69776 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

1Among the commenters were the following: 

consumer commenters—the Consumer Federation 

of America, Consumers Union, the Electronic 

Privacy Information Center, the Identity Theft 

Resource Center, the National Association of 

Consumer Advocates, the National Consumer Law 

Center, the National Council of La Raza, the Privacy 

Rights Clearinghouse, and the U.S. Public Interest 

Research Group; finance commenters—Independent 

Community Bankers of America, the American 

Financial Services Association, MBNA, the 

Mortgage Bankers Association, Visa, MasterCard 

International, Wells Fargo, the American Bankers 

Association, America’s Community Bankers; 

business commenters—ACA International, the 

Coalition to Implement the FACT Act (which 

includes banks, insurance companies, the National 

Retail Federation, Fannie Mae, and Fair Isaac & 

Co.); industry commenters—the Consumer Data 

Industry Association, Equifax, Experian, Trans 

Union, and USIS Commercial Services, Inc.

2The Federal banking agencies are: the Federal 

Reserve Board of Governors, the Office of the 

Comptroller of the Currency, the Federal Deposit 

Insurance Corporation, and the Office of Thrift 

Supervision.

FEDERAL TRADE COMMISSION

16 CFR Parts 601 and 698 

RIN 3084–AA94 

Summaries of Rights and Notices of 

Duties Under the Fair Credit Reporting 

Act

AGENCY: Federal Trade Commission.

ACTION: Final Guidance on Model 

Disclosures. 

SUMMARY: The Federal Trade 

Commission is publishing in final form 

a number of documents that it is 

required to issue by the Fair Credit 

Reporting Act (FCRA), which was 

significantly amended by the recently 

enacted Fair and Accurate Credit 

Transactions Act. These are: A summary 

of the rights under the FCRA of victims 

of identity theft; a general summary of 

consumer rights under the FCRA; a 

notice of the duties of persons that 

furnish information to consumer 

reporting agencies; and a notice of the 

duties of users of information obtained 

from consumer reporting agencies. 

These documents will be distributed by 

consumer reporting agencies and others 

to consumers and to businesses that 

either use information obtained from 

consumer reporting agencies or furnish 

information to consumer reporting 

agencies.

DATES: Effective Date: January 31, 2005.

FOR FURTHER INFORMATION CONTACT: For 

the summary of identity theft rights, 

contact Monique Einhorn, Attorney, 

Division of Planning and Information, 

Federal Trade Commission, 600 

Pennsylvania Ave. NW., Washington, 

DC 20580, 202–326–3228; for the 

general summary of consumer rights 

and the furnisher and user notices, 

contact William Haynes, Attorney, 

Division of Financial Practices, Federal 

Trade Commission, 600 Pennsylvania 

Ave. NW., Washington, DC 20580, 202–

326–3224.

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The Commission is issuing in final 

form four documents that describe 

rights and duties under the Fair Credit 

Reporting Act (FCRA), 15 U.S.C. 1681 et 

seq. The Commission is issuing these 

documents because of changes to the 

FCRA made by the Fair and Accurate 

Credit Transactions Act of 2003 (FACT 

Act or Act), Public Law 108–159, 117 

Stat. 1952, which was signed into law 

on December 4, 2003. 

The FACT Act amendments directed 

the Commission to issue, for the first 

time, a summary of the rights of identity 

theft victims. The changes made to the 

FCRA by the FACT Act also rendered 

obsolete three documents that the 

Commission issued in 1997: A general 

summary of the rights of consumers 

under the FCRA; a notice of the duties 

under the FCRA of persons that furnish 

information to consumer reporting 

agencies; and a notice of the duties 

under the FCRA of persons that use 

information obtained from consumer 

reporting agencies. 62 FR 35586 (1997). 

The Commission published proposed 

versions of all four documents for 

public comment on July 16, 2004. 69 FR 

42616 (2004). The Commission has 

received numerous comments from 

consumers and from the following: 

organizations representing consumer 

interests (‘‘consumer group 

commenters’’); banks, credit unions, and 

associations of banks (‘‘finance 

commenters’’); business entities and 

groups (‘‘business commenters’’); and 

consumer reporting industry members 

and associations (‘‘industry 

commenters’’).1 Because many 

commenters in a particular group raised 

the same or similar issues, we will refer 

in this discussion to the commenters by 

group (e.g., ‘‘finance commenters,’’ 

‘‘industry commenters’’) unless it is 

useful to identify a commenter by name. 

Persons interested in reviewing the 

comments may go to the Commission’s 

Web site (www.ftc.gov/os/comments/

FACTA-summaries/index.htm).

II. The Summary of Identity Theft 

Rights 

A. Background 

Section 609(d) of the FCRA requires 

the Commission, in consultation with 

the Federal banking agencies 2 and the 

National Credit Union Administration, 

to prepare a model summary of the 

rights of consumers ‘‘with respect to the 

procedures for remedying the effects of 

fraud or identity theft.’’ This model 

summary must be distributed by 

consumer reporting agencies to any 

consumer who ‘‘contacts a consumer 

reporting agency and expresses a belief 

that the consumer is a victim of fraud 

or identity theft.’’ Section 609(d)(2) 

provides that consumer reporting 

agencies’ obligation to distribute this 

summary begins 60 days after the date 

on which the model summary of rights 

is prescribed in final form by the 

Commission.

The proposed summary discussed the 

major rights of identity theft victims 

under the FCRA to remedy the effects of 

fraud or identity theft. These include: 

the right to obtain free file disclosures, 

the right to file fraud alerts, the right to 

obtain documents or information 

relating to transactions involving the 

consumers’ personal information, the 

right to block the reporting of 

information by consumer reporting 

agencies resulting from identity theft, 

and the right to prevent persons who 

furnish information to consumer 

reporting agencies from reporting 

information that is the result of identity 

theft. In preparing both the proposed 

model summary and the final one, the 

Commission consulted with the federal 

banking agencies and the National 

Credit Union Administration, in 

accordance with the requirements of 

Section 609(d). 

B. General Issues Raised by Commenters 

1. The Distribution of a ‘‘Substantially 

Similar’’ Summary 

Section 609(d) requires the 

Commission to issue a ‘‘model’’ 

summary and requires the consumer 

reporting agencies to distribute a 

summary containing ‘‘all of the 

information required by the 

Commission.’’ In the July 16, 2004, 

Federal Register notice the Commission 

indicated that summaries issued by 

consumer reporting agencies would be 

compliant if they displayed ‘‘the 

Commission-mandated information 

‘clearly and prominently’ in a form 

substantially similar to the 

Commission’s model summary.’’ 69 FR 

42616, 42617. 

Consumer group commenters 

expressed great concern regarding the 

apparent flexibility permitted under a 

‘‘substantially similar’’ approach. They 

suggested that even slight deviations in 

wording or placement of the rights 

within a document could allow the 

meaning of important rights to lose their 

prominence or lack the required context 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69777

3The Commission has defined ‘‘substantially 

similar’’ to mean ‘‘that all information in the 

Commission’s prescribed model is included in the 

document that is distributed, and that the document 

distributed is formatted in a way consistent with 

the format prescribed by the Commission. The 

document that is distributed shall not include 

anything that interferes with, detracts from, or 

otherwise undermines the information contained in 

the Commission’s prescribed model.’’ 16 CFR 698.3.

4As proposed in the July 16 Federal Register

notice, this was the second section of the summary. 

To improve the clarity of the summary, however, 

the Commission has moved this discussion to the 

first section of the final summary, and has 

consolidated the discussion of free file disclosures 

in the second section.

5This same approach is taken in the general 

summary of consumer rights with respect to the 

nationwide consumer reporting agencies’ toll-free 

telephone number for accepting consumers’

prescreen opt-out elections under FCRA Section 

604(e).

to make them most apparent to the 

consumer.

Section 609(d)(2) requires that the 

identity theft summary provided to 

consumers by the consumer reporting 

agencies must contain all of the 

information contained in the 

Commission’s prescribed summary. 

Pursuant to this statutory direction, 

consumer reporting agencies may not 

eliminate any part of the summary of 

identity theft rights. By specifying that 

summaries must be ‘‘substantially 

similar’’ to the Commission’s prescribed 

form, the Commission intends only that 

consumer reporting agencies have the 

leeway to make minor changes without 

being in violation of the FCRA. The 

Commission has added a definition of 

‘‘substantially similar’’ to 16 CFR 

698.3.3

2. Understandability and Outreach 

Consumer group commenters 

suggested that for some consumers 

(especially those for whom English is 

not their primary language) the 

information and procedures discussed 

in the model summary may be difficult 

to comprehend. These commenters also 

pointed to the need for Commission 

outreach efforts to educate consumers. 

The Commission has tried, as much as 

possible, to use plain language in the 

summary but agrees that the notices 

need to be supplemented by outreach 

efforts and intends to do so. In addition, 

to better serve that portion of the 

population that is Spanish-speaking, the 

Commission has added a Spanish 

language statement at the top of the 

summary informing Spanish-speaking 

consumers where they can obtain more 

information in Spanish. In addition, the 

Commission will provide a Spanish 

translation of the summary, which will 

be available at the Commission’s 

identity theft Web site, along with other 

information in Spanish. The 

Commission has added language to 

Appendix E of 16 CFR part 698 stating 

that accurate translations of the identity 

theft summary for use in providing the 

summary to speakers of Spanish or 

another language will be compliant with 

the disclosure requirement. The 

Commission will also implement a 

media and education campaign to 

inform the public how to prevent 

identity theft, as required by Section 

151(b) of the FACT Act. 

C. Specific Issues Raised by 

Commenters 

1. Introductory Paragraph 

In the introduction to the proposed 

summary, the Commission included 

contact information referencing only the 

Commission’s identity theft Web site 

address. In response to suggestions from 

commenters, a Commission mailing 

address has been added to the 

introduction of the final summary for 

consumers who prefer to contact the 

agency via postal mail, or who do not 

have Web access. In response to 

industry, business, and finance 

commenters, and to improve clarity 

while maintaining brevity, the 

Commission also has shortened the 

general discussion of the FCRA in the 

introduction. Finally, to reflect changes 

in the definition of ‘‘identity theft’’

made by the Commission’s final Identity 

Theft Rule, the term ‘‘lawful’’ has been 

stricken from the introductory 

paragraph. See 69 FR 63922, 63924–25. 

2. Fraud Alerts 

The first section of the final summary 

(‘‘You have the right to ask that 

nationwide consumer reporting agencies 

place ‘‘fraud alerts’’ in your file’’), 

discusses the specific procedures that 

apply when fraud alerts are placed in 

consumers’ files.4 The language of the 

Commission’s proposal raised a few 

issues for commenters. One finance 

commenter suggested that the 

discussion be clarified to make clear 

that consumers may request only the 

initial fraud alert by telephone from the 

nationwide consumer reporting agencies 

because the extended alert requires 

submission of an identity theft report, 

and thus cannot be requested by 

telephone. The Commission has 

declined to adopt this suggestion. 

Although different procedures may have 

to be implemented by the nationwide 

consumer reporting agencies to 

accommodate the identity theft report 

requirement for the extended alert, 

Section 605A(d) requires ‘‘[e]ach 

consumer reporting agency described in 

Section 603(p)’’ to establish ‘‘procedures 

that allow consumers and active duty 

military consumers to request initial, 

extended, or active duty alerts * * * in 

a simple and easy manner, including by 

telephone.’’

The Commission has, however, 

clarified the discussion of fraud alerts to 

make clear that consumers must contact 

the ‘‘nationwide consumer reporting 

agencies’’ to request fraud alerts and 

that the initial alert stays in the 

consumer’s file for ‘‘at least’’ 90 days. 

The summary also contains a fuller 

explanation of the identity theft report 

requirement and refers consumers to the 

Commission’s identity theft Website for 

more detailed information. 

The Commission has revised the 

summary to include placeholders (‘‘1–

800–XXX–XXXX’’) for nationwide 

consumer reporting agencies’’ toll-free 

telephone numbers, rather than the 

current numbers used by those agencies. 

Although the summary must include 

these toll-free telephone numbers, they 

are subject to change, and the 

Commission thought it advisable to 

include the placeholders rather than the 

actual numbers to clarify that the 

summary must include up-to-date 

telephone numbers.5 The Commission 

notes that the names, Web site 

addresses, number, and identity of the 

nationwide consumer reporting agencies 

also are subject to change over time. To 

remain in compliance, the summary 

must accurately reflect changes to 

information that may change over time.

3. Free File Disclosures from Consumer 

Reporting Agencies 

The discussion of free file disclosures 

(‘‘You have the right to free copies of the 

information in your file’’) has been 

modified in response to industry 

comments that the use of the term 

‘‘consumer report’’ should be replaced 

by the term ‘‘file disclosure’’ to be more 

technically precise. 

In addition, industry and business 

commenters and the banking agencies 

that the Commission consulted 

suggested that the discussion of free file 

disclosures in the proposed summary 

was confusing. In order to resolve any 

confusion, the Commission has 

consolidated the discussion of free file 

disclosures in the second section of the 

summary: the new Section 605A rights 

to free file disclosures and the 

preexisting Section 612(c)(3) right to a 

free file disclosure now are discussed 

together. 

The Commission has also clarified the 

discussion to make clear that an 

extended alert at a nationwide 

69778 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

6FCRA Section 609(e)(5) provides that a business 

may decline to provide the requested information 

if, among other things, it does not have ‘‘a high 

degree of confidence’’ that it knows the requester’s 

identity, the request is based on a 

‘‘misrepresentation of fact’’ by the requester, or the 

information requested pertains to a person’s visit to 

a Web site or online service.

consumer reporting agency entitles the 

consumer to two free file disclosures in 

a 12-month period ‘‘following the 

placing of the alert.’’ Finally, this 

section has also been modified to make 

clear that consumers have the ability to 

obtain additional free file disclosures 

under other provisions of the FCRA. 

Consumers are directed to www.ftc.gov/

credit for more detailed information.

4. Obtaining Applications and Business 

Records Resulting From Identity Theft 

The Commission has made a number 

of modifications to section three of the 

summary (‘‘You have the right to obtain 

documents relating to fraudulent 

transactions made or accounts opened 

using your personal information’’). In 

response to industry, finance, and 

business commenters, the Commission 

has added language to this section that 

tracks the requirements of Section 

609(e) and clarifies that the consumer’s 

request for documents should be in 

writing, that a business may specify an 

address for consumers to submit their 

written requests, and that a business, 

under certain circumstances, may refuse 

to provide this material.6

5. Blocking Information Relating to 

Identity Theft in Consumers’ Files 

The Commission made one 

substantive change to the fifth section 

(‘‘If you believe information in your file 

results from identity theft, you have the 

right to ask that a consumer reporting 

agency block that information from your 

file’’). In response to an industry 

commenter, the Commission has added 

language to make clear that the block 

covers any information (not just 

accounts) in the consumer’s file, if the 

information results from identity theft. 

This same industry commenter 

suggested that the Commission expand 

the discussion of the identity theft 

report in this section. The Commission 

has added information about the 

identity theft report earlier in the 

summary in the discussion of fraud 

alerts where the term is first introduced, 

and has italicized the term ‘‘identity 

theft report’’ throughout the summary 

for readers’’ ease of reference and to 

make clear that it is a term of art. See 

supra, II.C.2. Because ‘‘identity theft 

report’’ is a complicated definition 

subject to Commission rulemaking, 

consumers are further referred to the 

FTC’s Web site for more information. 

6. Preventing Businesses From 

Furnishing Information Resulting From 

Identity Theft 

In response to business and finance 

commenters, the Commission has added 

a statement to the sixth section (‘‘You 

also may prevent businesses from 

reporting information about you to 

consumer reporting agencies if you 

believe the information is a result of 

identity theft’’) explaining that 

consumers must identify for the 

furnisher the specific information it 

should cease reporting. 

7. State Laws 

Many states have enacted laws 

relating to identity theft. In the 

Commission’s identity theft 

publications and in its public outreach 

efforts, the Commission informs 

consumers of this fact and suggests that 

consumers contact the appropriate state 

and local agencies for more information. 

Consumer group commenters suggested 

that the Commission include a 

statement in the model summary 

informing consumers that they may 

have additional rights related to identity 

theft under state law. The Commission 

agrees. Accordingly, in the penultimate 

paragraph of the summary, there is now 

the statement: ‘‘You may have 

additional rights under state law. For 

more information, contact your local 

consumer protection agency or your 

state attorney general.’’

8. Concluding Paragraphs 

In the proposed summary, the 

Commission included a final section 

cross-referencing the general FCRA 

consumer rights. The Commission 

added this section to provide identity 

theft victims notice of the broader range 

of rights provided to them by the FCRA. 

Consumer group commenters 

commended the Commission for 

including a cross-reference to general 

FCRA rights in the identity theft 

summary and for cross-referencing 

identity theft rights in the general 

summary. Industry and business 

commenters, however, suggested that 

the cross-reference to other FCRA rights 

went beyond the scope of Section 609(d) 

in discussing more rights than just those 

that address procedures for remedying 

fraud or identity theft. The Commission 

agrees with consumer group 

commenters that a cross-reference is 

necessary to ensure that consumers are 

aware of their full range of rights, and 

further believes that these more general 

rights may also be relevant to identity 

theft victims. Thus, this cross-reference 

has been retained, but in the final 

summary the discussion has been 

shortened. As proposed, the crossreference briefly enumerated five of 

consumers’ specific rights under the 

FCRA; it now reads simply: ‘‘In addition 

to the new rights and procedures to help 

consumers deal with the effects of 

identity theft, the FCRA has many other 

important consumer protections. They 

are described in more detail at http://

www.ftc.gov/credit.’’ Identity theft 

victims who need more information on 

their general rights under the FCRA will 

be able to obtain it on the Web site. 

Moreover, identity theft victims who 

receive a file disclosure from a 

consumer reporting agency—e.g., after 

placing a fraud alert or requesting a free 

file disclosure under FCRA Section 

612(c)(3)—will receive a copy of the 

general summary of consumer rights 

that describes these provisions in more 

detail. 

III. The General Summary of Consumer 

Rights 

A. Background 

Section 609(c) of the FCRA requires 

the Commission to issue a general 

summary of consumer rights. This 

provision was added to the FCRA in the 

1996 amendments. After a period for 

public comment, the Commission 

issued the general summary in 1997 as 

a two-page document. 62 FR 35586 

(1997). 

Section 211(c) of the FACT Act 

amended Section 609(c) of the FCRA to 

require the Commission to include in 

the summary information about 

consumers’ new rights. Section 211(c) 

also eliminated the requirement that the 

summary include a number of 

disclosures such as a list of federal 

agencies that enforce the FCRA, the 

statement that the consumer may have 

additional rights under state law, and 

the statement that accurate derogatory 

information does not have to be 

removed from reports unless it is 

outdated or cannot be verified. 

(Consumer reporting agencies now have 

an independent obligation to provide 

this information.) Given these changes, 

the existing general summary is 

outdated. 

Accordingly, the Commission 

published for comment a substantially 

revised general summary. The 

Commission elected to include in the 

proposed summary the list of federal 

agencies and the other items of 

information that are no longer mandated 

because it believes that this information 

is helpful to consumers and should be 

available in one place. In general, 

industry, finance, and consumer group 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69779

commenters support the Commission’s 

decision to include these items of 

information. A number of industry and 

finance commenters also state that the 

current version of the summary, which 

the Commission largely followed in 

crafting its proposed new general 

summary, has worked well. 

B. General Issues Raised by 

Commenters 

1. FACT Act Mandates 

The FACT Act requires the 

Commission and the banking and credit 

union regulators to issue rules to 

implement many of its provisions. Most 

of these rules have not yet been issued 

or will not be fully implemented until 

next year. A number of the rules will 

provide significant rights to consumers, 

such as the right to obtain a free file 

disclosure every twelve months, the 

right to receive a notice when creditors 

make decisions based on a risk-based 

pricing model, and the right to file a 

dispute directly with a business about 

information the business has furnished 

to a consumer reporting agency. The 

Commission did not include a 

discussion of these prospective rights in 

the proposed general summary. The 

proposed summary, instead, referred 

consumers to the Commission’s Web 

site for more information. 

Consumer group commenters and 

some finance commenters questioned 

the Commission’s decision not to 

include a discussion of the prospective 

rights. The Commission believes that it 

is difficult to explain these rights briefly 

and coherently, particularly since the 

rules implementing these rights are not 

yet final. Although the Commission has 

made some minor modifications to the 

general summary in response to the 

concerns raised by commenters—

including adding a reference to 

‘‘additional rights’’ at the beginning of 

the summary that refers consumers to 

the Commission’s Web site—the 

Commission has decided not to add a 

detailed discussion of the prospective 

rights but plans to revise the general 

summary to reflect these new rights 

once they are in effect. 

2. Length of Consumer Summary and 

Reference to Web Site 

In 1997, the Commission elected to 

limit the length of the general summary 

of consumer rights to two pages because 

a briefer and more pointed summary is 

more useful to, and more easily 

understood by, most consumers. In 

addition, because the two-page 

summary can be printed on a single 

sheet of standard-size paper when 

distributed in paper form, it has helped 

to control the cost of distribution. 

Where consumers need more detailed 

information about specific rights, the 

Commission has always provided 

additional resources.

The Commission took the same 

approach with the proposed revised 

general summary. A number of industry 

and finance commenters report that this 

approach has worked well. Commenters 

representing consumer groups, however, 

believe that the proposed summary is 

dense, lacks detailed information about 

some rights, and lacks extensive 

guidance as to how consumers may 

exercise their rights. These commenters 

also expressed concern that the 

reference to the Commission’s Web site 

for more information would be a 

problem for those consumers without 

ready access to the Internet. 

The Commission will mail all of its 

relevant credit-related publications to 

any consumer upon request. The 

Commission has modified the summary 

to explain how consumers without 

access to the Internet may request this 

information. In addition, the 

Commission intends to revise the 

summary once the new FACT Act 

regulations are in place, and will revisit 

the length of the consumer summary at 

that time. 

3. Understandability of the General 

Summary 

Although some commenters—

particularly business, industry, and 

finance commenters—believed that the 

format of the proposed general summary 

is useful and understandable, the 

commenters representing consumer 

groups raised questions about its 

understandability. Some of these 

concerns may be the result of the fact 

that the Federal Register did not 

publish the general summary in the 

format approved by the Commission. 

This notice contains the summary 

formatted correctly. 

Although the Commission has tried to 

use plain language and to express the 

legal concepts embodied in the FCRA as 

simply as possible, the Commission 

intends to publish on its Website an 

expanded version of the summary of 

rights that will give more information to 

consumers. To better serve Spanishspeaking consumers, the Commission’s 

Web site will also include a Spanish 

translation of the summary, along with 

other Spanish-language materials, such 

as an expanded discussion of consumer 

rights under the FCRA. A statement now 

appears in Spanish at the top of the 

summary directing consumers to the 

FTC to obtain Spanish language 

information. In addition, the 

Commission encourages those 

businesses serving Spanish-speaking 

consumers to provide the summary in 

Spanish. Accordingly, the Commission 

has added language to Appendix F of 16 

CFR part 698 stating that accurate 

translations of the general summary for 

use in providing the summary to 

consumers who use Spanish or another 

language will comply with the 

disclosure requirement. 

4. The Distribution of a ‘‘Substantially 

Similar’’ Summary 

As added to the FCRA in the 1996 

amendments, Section 609(c) required 

the Commission to ‘‘prescribe’’ the form 

and content of the general summary and 

stated that consumer reporting agencies 

were in compliance if they provided 

summaries ‘‘substantially similar’’ to the 

Commission’s model. As amended by 

the FACT Act, Section 609(c) requires 

the Commission to issue a ‘‘model’’

summary and requires consumer 

reporting agencies to distribute the 

Commission’s summary. 

Although there is no ‘‘substantially 

similar’’ language in Section 609(c) as 

amended, the Commission included in 

the Federal Register notice of July 16 a 

statement that it would consider 

‘‘substantially similar’’ summaries to be 

compliant. The Commission interprets 

the term ‘‘model’’ to mean a notice that 

need not be adhered to in every detail, 

and does not believe that consumer 

reporting agencies should be subject to 

litigation because of minor variations 

from the model. 

Consumer group commenters 

expressed concern that the inclusion of 

the ‘‘substantially similar’’ language 

may create a loophole by permitting 

consumer reporting agencies to remove 

references to specific rights or to modify 

the summary in such a way that 

important rights may be buried in fine 

print. Such changes would not be 

acceptable. All of the information in the 

general summary must be included in 

order for any summary to comply with 

the law, and consumer reporting 

agencies do not have the authority to 

eliminate or to substantially alter any 

part of the general summary. By 

specifying that general summaries must 

be issued in a form ‘‘substantially 

similar’’ to the Commission’s prescribed 

form, the Commission intends only that 

consumer reporting agencies have the 

leeway to make minor changes without 

being in violation of the FCRA. The 

Commission has added a definition of 

‘‘substantially similar’’ to 16 CFR 698.3. 

The Commission, has, however, 

decided to adopt the suggestion of an 

industry commenter that consumer 

reporting agencies be permitted to 

disclose the list of federal regulators 

69780 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

separately if they do so in a ‘‘clear and 

conspicuous’’ way. This approach may 

benefit consumers by, for example, 

permitting the general summary to be 

printed in larger type. The Commission 

has added a discussion to Appendix F 

to 16 CFR part 698 stating that the list 

of federal regulators may be disclosed 

separately. 

5. State Law Rights and Enforcement 

Another issue raised by commenters 

concerns the statement in the general 

summary that consumers may have 

additional rights under state law. 

Consumer group commenters expressed 

the belief that this statement should be 

emphasized, while a number of industry 

and finance commenters took the 

position that the rights should be 

downplayed because Section 625 of the 

FCRA preempts many state laws. 

The Commission believes that the 

additional rights that consumers have 

under state law and state enforcement of 

the FCRA are important. Section 609(c) 

specifically requires that consumers be 

informed that they have additional 

rights under state law and that they may 

wish to contact their state or local 

consumer protection agency or their 

state attorney general. Moreover, where 

state laws provide additional 

protections to consumers, these may be 

significant. The Commission has revised 

the summary by adding (before the box 

on the second page containing 

information about federal enforcement 

agencies) in bold type the following: 

‘‘States may enforce the FCRA, and 

many states have their own consumer 

reporting laws. In some cases, you may 

have more rights under state law. For 

more information, contact your state or 

local consumer protection agency or 

your state attorney general.’’

Industry and finance commenters also 

expressed the belief that the 

Commission should delete the statement 

in the proposed summary that 

consumers may sue in state court as 

well as federal court because of the fact 

that state court lawsuits may be 

transferred to the federal court system. 

The Commission has not accepted this 

suggestion. The FCRA specifically 

permits lawsuits in any court of 

competent jurisdiction, including state 

courts. 

6. Outreach and Education Efforts 

A number of consumer group and 

finance commenters raised the issue 

that a stand-alone summary of rights 

will not be particularly helpful to many 

consumers who find the legal concepts 

embodied in the FCRA difficult to 

understand, who lack basic financial 

literacy, or who find it intimidating to 

deal with consumer reporting agencies. 

The Commission recognizes that 

education and outreach efforts are 

needed to enable consumers to 

understand fully their rights under the 

FCRA. Section 513 of the FACT Act 

itself includes the Financial Literacy 

and Education Improvement Act, which 

establishes the Financial Literacy and 

Education Commission (‘‘FLEC’’). A 

Commission representative serves on 

the FLEC, and the Commission will 

work with the FLEC to educate 

consumers.

In addition, the Commission is taking 

a number of steps to educate and to help 

consumers. The Commission’s Web site 

has been reorganized so that consumers 

can easily reach credit material 

(www.ftc.gov/credit). Information on 

how to contact consumer reporting 

agencies and state agencies will be on 

the Web site, and many materials will 

be translated into Spanish. The 

Commission also intends to conduct 

outreach to educate the business 

community about the FCRA. 

C. Specific Issues Raised by 

Commenters 

A number of commenters suggested 

that the summary should be more 

technically precise, and, in response, 

the final summary uses the term ‘‘file 

disclosure’’ in place of ‘‘consumer 

report’’ when describing the right of 

consumers to see the information about 

them in the files of consumer reporting 

agencies. In addition, the introductory 

paragraph to the summary has been 

modified to incorporate the suggestion 

that the summary refer to ‘‘specialty’’

agencies instead of ‘‘specialized’’

agencies and to explain more fully what 

specialty agencies are. 

In response to the issues raised by 

consumer group commenters, there is 

now a statement in Spanish at the very 

top of the summary directing Spanishspeaking consumers to a Spanish 

version of the summary. In addition, 

because the model does not summarize 

every right afforded to consumers by the 

FCRA, the revised summary states that 

consumers’ ‘‘major rights’’ are contained 

in the summary and that ‘‘additional 

rights’’ are available on the Web site or 

by writing to the Commission. Finally, 

the sentence in the introductory 

paragraph stating that consumers may 

have additional rights under state law 

has been moved to the end of the 

summary where there is now a more 

detailed discussion of state 

enforcement. 

In the first substantive paragraph 

(‘‘You must be told if information in 

your file has been used against you’’), 

the reference to ‘‘consumer reporting 

agency’’ has been modified to more fully 

explain that credit reports or other 

consumer reports may be the basis for 

adverse actions. 

The heading of the second paragraph 

(‘‘You have the right to know what is in 

your file’’) has been modified to aid in 

comprehension. In addition, a number 

of commenters felt that the language of 

this paragraph was too imprecise. It has 

been modified to express precisely the 

circumstances in which a consumer 

may obtain a disclosure of the 

information in his or her file, and the 

various rights to free file disclosures are 

now expressed as separate bulleted 

paragraphs. The discussion of free file 

disclosures was modified to state that 

file disclosures under the Commission’s 

Free Annual File Disclosures Rule, 16 

CFR part 610, will not be available for 

all consumers until September of 2005. 

The heading and text of the third 

paragraph (‘‘You have the right to ask 

for a credit score’’) have also been 

modified to be more precise. Business, 

industry, and finance commenters did 

not like the use of the term ‘‘your credit 

score’’ given the fact that consumers are 

entitled under Section 609(f) of the 

FCRA only to an educational score, 

which may not be the same as the score 

provided to any particular creditor or 

other user. The Commission also 

modified the last sentence to make clear 

that mortgage lenders (and not 

consumer reporting agencies) will give 

consumers credit score information in 

some circumstances. 

The fourth paragraph (‘‘You have the 

right to dispute incomplete or 

inaccurate information’’) has been 

expanded to make clear that consumers 

may dispute both ‘‘incomplete’’ and 

‘‘inaccurate’’ information, and the 

heading has been revised to aid in 

comprehension. The fifth paragraph 

(‘‘Consumer reporting agencies must 

correct or delete inaccurate, incomplete, 

or unverifiable information’’) has been 

similarly modified. One industry 

commenter, the Consumer Data Industry 

Association, suggested adding to this 

paragraph a discussion of the fact that 

information removed because it cannot 

be verified may be reinserted if the 

furnisher certifies to the consumer 

reporting agency that the information is 

correct. Because of its interest in 

keeping the general summary to two 

pages, the Commission has decided not 

to add this reinsertion information to 

the general summary at this time, but 

this will be discussed on the 

Commission’s Web site. 

The headings of the sixth (‘‘Consumer 

reporting agencies may not report 

outdated negative information’’) and 

seventh (‘‘Access to your file is 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69781

7The Commission has added a definition of 

‘‘substantially similar’’ to 16 CFR 698.3.

limited’’) paragraphs have been 

modified to enhance readability, but no 

substantive changes have been made. 

An industry commenter suggested that 

the Commission include in the 

discussion of access in the seventh 

paragraph a statement that consumers’

rights are limited in certain employee 

misconduct investigations. Because the 

exemption in Section 603(x) is narrow 

and will affect consumers only in 

limited circumstances, the Commission 

has determined that it will not address 

this matter in the general summary, but 

will make that exception clear in its 

general consumer education efforts. 

The heading of the eighth paragraph 

(‘‘You must give your consent for 

reports to be provided to employers’’) 

has been revised, and the paragraph 

now makes clear that consent is to be 

given to the employer. A statement has 

been added at the end of this paragraph 

pointing out the exception to the 

requirement for ‘‘written’’ permission 

that applies to the trucking industry. In 

addition, the reference to ‘‘blanket’’

permission has been removed, because 

the Commission believes that this is a 

complicated concept to explain to 

consumers in a concise manner. 

Additional information is available in 

the Commission’s consumer education 

publications, and the issue continues to 

be discussed in the notice of user duties. 

The heading of the ninth paragraph 

(‘‘You may limit ‘prescreened’ offers of 

credit and insurance you get based on 

information in your credit report’’) has 

been modified to improve readability, 

and the paragraph now makes clear that 

the opt-out number in the paragraph is 

only for ‘‘nationwide’’ agencies. The 

tenth paragraph (‘‘You may seek 

damages from violators’’) also has been 

modified. A number of finance and 

industry commenters objected to the 

Commission’s proposed language 

because furnishers and users have 

limited liability to consumers under the 

FCRA. The Commission has adopted 

wording proposed by commenter 

American Banking Association: ‘‘If a 

consumer reporting agency, or, in some 

cases, a user of consumer reports or 

furnisher of information to a consumer 

reporting agency violates the FCRA, you 

may be able to sue in state or federal 

court.’’ The Commission believes that 

this accurately reflects the statute. As 

discussed above, the Commission has 

not adopted the suggestion of a number 

of industry and finance commenters that 

the reference in this paragraph to 

lawsuits in state courts be eliminated. 

The discussion of identity theft and 

active duty military rights in what is 

now the eleventh paragraph has been 

shortened to save space. Consumers are 

referred to the Commission’s Web site 

for more information. Finally, at the 

bottom of the second page of the 

summary, the Commission has made 

significant changes. In response to 

consumer group commenters who 

expressed concern that the proposed 

summary did not adequately alert 

consumers to rights that they have 

under state laws, the Commission 

moved the statement concerning state 

law rights from the introductory 

paragraph to this location, added a 

reference to the fact that states may 

enforce the FCRA, and now directs 

consumers to contact their state attorney 

general or regulator as well as the 

appropriate federal regulator if they 

believe law violations have occurred. 

IV. Furnisher and User Notices 

A. Background 

Section 607(d)(1) of the FCRA, which 

was added in the 1996 amendments to 

the FCRA, requires consumer reporting 

agencies to distribute to each person 

that regularly furnishes information to 

the agency or that receives information 

from the agency a notice of the person’s 

responsibilities under the FCRA. The 

statute requires the Commission to 

‘‘prescribe’’ the content of model notices 

that can be used to comply with Section 

607(d)(1). In 1997, the Commission 

issued both the notice explaining the 

duties of persons furnishing information 

to consumer reporting agencies 

(‘‘furnisher notice’’) and the notice 

explaining the duties of persons using 

information obtained from consumer 

reporting agencies (‘‘user notice’’). 62 

FR 35586 (1997). 

The FACT Act did not amend Section 

607(d), but it did alter in significant 

ways the duties of furnishers and users. 

As a result, the Commission published 

revised furnisher and user notices for 

comment in the Federal Register on July 

16. 69 FR 42616 (2004). The comments 

received by the Commission raised a 

number of major issues that are 

discussed below. 

B. General Issues Raised by Commenters 

1. Distribution of Furnisher and User 

Notices 

The July 16 Federal Register notice 

set forth the Commission’s initial 

position that the revisions to the FCRA 

by the FACT Act are so significant that 

consumer reporting agencies must 

distribute new furnisher and user 

notices. An industry commenter and 

some finance commenters objected to 

this position, primarily citing the cost of 

providing revised notices.

Consumer reporting agencies are 

required under Section 607(d) to 

provide to furnishers and users a 

complete description of their duties 

under the FCRA. Section 607(d)(2) 

provides that they may comply with this 

obligation by providing furnishers and 

users with a notice ‘‘substantially 

similar’’ to the model prescribed by the 

Commission.7 That is, the Commission’s 

notices are a ‘‘safe harbor.’’ The 

Commission is now substantially 

changing its model notices, and it 

believes that consumer reporting 

agencies wishing to avail themselves of 

the statute’s safe harbor should provide 

the revised notices to users and 

furnishers.

The FCRA, as amended by the FACT 

Act, contains substantial new 

obligations that have not yet been 

implemented by rules of the 

Commission and other agencies. As a 

result, the Commission intends to revise 

the model notices again when the 

relevant rulemaking proceedings are 

complete. Until that time, the 

Commission believes that consumer 

reporting agencies may take advantage 

of the Section 607(d)(2) safe harbor by 

delivering the revised ‘‘interim’’ notices 

only to those new users and furnishers 

who have never before received the 

notices. Of course, all furnishers and 

users must comply with every new duty 

as it becomes effective, without regard 

to whether they have been notified of 

the duty by a consumer reporting 

agency. 

2. Information on Rules That Are Not 

Yet Complete 

At the suggestion of business, finance, 

and industry commenters, the 

Commission has added a box at the top 

of both notices that alerts users and 

furnishers to the fact that some of the 

regulations required by the FACT Act 

and discussed in the notice were not 

issued when the notice was prescribed. 

Recipients of the notices are directed to 

the Commission’s Web site, where the 

Commission maintains updated 

information about the status of the 

regulations. Furnishers and users 

regulated by other entities are directed 

to contact those entities for information 

about any relevant regulations 

implementing the FACT Act. 

3. Additional Resources 

At the suggestion of an industry 

commenter and for the convenience of 

users and furnishers, the Commission 

has added to both notices (1) a list of the 

United States Code citations that 

correspond to the FCRA sections 

discussed in the notice, and (2) a 

69782 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

reference to the Commission’s Web site 

for more information about the FCRA, 

including publications for businesses. 

B. Specific Issues Raised by 

Commenters 

The Commission has made a number 

of other additions and revisions to the 

furnisher and user notices to reflect 

suggestions made by commenters. The 

following discussion describes the 

significant changes made to the 

proposed notices. 

1. Furnisher Notice 

A number of business, finance, and 

industry commenters suggested that the 

Commission revise the introductory 

paragraph of the furnisher notice to 

identify the specific states (California 

and Massachusetts) whose ‘‘furnisher’’

laws are not preempted by the FCRA. 

The Commission has not made this 

change because the preemption 

provision is unchanged since 1997 and 

the language in the introductory 

paragraph has not caused confusion. 

In the fourth section (‘‘Duties After 

Notice of Dispute from Consumer’’), the 

Commission, at the suggestion of several 

industry and finance commenters, has 

added a discussion of Section 

623(a)(1)(B), which describes the 

general ‘‘accuracy’’ duties that 

furnishers have when consumers notify 

them of inaccurate information. ACA 

International, a major association of 

debt collectors, requested in its 

comments that the Commission include 

a statement that contacts with 

consumers by debt collectors 

undertaken in compliance with Section 

623(a)(8) (the provision governing 

consumer disputes made directly to 

information furnishers) are not 

communications or attempts to collect 

debts under the Fair Debt Collection 

Practices Act, 15 U.S.C. 1601 et seq.

ACA International is concerned that 

debt collectors may not be registered to 

do business in states where consumers 

who dispute information are located, 

and that the contacts involved in 

handling these disputes will trigger state 

debt collection laws. Because 

furnishers’ new obligations to accept 

consumer disputes are dependent on 

rules that have not yet been drafted, it 

would be premature to address this 

issue. 

The fifth section (‘‘Duties After Notice 

of Dispute From Consumer Reporting 

Agency’’) has been slightly modified to 

reflect the statutorily mandated 

timeline. The seventh section (‘‘Duty to 

Report Dates of Delinquencies’’), which 

previously referred to ‘‘debt collectors,’’

now makes clear that ‘‘any person’’ who 

acquires or is collecting a delinquent 

debt must comply with the reporting 

requirements of Section 623(a)(5). This 

section also has been revised to more 

closely track the statutory language. 

The eighth section (‘‘Duties of 

Financial Institutions When Reporting 

Negative Information’’) has been revised 

to make clear that the provision only 

applies to persons that furnish 

information to ‘‘nationwide’’ consumer 

reporting agencies as defined in Section 

603(p). The reference to the Federal 

Reserve Board regulations has been 

revised to reflect the fact that the Board 

has issued two model disclosures.

The Commission has revised the tenth 

section (‘‘Duties When ID Theft 

Occurs’’) to include a discussion of 

Section 623(a)(2), which requires each 

furnisher to notify all agencies to which 

it reports when it learns it has furnished 

inaccurate information. At the 

suggestion of a number of finance and 

industry commenters, the last sentence 

in this paragraph also has been modified 

to make clear that the prohibition upon 

selling debts that are linked to identity 

theft does not apply in certain limited 

circumstances involving repurchase, 

securitization, and transfers as the result 

of corporate mergers, acquisitions, or 

asset sales. 

2. User Notice 

The introductory paragraphs of the 

user notice have been slightly modified 

by adding, at the suggestion of an 

industry commenter, a statement 

directing readers to the end of the notice 

where there is now a list of the sections 

of the FCRA with parallel citations to 

the United States Code. Readers are also 

referred to the Commission’s Web site, 

where the full text of the FCRA is 

available. 

A number of finance commenters 

suggested that the statement in the third 

bullet of Part I.A. (‘‘Users Must Have a 

Permissible Purpose’’), discussing the 

credit permissible purpose in FCRA 

Section 604(a)(3)(A), should be 

broadened to include any credit 

transaction ‘‘involving’’ a consumer. 

The Commission believes that the only 

situations where consumer reports may 

be obtained under this subsection occur 

when consumers apply for credit, or 

where a creditor obtains consumer 

reports for the review or collection of 

consumers’ accounts. Accordingly, the 

Commission has not changed this 

section of the notice. 

A significant change has been made in 

the introductory paragraph of Part I.C. 

(‘‘Users Must Notify Consumers When 

Adverse Actions Are Taken’’). A 

number of business and finance 

commenters expressed concerns that the 

Commission’s description of adverse 

actions did not adequately explain that 

no adverse action occurs in a credit 

transaction when a user makes a 

counteroffer that is accepted by the 

consumer. The Commission has 

shortened the explanatory text as a 

result of these comments, has added ‘‘as 

defined by Section 603(k) of the FCRA’’

in the second sentence, and has added 

a statement that no adverse action 

occurs for the purposes of the FCRA 

where a creditor makes, and the 

consumer accepts, a counteroffer. 

Similar changes were made in the first 

sentence of Part I.C.1. 

The discussion in Part I.C.3. 

(‘‘Adverse Actions Based on Information 

Obtained From Affiliates’’) also has 

been modified. At the suggestion of 

industry and finance commenters, who 

found the discussion confusing, the 

Commission has eliminated the portion 

of the parenthetical discussion at the 

end of the paragraph that discussed the 

sharing of non-consumer report 

information among affiliates. This issue 

is discussed in more detail on the 

Commission’s Web site. 

The discussion in Part I.D. (‘‘Users 

Have Obligations When Fraud and 

Active Duty Military Alerts are in 

Files’’) has been slightly modified to 

emphasize that the limitations imposed 

on users apply only in certain 

circumstances. Part I.E. (‘‘Users Have 

Obligations When Notified of an 

Address Discrepancy’’), discussing 

duties where the user has an address 

that differs from the address(es) in the 

information obtained from the consumer 

reporting agency, has been expanded to 

make clear that these duties apply only 

to users who receive address 

discrepancy notices from nationwide 

consumer reporting agencies. 

The proposed notice included in Part 

II a description of the requirement in 

Section 615(h) that users who are 

creditors must provide a notice to 

consumers when risk-based pricing 

systems are used. This statement 

generated a considerable response from 

business, industry, and finance 

commenters. There is no obligation 

under Section 615(h) until it is 

implemented by a joint rule of the 

Federal Reserve Board and the 

Commission. The Commission has 

revised this section to include a simple 

recitation of the statutory language, and 

will defer consideration of how best to 

describe this new obligation until the 

joint rule is complete. 

Finally, some minor changes have 

been made in Parts III.A. (‘‘Employment 

Other Than in the Trucking Industry’’) 

and VI (‘‘Obligations of Users of Medical 

Information’’) in response to industry 

and finance commenters. The 

Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 69783

discussion of user duties in employment 

situations in Part III.A. has been 

expanded to make clear that consumers 

may give blanket authorization to 

employers for consumer reports to be 

obtained during the term of 

employment. And the discussion in Part 

VI of the obligations of users of medical 

information has been revised slightly to 

specify that regulations issued by the 

banking and credit union regulators will 

affect the use of medical data. 

V. Repeal of Existing Summaries and 

Notices 

The existing model Summary of 

Consumer Rights, Notice of Furnisher 

Duties, and Notice of User Duties are 

codified at 16 CFR part 601. The 

Commission is reorganizing Subchapter 

F of Title 16 of the Code of Federal 

Regulations to reflect its substantial new 

rulemaking and other responsibilities 

under the FACT Act and FCRA. As a 

part of this general organizational 

scheme the Commission plans to codify 

all guidance on model forms and 

disclosures, including the model 

Summaries of Rights and Notices of 

Duties, at 16 CFR part 698. Accordingly, 

it is repealing the existing notices at 16 

CFR part 601, but is reserving that Part 

for future use. The new and revised 

model Summaries of Rights and Notices 

of Duties will be codified at 16 CFR part 

698, Appendices E, F, G, and H.

VI. Effective Date 

The Commission is setting an 

effective date for the model summaries 

and notices of sixty days after 

publication in the Federal Register. The 

consumer reporting agencies may, of 

course, begin using the model 

summaries and notices earlier than that, 

but the Commission expects that it will 

take a certain amount of time for the 

consumer reporting agencies to have 

their summaries and notices printed and 

ready for distribution. In addition, the 

FACT Act specifically states that the 

consumer reporting agencies have sixty 

days after the model summary for 

identity theft rights is prescribed in final 

form to begin distributing such a 

summary. Consequently, for ease of 

administration and convenience, the 

Commission is establishing one, 

uniform effective date for all of the 

summaries and notices. 

VII. Final Regulatory Flexibility Act 

Analysis 

The Regulatory Flexibility Act 

(‘‘RFA’’), 5 U.S.C. 601–612, requires that 

the Commission provide an Initial 

Regulatory Flexibility Analysis 

(‘‘IRFA’’) with any action that may 

constitute a rule and a final Regulatory 

Flexibility Analysis (‘‘FRFA’’) with the 

final action, unless the Commission 

certifies that its action will not have a 

significant economic impact on a 

substantial number of small entities 

(i.e., those with less than $6,000,000 in 

average annual receipts). 5 U.S.C. 603–

605. The Commission stated in its IRFA 

that it had concluded that this matter 

will not have a significant economic 

impact on a substantial number of small 

entities. The Commission, however, did 

request public comment on this issue. 

As discussed below, only one comment 

specifically addressed the RFA. The 

Commission hereby certifies that this 

matter will not have a significant 

economic impact on a substantial 

number of small entities. 

A. Need for and Objectives of 

Proceeding 

The Fair and Accurate Credit 

Transactions Act of 2003, Public Law 

108–159, 117 Stat. 1952, substantially 

amended the FCRA. The FACT Act 

added Section 609(d) of the FCRA, 

which requires the Commission to 

prescribe a summary of the rights that 

identity theft victims have under the 

FCRA. The FACT Act also amended 

Section 609(c), which was added in the 

1996 amendments to the FCRA and 

which requires the Commission to 

prescribe a general summary of 

consumer rights under the FCRA. 

Finally, the FACT Act extensively 

amended many other provisions of the 

FCRA. As a result, the notices of user 

and furnisher duties that the 

Commission is required to prescribe by 

Section 607(d) of the FCRA are 

outdated. The Commission is now 

prescribing all four of these documents 

in accordance with the requirements of 

the FCRA as amended by the FACT Act. 

B. Significant Issues Raised by Public 

Comment 

The Commission received only one 

comment specifically focused on the 

IRFA published by the Commission on 

July 16. This came from industry 

commenter Consumer Data Industry 

Association (CDIA). In its proposal the 

Commission stated that it believed that 

the FACT Act’s amendments to the 

FCRA were significant enough to 

require that revised furnisher and user 

notices be distributed by consumer 

reporting agencies to all persons that 

furnish information to them and that 

obtain information from them. CDIA 

stated that it would be burdensome for 

consumer reporting agencies to have to 

distribute revised notices to furnishers 

and users that had already received the 

Commission’s 1997 versions of these 

documents. CDIA, however, did not 

provide any information on the number 

of small entities that would be affected 

or the costs imposed upon these 

entities. A number of other commenters, 

while not directing their comments to 

the Commission’s IRFA, also questioned 

whether consumer reporting agencies 

should have to distribute revised 

furnisher and user notices. As discussed 

above, the Commission believes that 

consumer reporting agencies need 

deliver these ‘‘interim’’ revised user and 

furnisher notices only to new users and 

furnishers. Existing users and furnishers 

can be provided new notices when the 

Commission makes final revisions to the 

notices, following completion of the 

FACT Act rulemaking proceedings. 

C. Small Entities to Which the Rule Will 

Apply 

The proposed summaries and notices 

are to be distributed by consumer 

reporting agencies. The definition of a 

‘‘small’’ consumer reporting agency is 

currently one with less than $6 million 

in average annual receipts (see http://

www.sba.gov/size). The consumer 

reporting industry is primarily 

composed of large national consumer 

reporting agencies, including the socalled ‘‘nationwide’’ consumer reporting 

agencies and ‘‘nationwide specialty’’

consumer reporting agencies, as defined 

in FCRA Sections 603(p) and 603(w), 

respectively. The Commission believes 

that none of these nationwide agencies 

are ‘‘small’’ entities. There are, however, 

small consumer reporting agencies 

associated with the nationwide 

consumer reporting agencies, and there 

are small independent consumer 

reporting agencies. Based on the 

membership of the major consumer 

reporting agency trade associations, the 

Commission believes that the total 

universe of entities potentially covered 

by the requirement to distribute 

summaries and notices is between 1000 

and 1400. As discussed below, the 

Commission believes that the large 

nationwide entities will be responsible 

for much of the distribution of the 

summaries and notices. The 

Commission received no comments on 

the number of small entities that will be 

affected.

D. Projected Reporting, Recordkeeping, 

and Other Compliance Requirements 

The Commission’s proposal will 

impose no specific reporting or 

recordkeeping requirements. Consumer 

reporting agencies are required by 

statute, however, to distribute the 

prescribed summaries and notices. The 

summary of identity theft rights (Section 

609(d)) will be distributed to all 

consumers who contact the agencies to 

69784 Federal Register / Vol. 69, No. 229 / Tuesday, November 30, 2004 / Rules and Regulations 

report that they may be the victim of 

fraud or identity theft. The general 

summary of consumer rights (Section 

609(c)) will be distributed with each 

written file disclosure made by the 

agencies. Both of these summaries will 

be distributed to large numbers of 

consumers each year. By contrast, the 

notices of user and furnisher duties 

(Section 607(d)) need be distributed 

only on a one-time basis to all of the 

entities that furnish information to a 

consumer reporting agency or use 

information obtained from an agency. 

The Commission does not believe that 

the requirements mandated by the 

FACT Act and discussed in detail in the 

IRFA analysis will increase in any 

significant way the burdens already 

imposed by the FCRA on consumer 

reporting agencies. Because the 

Commission is providing the language 

for the summaries and notices, 

businesses need not incur legal or other 

professional costs to develop any 

written material. The cost of training 

employees, if any, should be minimal. 

When the document is distributed 

electronically, the Commission believes 

that the distribution costs will be 

negligible. The Commission believes 

that the major burden of providing the 

new summary of identity theft rights 

will fall upon the nationwide consumer 

reporting agencies that are not small 

entities. The Commission received no 

comments on this issue. 

E. Duplicative, Overlapping, or 

Conflicting Federal Rules 

The Commission has not identified 

any other federal statutes, rules, or 

policies that would duplicate, overlap, 

or conflict with the proposed notices. 

The Commission received no comments 

on this issue. 

F. Steps Taken To Minimize Significant 

Economic Impact on Small Entities 

The Commission invited comment on 

suggested alternative methods of 

compliance. While no commenter 

specifically addressed this issue, a 

number of industry and finance 

commenters expressed concerns that it 

would be burdensome to redistribute 

the furnisher and user notices. As 

discussed above, the Commission 

believes that consumer reporting 

agencies need deliver these ‘‘interim’’

revised user and furnisher notices only 

to new users and furnishers. Existing 

users and furnishers can be provided 

new notices when the Commission 

makes final revisions to the notices, 

following completion of the FACT Act 

rulemaking proceedings. 

VIII. Paperwork Reduction Act 

In its initial review of the proposed 

summaries and notices, the Commission 

considered whether it was ‘‘sponsoring 

or conducting’’ any ‘‘collection[s] of 

information’’ that would trigger the 

provisions of the Paperwork Reduction 

Act, 44 U.S.C. Chapter 35. The 

Commission concluded that it was not 

and that the proposed summaries and 

notices fell within the exception to the 

definition of a ‘‘collection of 

information’’ as ‘‘[t]he public disclosure 

of information originally supplied by 

the Federal government to the recipient 

for the purpose of disclosure to the 

public.’’ 5 CFR 1320.3(x)(2). 

Nonetheless, the Commission requested 

public comment on this matter. No 

comments were received. Accordingly, 

the Commission has determined that its 

actions in this matter will not implicate 

the Paperwork Reduction Act.

IX. Final Guidance on Model 

Disclosures

List of Subjects in 16 CFR Parts 601 and 

698 

Fair Credit Reporting Act, Consumer 

reports, Consumer reporting agencies, 

Credit, Trade practices.

■ Accordingly, for the reasons set forth 

above, the FTC amends title 16, Code of 

Federal Regulations, as follows:

PART 601—[REMOVED AND 

RESERVED]

■ 1. Part 601 is removed and reserved.

■ 2. Revise the heading of part 698 to 

read as follows:

PART 698—MODEL FORMS AND 

DISCLOSURES

■ 3. The authority for Part 698 is revised 

to read as follows:

Authority: 15 U.S.C. 1681e, 1681g, 1681j, 

1681m, and 1681s; section 211(d), Pub. L. 

108–159, 117 Stat. 1952.

■ 4. Revise §§ 698.1 and 698.2 to read as 

follows:

§ 698.1 Authority and purpose. 

(a) Authority. This part is issued by 

the Commission pursuant to the 

provisions of the Fair Credit Reporting 

Act (15 U.S.C. 1681 et seq.), as amended 

by the Consumer Credit Reporting 

Reform Act of 1996 (Title II, Subtitle D, 

Chapter 1, of the Omnibus Consolidated 

Appropriations Act for Fiscal Year 

1997), Public Law 104–208, 110 Stat. 

3009–426 (Sept. 30, 1996), and the Fair 

and Accurate Credit Transactions Act of 

2003, Public Law 108–159, 117 Stat. 

1952 (Dec. 4, 2003). 

(b) Purpose. The purpose of this part 

is to comply with sections 607(d), 

609(c), 609(d), and 612(a) of the Fair 

Credit Reporting Act, as amended by the 

Fair and Accurate Credit Transactions 

Act of 2003, and Section 211 of the Fair 

and Accurate Credit Transactions Act of 

2003.

§ 698.2 Legal effect. 

These model forms and disclosures 

prescribed by the FTC do not constitute 

a trade regulation rule. The issuance of 

the model forms and disclosures set 

forth below carries out the directive in 

the statute that the FTC prescribe these 

forms and disclosures. Use or 

distribution of these model forms and 

disclosures will constitute compliance 

with any section or subsection of the 

FCRA requiring that such forms and 

disclosures be used by or supplied to 

any person.

■ 5. Add new § 698.3 to read as follows:

§ 698.3 Definitions. 

As used in this part, unless otherwise 

provided: 

(a) Substantially similar means that 

all information in the Commission’s 

prescribed model is included in the 

document that is distributed, and that 

the document distributed is formatted in 

a way consistent with the format 

prescribed by the Commission. The 

document that is distributed shall not 

include anything that interferes with, 

detracts from, or otherwise undermines 

the information contained in the 

Commission’s prescribed model.

■ 6. Amend part 698 to add a new 

Appendix E as follows:

Appendix E to Part 698—Summary of 

Consumer Identity Theft Rights 

The prescribed form for this summary is a 

disclosure that is substantially similar to the 

Commission’s model summary with all 

information clearly and prominently 

displayed. A summary should accurately 

reflect changes to those items that may 

change over time (such as telephone 

numbers) to remain in compliance. 

Translations of this summary will be in 

compliance with the Commission’s 

prescribed model, provided that the 

translation is accurate and that it is provided 

in a language used by the recipient 

consumer.

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■ 7. Amend part 698 to add a new 

Appendix F as follows:

Appendix F to Part 698—General 

Summary of Consumer Rights 

The prescribed form for this summary is a 

disclosure that is substantially similar to the 

Commission’s model summary with all 

information clearly and prominently 

displayed. The list of federal regulators that 

is included in the Commission’s prescribed 

summary may be provided separately so long 

as this is done in a clear and conspicuous 

way. A summary should accurately reflect 

changes to those items that may change over 

time (e.g., dollar amounts, or telephone 

numbers and addresses of federal agencies) to 

remain in compliance. Translations of this 

summary will be in compliance with the 

Commission’s prescribed model, provided 

that the translation is accurate and that it is 

provided in a language used by the recipient 

consumer. 

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■ 8. Amend Part 698 to add a new 

Appendix G as follows:

Appendix G to Part 698—Notice of 

Furnisher Responsibilities 

The prescribed form for this disclosure is 

a separate document that is substantially 

similar to the Commission’s model notice 

with all information clearly and prominently 

displayed. Consumer reporting agencies may 

limit the disclosure to only those items that 

they know are relevant to the furnisher that 

will receive the notice.

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■ 9. Amend Part 698 to add a new 

Appendix H as follows:

Appendix H to Part 698—Notice of User 

Responsibilities 

The prescribed form for this disclosure is 

a separate document that is substantially 

similar to the Commission’s notice with all 

information clearly and prominently 

displayed. Consumer reporting agencies may 

limit the disclosure to only those items that 

they know are relevant to the user that will 

receive the notice.

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By direction of the Commission. 

Donald S. Clark, 

Secretary.

[FR Doc. 04–26240 Filed 11–29–04; 8:45 am] 

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