copy of the
report and to dispute information contained in the report.[^122] If a
person takes adverse action based on credit information obtained from a
non-consumer reporting agency third party or corporate affiliate, the
person must notify the consumer of his right to request within sixty
days the reasons for the action and the nature of the information.[^123]
If a user makes a written credit or insurance solicitation, uninitiated
by the consumer and based on a credit report, then the user must make a
statement to the consumer about the use of the credit report, the
conditional nature of the offer, and the right of the consumer to have
information withheld from release.[^124]

**B. Remedies**

In addition to the right to access his credit report, a consumer has a
number of other important rights under the FCRA. Upon request, a
consumer is entitled to a substantial amount of information from a
consumer reporting agency: the information on him at the time of his
request with the exception of credit or other risk scores or predictors,
the sources of the information with the exception of sources for an
investigative consumer report, the identification of users and
end-users, their addresses, and their telephone numbers in the previous
two years for employment purposes and in the previous year for any other
purpose, the dates, payees, and amounts of checks used for adverse
characterization, and a record of inquiries for a credit or insurance
transaction not initiated by the consumer in the previous year. A
consumer reporting agency must also provide a written summary of the
consumer's FCRA rights[^125] and, if the consumer reporting agency
operates nationwide, a toll-free telephone number that may be used to
contact the consumer reporting agency.[^126]

Generally, a consumer reporting agency may charge up to \$8 for a
disclosure to a consumer unless the consumer requests the disclosure
within 60 days of an adverse action, in which case the disclosure is
available at no charge. A consumer is also entitled to one free
disclosure annually if the consumer is unemployed and intends to apply
for employment in the next 60 days, receives public welfare assistance,
or has reason to believe that the consumer reporting agency has
inaccurate information because of fraud.[^127]

If a consumer reporting agency is notified that a consumer disputes
information in his credit report, the consumer reporting agency must
indicate the dispute in the credit report.[^128] In addition, after the
consumer reporting agency receives notice of the dispute from the
consumer, the consumer reporting agency has thirty days to reinvestigate
the dispute free of charge and record its status or delete it from the
file.[^129] In the context of such an investigation, the consumer
reporting agency has five days to notify the furnisher of the disputed
information of the dispute and provide relevant information.[^130]

Once a furnisher of information is notified of a dispute, the furnisher
must investigate, report the results of the investigation to the
consumer reporting agency, and, if the information disputed is found to
be incomplete or inaccurate, report the results to all nationwide
consumer reporting agencies that received the information. The furnisher
must comply with the same time limits as the consumer reporting
agency.[^131] The consumer reporting agency has five days to notify the
consumer of the results of a completed reinvestigation. If the consumer
reporting agency finds that the disputed information is inaccurate,
incomplete, or unverifiable, the consumer reporting agency must modify
or delete it.[^132] If deleted, the information may not be reinserted
unless the furnisher certifies its completeness and accuracy. Also, if
disputed information is deleted, the consumer may request that the
consumer reporting agency notify any person who has received a report in
the previous two years for employment purposes or in the previous six
months for any other purpose of the deletion.[^133] If deleted
information is later reinserted, the consumer reporting agency must
notify the consumer within five days of the reinsertion. The consumer
reporting agency may terminate the reinvestigation if it reasonably
determines that the dispute is frivolous or irrelevant or if the
consumer has not provided sufficient information to investigate. The
consumer reporting agency must notify the consumer within five days of
such a determination and provide reasons and identification of missing
information. If the reinvestigation does not resolve the dispute, then
the consumer may file a brief statement that is provided, in whole or in
summary, with any subsequent report containing the disputed
information.[^134]

A consumer reporting agency cannot stop a user of a credit report from
disclosing the report's contents to the consumer-subject of the report
if the user has taken adverse action against the consumer based on the
report.[^135] If a consumer believes that a consumer reporting agency or
a furnisher or user of credit information has violated the FCRA, the
consumer has two years[^136] to seek damages in court.[^137] There are
several causes of action depending upon the circumstances surrounding
the case that may be asserted, though damages may be limited. A
person[^138] who willfully fails to comply with the FCRA is liable for
actual damages between \$100 and \$1,000.[^139] A person who obtains a
credit report under false pretenses[^140] or knowingly without a
permissible purpose is liable for the greater of actual damages or
\$1,000. Punitive damages,[^141] court costs, and attorney's fees could
also be awarded in the appropriate case.[^142] A person who negligently
fails to comply with the FCRA is liable for actual damages,[^143] court
costs, and attorney's fees, though punitive damages would probably not
be possible.[^144] By contrast, a consumer may not bring an action for
defamation, invasion of privacy, or negligence against a furnisher, a
consumer reporting agency, or a user based on information exchanged
pursuant to the FCRA unless the information was false and furnished with
malice or willful intent to injure the consumer.[^145] Criminal
liability may be imposed on a person who knowingly and willfully obtains
credit information from a consumer reporting agency under false
pretenses[^146] or an employee of a consumer reporting agency who
knowingly and willfully provide credit information to an unauthorized
user.[^147]

As with the FDCPA, the Federal Trade Commission is responsible for
enforcement of the FCRA. Suspected violations should be reported to the
Commission, which can pursue civil penalties for violations pursuant to
the FTCA.[^148] Other federal agencies have FCRA enforcement authority
in certain circumstances,[^149] and states may bring actions pursuant to
the FCRA.[^150]

**C. Practice Notes**

Not surprisingly, there are a few practical considerations for the legal
assistance attorney that would undoubtedly prove helpful when advising
clients on the FCRA.

Advise clients to beware of fraud. As business transactions become more
automated, electronic information is increasingly valuable and,
ironically, more easily obtained. More and more deals are done based on
personal information and not on a face-to-face meeting. A consumer can
now obtain credit over the telephone and via the Internet with simply a
name, date of birth, and Social Security number.[^151] Such information
is available for the taking---many consumers provide it without question
or hesitation, many documents (e.g., driver's license) list it, and many
people do not protect it. The same holds true of bank account and credit
card information.

Clients should be advised to obtain and review their credit reports from
all three major consumer reporting agencies on an annual basis.[^152] If
a client has experienced a credit problem, the client might be able to
receive the reports for free. Otherwise, the client may have to pay up
to \$8 per report, depending on the client's state of residence for
mailing purposes.[^153] Even \$24 is well worth the information. Only by
regular review of credit reports can a consumer know that his credit
history is correct and that he is not the victim of credit fraud.

Clients should also be counseled to consider closing credit accounts
that they do not use or need. Accounts that go unused usually go
unmonitored and thus are ripe for fraud and abuse. A credit report lists
open and closed accounts and account activity as well as creditor
information (e.g., mailing addresses).

Be aware that if a client is a consumer involved in the process of debt
collection, the client should communicate with the debt collector, the
creditor, and the major consumer reporting agencies. If a client is a
victim of fraud, the client should communicate with the major consumer
reporting agencies, all creditors, the Social Security Administration,
and local law enforcement. The client should file a police report, alert
the major consumer reporting agencies and all creditors (listed on the
credit reports), and contact the Social Security Administration about a
change of Social Security number.

**IV. CONCLUSION**

Consumers are doing deals, and those deals are often going bad, making
those consumers potential clients of legal assistance attorneys. For
evidence of consumers' financial difficulties, one need look no further
than the filing of personal bankruptcies, which hit an all-time high in
1998 and numbered 1,352,030 in the 12-month period ending June 30,
1999.[^154]

When assisting financially troubled clients, attorneys need to know and
use the consumer protection statutes, including all sections of the
Consumer Credit Protection Act. When assisting clients who are
experiencing problems with debt collection and/or credit reporting,
which are often linked, attorneys must explore all the protections and
possibilities available under the Fair Debt Collection Practices Act and
the Fair Credit Reporting Act. This article has described them, but more
information is readily available, especially on the Internet, where the
Federal Trade Commission, state attorney generals, and consumer groups
maintain and update pages. A zealous advocate can use this wealth of
information to the benefit of his disadvantaged client, the consumer on
the back end of a bad deal.

[^1]: ^\*^ *Captain Huygen (B.A., Harvard University; J.D., University
    of Maryland) is the Chief, Military Justice, Kunsan Air Base,
    Republic of Korea. She is a member of the Maryland State Bar.*

[^2]: Federal Trade Commission, *Twenty-First Annual Report to Congress
    Pursuant to Section 815(a) of the Fair Debt Collection Practices
    Act* (Mar. 19, 1999) \<http://www.ftc.gov/os/
    statutes/fdcpa/senate99.htm\> \[hereinafter Federal Trade
    Commission, *Annual Report*\].

[^3]: *See* Paul K. Davis, Senior Attorney, Atlanta Regional Office of
    the Federal Trade Commission, Lecture at the 43d Legal Assistance
    Course, The Judge Advocate General's School, United States Army
    (Oct. 22, 1998).

[^4]: 15 U.S.C. § 1692(a).

[^5]: *Id*. § 1692.

[^6]: *Id*. § 1601.

[^7]: *Id*. § 1692(e).

[^8]: 988 F.2d 1314 (2nd Cir. 1993).

[^9]: *See id.* at 1316.

[^10]: *See id.* at 1316-17.

[^11]: 15 U.S.C. § 1692e.

[^12]: *See* Clomon, 988 F.2d at 1320-21.

[^13]: 15 U.S.C. § 1692n. It should be noted that the protections
    discussed are based on provisions of federal law. States can and do
    offer more extensive legal protections for consumers from improper
    actions by debt collectors and creditors, but a discussion of those
    provisions is beyond the scope of this article. Legal assistance
    attorneys should be familiar with such protections, if any, offered
    by the state or states in which their clients conduct their
    business.

[^14]: 15 U.S.C. § 1692a(2).

[^15]: *See* Statements of General Policy or Interpretation, Staff
    Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg.
    50,097, 50,101 (1988). This FTC Staff Commentary is not binding but
    merely interpretive. *Id*.

[^16]: 15 U.S.C. § 1692a(3).

[^17]: *Id*. § 1692a(4).

[^18]: *Id*. § 1692a(6).

[^19]: The location of the consumer is irrelevant. *See* Statements of
    General Policy or Interpretation, Staff Commentary on the Fair Debt
    Collection Practices Act, 53 Fed. Reg. at 50,102.

[^20]: *See* Heintz v. Jenkins, 514 U.S. 291, 292 (1995). The FTC has
    recommended to Congress that an attorney engaging in only legal, as
    opposed to collection, practices not be covered by the FDCPA as a
    debt collector. Federal Trade Commission, *Annual Report*, *supra*
    note 1.

[^21]: *See* 15 U.S.C. § 1692a(6).

[^22]: *See* Statements of General Policy or Interpretation, Staff
    Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg.
    at 50,103.

[^23]: 15 U.S.C. § 1692a(5).

[^24]: *See*, *e.g.*, Snow v. Riddle, 143 F.3d 1350, 1353 (10th Cir.
    1998) (holding that a dishonored check is a debt for the purposes of
    the FDCPA in that a debt is created when one obtains goods and gives
    a check in return).

[^25]: *See*, *e.g.*, Staub v. Harris, 626 F.2d 275, 279 (3d Cir. 1980)
    (holding that unpaid taxes are not a debt for the purposes of the
    FDCPA because there is no traditional commercial relationship
    between taxpayer and state and the tax debtor is not a consumer
    debtor).

[^26]: *See*, *e.g.*, Mabe v. G.C. Services Ltd. Partnership, 32 F.3d
    86, 88 (4th Cir. 1994) (holding that child support is not a debt for
    the purposes of the FDCPA because it is not incurred to receive
    consumer goods or services).

[^27]: *See* Statements of General Policy or Interpretation, Staff
    Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg.
    at 50,102.

[^28]: *See*, *e.g.*, Smith v. Computer Credit, Inc., 167 F.3d 1052,
    1054 (6th Cir. 1999); Savino v. Computer Credit, Inc., 164 F.3d 81,
    85 (2d Cir. 1998); Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir.
    1991); Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1175 (11th Cir.
    1985) (using standard of "least sophisticated consumer"). *But see*
    Gammon v. G.C. Services Ltd. Partnership, 27 F.3d 1254, 1257 (7th
    Cir. 1994) (setting forth standard of "unsophisticated consumer").

[^29]: Clomon v. Jackson, 988 F.2d 1314, 1318 (2nd Cir. 1993).

[^30]: *Id.* (quoting Federal Trade Commission v. Standard Education
    Society, 302 U.S. 112, 116 (1937)).

[^31]: 15 U.S.C. § 41 (1999).

[^32]: Clomon, 988 F.2d at 1318-19 (quoting Charles of the Ritz
    Distributors Corp. v. Federal Trade Commission, 143 F.2d 676, 679
    (2nd Cir. 1944) (quoting Florence Manufacturing Co. v. J.C. Dowd &
    Co., 178 F. 73, 75 (2d Cir. 1910))).

[^33]: Clomon, 988 F.2d at 1319.

[^34]: *See id.*

[^35]: *Id*. The Seventh Circuit Court of Appeals deals with the
    question of a reasonable but least sophisticated consumer by
    applying an "unsophisticated consumer" standard.

    > Literally, the least sophisticated consumer is not merely "below
    > average," he is the very last rung on the sophistication ladder.
    > Stated another way, he is the single most unsophisticated consumer
    > who exists. Even assuming that he would be willing to do so, such
    > a consumer would likely not be able to read a collection notice
    > with care (or at all), let alone interpret it in a reasonable
    > fashion. Courts which use the "least sophisticated consumer" test,
    > however, routinely blend in the element of reasonableness. *See*
    > Clomon, 988 F.2d at 1319. In maintaining the principles behind the
    > enactment of the FDCPA, we believe a simpler and less confusing
    > formulation of a standard designed to protect those consumers of
    > below-average sophistication or intelligence should be adopted.
    > Thus, we will use the term, "unsophisticated," instead of the
    > phrase, "least sophisticated," to describe the hypothetical
    > consumer whose reasonable perceptions will be used to determine if
    > collection messages are deceptive or misleading.

    Gammon, 27 F.3d at 1257.

[^36]: Clomon, 988 F.2d at 1320. Again, the Seventh Circuit Court of
    Appeals perceives the issue from a slightly different angle.

    > We reiterate that an unsophisticated consumer standard \[as
    > opposed to a least sophisticated consumer standard\] protects the
    > consumer who is uninformed, naïve, or trusting, yet it admits an
    > objective element of reasonableness. The reasonableness element in
    > turn shields complying debt collectors from liability for
    > unrealistic or peculiar interpretations of collection letters.

    Gammon, 27 F.3d at 1257.

    The court applied the unsophisticated consumer standard in *Bartlett
    v. Heibl*, wherein the court wrote, "the letter to Bartlett was
    confusing; nor . . . could we doubt that it was confusing---we found
    it so, and do not like to think of ourselves as your average
    unsophisticated consumer." Bartlett v. Heibl, 128 F.3d 497, 501 (7th
    Cir. 1997). Interestingly, the court went on to say, "Judges too
    often tell defendants what the defendants cannot do without
    indicating what they can do, thus engendering legal uncertainty that
    foments further litigation." *Id*. at 501. The court then included
    in its opinion a sample letter for debt-collecting attorneys to use
    and closed with a warning.

    > We cannot require debt collectors to use "our" form. But of course
    > if they depart from it, they do so at their risk. Debt collectors
    > who want to avoid suits by disgruntled debtors standing on their
    > statutory rights would be well advised to stick close to the form
    > that we have drafted. It will be a safe haven for them, at least
    > in the Seventh Circuit.

    *Id.* at 502.

[^37]: *See*, *e.g.*, Frey v. Gangwish, 970 F.2d 1516, 1518-19 (6th Cir.
    1992) (holding that a debt collector is required to provide the
    validation notice in its initial communication with the consumer,
    even if the debt collector has already won a judgment against the
    consumer).

[^38]: *See*, *e.g.*, Russell v. Equifax A.R.S., 74 F.3d 30, 34-36 (2d
    Cir. 1996) (holding that a first notice violated the FDCPA which
    provided only ten days to pay the debt in contradiction of the
    30-day notice to dispute it and a similar second notice provided
    only five additional days, five fewer than the thirty days required
    by law).

[^39]: *See* Statements of General Policy or Interpretation, Staff
    Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg.
    50,097, 50,108 (1988).

[^40]: *See id.* at 50,109.

[^41]: *See* 15 U.S.C. § 1692g(c).

[^42]: *See* Federal Trade Commission, *Annual Report*, *supra* note 1.

[^43]: *See*, *e.g.*, Frey, 970 F.2d at 1519-20 (holding that a debt
    collector is required to provide the mini-Miranda notice in its
    initial communication with the consumer, even if the debt collector
    has already won a judgment against the consumer).

[^44]: *See* 15 U.S.C. § 1692e(11).

[^45]: *See id.* § 1692a(7).

[^46]: *See id.* § 1692b(3).

[^47]: Knowledge of a consumer's attorney is debt-specific. If the
    consumer notifies the debt collector of legal representation for one
    debt, then the consumer must re-notify the debt collector for
    subsequent debts that come to light. Graziano v. Harrison, 950 F.2d
    107, 113 (3d Cir. 1991).

[^48]: *See* 15 U.S.C. § 1692b(6).

[^49]: *See* Statements of General Policy or Interpretation, Staff
    Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg.
    50,097, 50,104 (1988).

[^50]: *See* 15 U.S.C. § 1692c(b).

[^51]: *See* Statements of General Policy or Interpretation, Staff
    Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg.
    at 50,103.

[^52]: *See id.* at 50,104.

[^53]: *See* 15 U.S.C. § 1692c(d).

[^54]: *See id*. § 1692c(a).

[^55]: *See id*. § 1692c(c).

[^56]: "This was the complaint we heard most frequently in 1998."
    Federal Trade Commission, *Annual Report*, *supra* note 1.

[^57]: *See* 15 U.S.C. § 1692d.

[^58]: *See* Statements of General Policy or Interpretation, Staff
    Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg.
    at 50,104.

[^59]: *See* 15 U.S.C. § 1692e.

[^60]: *See*, *e.g.*, Gammon v. GC Services Ltd. Partnership, 27 F.3d
    1254, 1258 (holding that a statement by a debt collector to a
    consumer regarding services the debt collector provided to federal
    and state governments to collect delinquent taxes implied to the
    consumer that the debt collector could cause tax problems for the
    consumer).

[^61]: *See*, *e.g.*, Crossley v. Lieberman, 868 F.2d 566, 572 (3d Cir.
    1989) (holding that a statement by a debt collector to an elderly,
    widowed consumer of a nonexistent lawsuit and foreclosure was an
    illegal threat).

[^62]: Lack of intent may be inferred when the amount of the debt is so
    small as to make the action totally unfeasible. Statements of
    General Policy or Interpretation, Staff Commentary on the Fair Debt
    Collection Practices Act, 53 Fed. Reg. at 50,106.

[^63]: *See*, *e.g.*, United States v. National Financial Services,
    Inc., 98 F.3d 131, 138-139 (4th Cir. 1996) (holding that a threat of
    legal action was illegal because the debt collector had not retained
    an attorney to institute a lawsuit).

[^64]: *See* 15 U.S.C. § 1692e(14).

[^65]: *See* 15 U.S.C. § 1692e. *See*, *e.g.*, Schweizer v. Trans Union
    Corp., 136 F.3d 233, 238 (2nd Cir. 1998) (holding that a letter from
    a debt collector, made to look like a telegram, did not communicate
    a false sense of urgency because the debt collector had not used
    words of urgency in the letter itself).

[^66]: *See*, *e.g.*, Fox v. Citicorp Credit Services, Inc., 15 F.3d
    1507, 1515 (9th Cir. 1994) (holding that the debt collector
    improperly filed suit in one county when the consumer resided in
    another, although the two counties are encompassed by one federal
    judicial district).

[^67]: *See* 15 U.S.C. § 1692i.

[^68]: *See* Statements of General Policy or Interpretation, Staff
    Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg.
    at 50,107.

[^69]: 15 U.S.C. § 1692f.

[^70]: *See*, *e.g.*, Wright v. Financial Services of Norwalk, Inc., 22
    F.3d 647, 649-50 (6th Cir. 1994) (holding that executrix of a
    consumer had standing to sue a debt collector).

[^71]: *See*, *e.g.*, Bates v. C & S Adjusters, Inc., 980 F.2d 865,
    867-68 (2nd Cir. 1992) (holding that the proper venue was the state
    to which the consumer had moved and had his mail forwarded, not the
    state where the creditor and debt collector were located and where
    the consumer's mail had been addressed).

[^72]: *See* Statements of General Policy or Interpretation, Staff
    Commentary on the Fair Debt Collection Practices Act, 53 Fed. Reg.
    at 50,109.

[^73]: *See*, *e.g.*, Bartlett v. Heibl, 128 F.3d 497, 499 (7th Cir.
    1997) (holding that statutory damages do not require that the
    consumer actually have suffered any harm).

[^74]: *See* 15 U.S.C. § 1692k(a)(2).

[^75]: *See id.* § 1692k(b).

[^76]: *See id.* § 1692k(c). *See*, *e.g.*, Fox v. Citicorp Credit
    Services, Inc., 15 F.3d 1507, 1514 (9th Cir. 1994) (holding that
    there was no bona fide error because the debt collector did not
    prove that there were "reasonable preventive procedures").

[^77]: *See* 15 U.S.C. § 1692l. The FTCA is codified at 15 U.S.C. § 41
    (1998).

[^78]: *See* 15 U.S.C. § 1692m.

[^79]: "Many of the alleged violations are the same as those addressed
    in a settlement with the Commission that NCI entered into in 1992;
    the company paid a civil penalty of \$100,000 at that time." Federal
    Trade Commission, *Annual Report*, *supra* note 1.

[^80]: *See* 15 U.S.C. § 1692c(a)(2).

[^81]: *See id*. § 1692g.

[^82]: *See id*. § 1692c.

[^83]: Air Force Instruction 36-2906, Personal Financial Responsibility
    ¶ 7.1 (Jan. 1, 1998) \[hereinafter AFI 36-2906\]. Violations of this
    responsibility could result in criminal liability for the military
    member. *See* 10 U.S.C. § 934, [Unif. Code of Military
    Justice]{.smallcaps} art. 134 (1998); [Manual for
    Courts-Martial]{.smallcaps}, United States, pt. IV, ¶ 71 (1998 ed.)
    \[hereinafter MCM\].

[^84]: AFI 36-2906, *supra* note 82, at ¶¶ 3.1, 3.4.

[^85]: *See id.* ¶ 4.6.

[^86]: *See id.* ¶ 3.1.4.

[^87]: *See id.* ¶ 3.4.2.

[^88]: *See id.* ¶ 3.1.6.

[^89]: Adverse action is appropriate only if there is continued
    financial irresponsibility, fraud, deceit, evasion, false promises,
    or circumstances indicating a deliberate nonpayment or grossly
    indifferent attitude. *Id.* ¶ 5.1.2; 10 U.S.C. § 934, [Unif. Code of
    Military Justice]{.smallcaps} art. 134; [MCM]{.smallcaps}, pt. IV, ¶
    71.

[^90]: 15 U.S.C. § 1681 (1999). The FCRA was most recently amended by
    the Consumer Credit Reporting Reform Act of 1996, Pub. L. No.
    104-208, div A, tit. II, subtit. D, ch. 1, § 2401, 1104 Stat.
    3009-426 (1996) (amending 15 U.S.C. § 1681b (1999)), the
    Intelligence Authorization Act for Fiscal Year 1998, Pub. L. No.
    105-107, 111 Stat. 2248 (1997), and the Consumer Reporting
    Employment Clarification Act of 1998, Pub. L. No. 105-347, § 1, 112
    Stat. 3208 (1998) (amending 15 U.S.C. § 1601).

[^91]: *See* 15 U.S.C. § 1681t. As with the FDCPA, states may offer more
    extensive legal protections for consumers than are available under
    the FCRA. Although a discussion of state law is beyond the scope of
    this article, legal assistance attorneys should be familiar with
    such protections, if any, offered by the state or states in which
    their clients conduct business.

[^92]: *Id*. § 1681a(b).

[^93]: *Id*. § 1681a(c).

[^94]: *Id*. § 1681a(f). This article uses the term *consumer reporting
    agency* to include a "consumer reporting agency that compiles and
    maintains files on consumers on a nationwide basis." *Id*. §
    1681a(p).

[^95]: *See*, *e.g.*, DiGianni v. Stern's, 26 F.3d 346, 348-49 (2nd Cir.
    1994) (holding that a retail department store that provided
    information on the store's customers to consumer reporting agencies
    was not itself a consumer reporting agency).

[^96]: The FCRA, despite its title, refers to consumer reports. In
    keeping with common terminology and everyday understanding, this
    article uses the term "credit report."

[^97]: 15 U.S.C. § 1681a(d). A consumer report may be an *investigative
    consumer report* if it includes information on a consumer's
    character, reputation, characteristics, or lifestyle obtained
    through personal interviews. *Id*. § 1681a(e). There are stricter
    disclosure requirements for investigative consumer reports than for
    consumer reports. *See* *Id*. § 1681d.

[^98]: *See*, *e.g.*, Ippolito v. WNS, Inc., 864 F.2d 440, 448-50 (7th
    Cir. 1988) (holding that evidence of a non-FCRA purpose for a report
    request does not determine whether the report is a "consumer
    report").

[^99]: 15 U.S.C. § 1681a(h). *See*, *e.g.*, Zamora v. Valley Federal
    Savings & Loan Association of Grand Junction, 811 F.2d 1368, 1370
    (10th Cir. 1987) (holding that employment purposes do not allow an
    employer to obtain the credit report of an employee's spouse).

[^100]: 15 U.S.C. § 1691(d)(6).

[^101]: *See id*. § 1681a(k).

[^102]: *See*, *e.g.*, Estiverne v. Sak's Fifth Avenue, 9 F.3d 1171,
    1173-74 (5th Cir. 1993) (holding that a report from a check approval
    company was a credit report and that a store's obtaining the report
    to determine whether to accept or reject a consumer's check was a
    legitimate business need).

[^103]: *See* 15 U.S.C. § 1681b(a).

[^104]: *See id*. § 1681b(g).

[^105]: *See id*. § 1681b(b).

[^106]: *See id.* § 1681b(c)(1).

[^107]: *See id.* § 1681b(c)(2).

[^108]: *See id.* § 1681b(c)(5).

[^109]: *See id.* § 1681b(e).

[^110]: *See id*. § 1681f.

[^111]: *See id*. § 1681u.

[^112]: *See id*. § 1681s-2(a).

[^113]: *See id*. § 1681e(b). *See*, *e.g.*, Spence v. TRW, Inc., 92
    F.3d 380, 383 (6th Cir. 1996) (holding that a consumer reporting
    agency has a duty of reasonable care and that the consumer reporting
    agency did not violate its duty by providing information about a
    debt that the consumer had not paid and had not informed the
    consumer reporting agency was disputed).

[^114]: *See* 15 U.S.C. § 1681c.

[^115]: *Id*. § 1681c(e).

[^116]: *Id*. § 1681s-1.

[^117]: *Id*. § 1681e(d).

[^118]: *See* 16 C.F.R. pt. 601, apps. B, C (1999). The FTC notices of a
    furnisher's and a user's responsibilities under the FCRA are
    available at http://www.ftc.gov.

[^119]: *See* 15 U.S.C. § 1681e(a).

[^120]: *See id*. § 1681e(e).

[^121]: The information in the credit report that is the basis of the
    adverse action need not be derogatory or negative. Fischl v. General
    Motors Acceptance Corp., 708 F.2d 143, 149-50 (5th Cir. 1983).

[^122]: *See* 15 U.S.C. § 1681m(a).

[^123]: *See id*. § 1681m(b).

[^124]: *See id*. § 1681m(d).

[^125]: *See* 16 C.F.R. pt. 601, app. A. The FTC notice of a consumer's
    rights under the FCRA is available at http://www.ftc.gov.

[^126]: *See* 15 U.S.C. § 1681g.

[^127]: *See id*. § 1681j.

[^128]: *See id*. § 1681c(f).

[^129]: The 30-day period may be extended for up to fifteen days if the
    consumer provides the consumer reporting agency additional
    information in that period unless, in that period, the consumer
    reporting agency finds that the disputed information is inaccurate,
    incomplete, or unverifiable. *Id*. § 1681i(a)(1).

[^130]: *See id*. § 1681i(a)(2).

[^131]: *See id*. § 1681s-2(b).

[^132]: A nationwide consumer reporting agency must implement an
    automated system that reports incomplete or inaccurate information
    to all nationwide consumer reporting agencies. *Id*. §
    1681i(a)(5)(D).

[^133]: *See id*. § 1681i(d).

[^134]: *See id*. § 1681i.

[^135]: *See id*. § 1681e(c).

[^136]: The two-year period begins on the date that liability arises
    unless "a defendant has materially and willfully misrepresented any
    information required under this subchapter to be disclosed to an
    individual and the information so misrepresented is material to the
    establishment of the defendant's liability to that individual under
    this subchapter . . . ." *Id*. § 1681p. *See*, *e.g.*, Clark v.
    State Farm Fire & Casualty Insurance Co., 54 F.3d 669, 671-73 (10th
    Cir. 1995) (holding that there was no discovery exception to the
    two-year statute of limitations).

[^137]: 15 U.S.C. § 1681p.

[^138]: *See*, *e.g.*, Mone v. Dranow, 945 F.2d 306, 308 (9th Cir. 1991)
    (holding that a corporate president and chief executive officer was
    liable for his actions under the FCRA even if he was acting in his
    corporate capacity); Yohay v. City of Alexandria Employees Credit
    Union, Inc., 827 F.2d 967, 972-73 (4th Cir. 1987) (holding that an
    employer was liable for the actions of its employee under the FCRA
    even if the employee was not acting in an official capacity).

[^139]: 15 U.S.C. § 1681n(a)(1).

[^140]: *See*, *e.g.*, Comeaux v. Brown & Williamson Tobacco Co., 915
    F.2d 1264, 1273-74 (9th Cir. 1990) (holding that a user obtained a
    credit report under false pretenses when it obtained the report for
    the permissible purpose of employment but actually used the report
    for another, impermissible purpose).

[^141]: *See*, *e.g.*, Fischl v. General Motors Acceptance Corp., 708
    F.2d 143, 151 (5th Cir. 1983) (holding that negligent noncompliance
    allows actual damages and attorney's fees; willful noncompliance
    allows punitive damages, including damages from humiliation, mental
    distress, and injury to reputation; and a showing of malice is not
    necessary).

[^142]: 15 U.S.C. § 1681n. *See*, *e.g.*, Casella v. Equifax Credit
    Info. Services, 56 F.3d 469, 474 (2d Cir. 1995) (holding that actual
    damages did not include the attorney fees incurred by the consumer
    merely to notify consumer reporting agencies of a dispute, rather
    than to force their compliance with the FCRA).

[^143]: *See*, *e.g.*, Stevenson v. TRW Inc., 987 F.2d 288, 296-97 (5th
    Cir. 1993) (holding that a consumer could recover actual damages for
    mental anguish).

[^144]: *See* 15 U.S.C. § 1681.

[^145]: *See id*. § 1681h(e).

[^146]: *See id*. § 1681q.

[^147]: *See id*. § 1681r.

[^148]: *See id*. § 1681s.

[^149]: *See id*. § 1681s(b).

[^150]: *See id*. § 1681s(c).

[^151]: For an overview of Internet consumer privacy issues, see Major
    R. Ken Pippin, *Consumer Privacy on the Internet: Its \"Surfer
    Beware\"*, 47 [A.F. L. Rev]{.smallcaps}. 125 (1999).

[^152]: Equifax can be contacted at (800) 997-2493 or
    [http://www.equifax.com](http://www.equifax.com/). Experian
    (formerly TRW) can be contacted at (888) 397-3742 or
    [http://www.experian.com](http://www.experian.com/). Transunion can
    be contacted at (800) 888-4213 or http://www.transunion.com.

[^153]: The fee that a consumer reporting agency may charge for a credit
    report is set by law and tied to the Consumer Price Index. 15 U.S.C.
    § 1681j(a). The present fee is \$8 per report except for residents
    of Connecticut (\$5), Maine and Minnesota (\$3), and Colorado,
    Georgia, Maryland, Massachusetts, New Jersey, and Vermont (free).
    Fee information is available on the web sites of the consumer
    reporting agencies. *See* *supra* note 151.

[^154]: Associated Press, *Personal Bankruptcies Decline* (Aug. 10,
    1999) \<http://www.nytimes.
    com/aponline/f/AF-Bankruptcy-Filings.html\>.