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Report to Congress

Under Sections 318 and 319 of 

the Fair and Accurate Credit 

Transactions Act of 2003 

Federal Trade Commission

December 2004

Federal Trade Commission

Report to Congress

Under Sections 318 and 319 of

the Fair and Accurate Credit

Transactions Act of 2003 

December 2004

Federal Trade Commission

Deborah Platt Majoras, Chairman

Orson Swindle, Commissioner

Thomas B. Leary, Commissioner

Pamela Jones Harbour, Commissioner

Jon Leibowitz, Commissioner
Federal Trade Commission
Federal Trade Commission

Contents

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .i

I. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

II. The Information Gathering Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

III. Accuracy And Completeness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

B. The Credit Reporting System in the United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

C. Challenges in Assuring Accuracy and Completeness . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

D. The Accuracy and Completeness Requirements of the FCRA . . . . . . . . . . . . . . . . . . . . . 16

E. FTC Efforts to Promote Compliance with the FCRA Accuracy Requirements . . . . . . . 18

F. Prior Studies of Accuracy and Completeness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

G. FTC Proposed Pilot Study and Nationwide Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

IV. Data Matching . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35

B. CRA Databases and the Matching Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

C. Benefits and Costs of the Proposed Matching Requirements . . . . . . . . . . . . . . . . . . . . . . 46

D. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53

V. Same Credit Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55

B. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56

C. Benefits and Costs of a “Same Report” Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60

D. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

VI. Negative Information Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67

B. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69

C. The Benefits and Costs of Negative Information Notices . . . . . . . . . . . . . . . . . . . . . . . . 73

D. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

VII. Common Unreported Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

A. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77

B Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78

C. Possible Approaches to Increase Reporting of Non-Traditional Credit Data . . . . . . . . . . 82

D. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

VIII. Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85

Appendix A: Roundtable Federal Register Notice

Appendix B: Pilot Study Federal Register Notice

Appendix C: “Same Report” Federal Register Notice
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Executive Summary

The Federal Trade Commission (“FTC” or “Commission”) submits this report pursuant to 

Sections 318 and 319 of the Fair and Accurate Credit Transactions Act of 2003, Pub. L. 108-159, 

117 Stat. 1952 (“FACT Act”). The FACT Act, which was enacted on December 4, 2003, amends 

the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (“FCRA”), and contains, among other 

things, a number of provisions designed to enhance the accuracy and completeness of credit 

reports. Among these provisions are Sections 318 and 319, which require the Commission to 

conduct five studies regarding credit report accuracy and completeness. 

The accuracy and completeness of credit report data is of paramount importance to 

consumers. Credit reports are used by creditors and others to make critical decisions about 

the availability and costs of various products and services, including credit, insurance, and 

employment. The reports enable creditors to make fast and accurate decisions in providing these 

products and services, which benefits both creditors and consumers. At the same time, any errors 

in the data contained in these reports can cause consumers to lose these benefits or pay higher 

costs for them. 

Since the emergence of the credit reporting industry nearly a century ago, creditors and 

others have furnished data to the consumer reporting agencies (“CRAs”) on a voluntary basis. In 

1970, Congress passed the FCRA, which provided significant consumer protections to, among 

other things, assure the accuracy of the data in credit reports. The FCRA’s protections include 

mechanisms for consumers to learn about possible errors in their credit reports and have them 

corrected, and a requirement that the CRAs that collect this data follow “reasonable procedures 

to assure maximum possible accuracy of the information” they report. Amendments in 1996 

strengthened these protections by, among other things, placing certain legal obligations on 

creditors and other furnishers of data to the CRAs with respect to the accuracy of the information 

they provide. In 2003, the FACT Act further enhanced the FCRA by adding new requirements 

related to accuracy and completeness. These requirements include measures to strengthen the 

dispute and reinvestigation process, a new consumer right to obtain a free annual file disclosure, 

new requirements on those who furnish information to the CRAs, and measures designed to 

reduce identity theft (the unauthorized procurement and use of another’s personal information for 

fraudulent purposes). 

In addition to imposing new substantive protections, the FACT Act also directs the 

Commission to study and report to Congress on various issues related to credit report accuracy 

and completeness. Specifically, Section 319 requires an ongoing study of credit report 

accuracy and completeness, with a final report due to Congress in 2014. (See “Accuracy and 

Completeness,” below.) During the ongoing study, the Commission must submit five interim 

reports to Congress every two years beginning in December 2004. Part III of this report is the 

Commission’s first interim report to Congress.
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Section 318 directs the Commission to study and report to Congress on the benefits and 

costs of various specific proposals for improving credit report accuracy and completeness. 

Specifically, the studies must examine:

• the effects of requiring the CRAs to match more points of identifying information (e.g., 

name, social security number, address) to ensure that a consumer is the correct individual to 

whom a credit report relates (See “Data Matching Proposal,” below); 

• the effects of requiring that a consumer who has experienced an “adverse action” (for 

example, the denial of credit) based on a credit report receives a copy of the same report 

that the creditor relied on in taking the adverse action (See “Same Report Proposal,” below); 

• the effects of requiring notification to consumers when negative information has been added 

to their credit reports (See “Negative Information Notice Proposal,” below); and 

• whether there are any common financial transactions that are not generally reported to the 

CRAs, but that would provide useful information in determining creditworthiness, and what 

actions might be taken to encourage greater reporting of these transactions. (See “Common 

Unreported Transactions,” below.)

Parts IV, V, VI, and VII of this report comprise the Commission’s Report to Congress under 

Section 318. 

Over the past year, the FTC has used a variety of means to obtain information for these 

studies. Among other things, FTC staff interviewed consumer advocacy groups, the CRAs, 

resellers of credit reports, furnishers and users of credit report information, and numerous 

other knowledgeable sources. The staff also issued Federal Register Notices seeking relevant 

information and convened a roundtable meeting of experts to discuss issues related to designing 

the ongoing Section 319 study. For all of the studies, the FTC focused primarily on the activities 

of the three nationwide credit bureaus, which comprise the vast majority of the credit reporting 

industry. The studies also focused on the use of credit reports in credit transactions, which is the 

chief concern of the Section 318 proposals. 

Accuracy and Completeness Study

In its ongoing accuracy and completeness study, the FTC has thus far (1) examined the 

history and current practices of the credit reporting industry; (2) identified the key areas where 

errors in credit report data could occur; (3) reviewed and evaluated the studies conducted to date 

on credit report accuracy and completeness; (4) examined possible methodologies for conducting 

a more reliable and comprehensive study, focusing in particular on the possibility of conducting a 

national consumer survey; and (5) proposed to conduct a pilot study to determine the feasibility 

of such a national consumer survey. 

As described in the report, there are a number of potential sources of inaccuracy and 

incompleteness in credit reports. These include the following:

• First, a creditor or other furnisher of data to the CRAs may provide information that is 

incorrect, may provide incomplete information, or may not provide information at all. 
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• Second, there may be problems with assigning data to the proper consumer’s file, perhaps 

because the identifying information accompanying the data is incomplete or wrong. In 

such cases, the data might be assigned to the wrong file – thus creating a “mixed file” that 

includes data from more than one consumer. Alternatively, the CRA might mistakenly 

create a new file for a consumer that already has a file in the CRA’s system – thus creating a 

“fragmented file.” 

• Third, there may be problems when the CRA retrieves a consumer’s file in response to an 

inquiry from a user of credit reports. For example, a CRA might send the wrong report, 

might send multiple reports (one or more of which pertain to the right person), or might 

send no report at all for a consumer with a file in the system. 

In addition, there is a trade-off between accuracy and completeness. For example, when a 

CRA receives data from a furnisher, the information identifying the consumer may be inaccurate 

or incomplete. In such cases, the CRA must choose between adding information to an existing 

file or creating a new file. If the CRA adds information to an existing file, and the information 

in fact belongs to a different consumer, the CRA has created a “mixed file,” which is a source of 

inaccuracy. Further, if the added information is negative, it can lead to an erroneous denial of 

credit or an increase in the cost of credit. On the other hand, if the CRA creates a new file, but 

the information belongs to a consumer’s file already in the CRA’s system, the CRA has created 

a “fragmented file,” which is a source of incompleteness. Such a file can harm consumers to the 

extent that it fails to include information that reflects the consumer’s positive credit experience. 

Prior studies of consumer report accuracy and completeness essentially fall into three 

categories – consumer surveys, studies based on dispute data statistics, and studies based on 

anonymous data provided by the CRAs about a large number of individual consumers. The 

FTC’s review of these studies determined that, although each approach provides some useful 

information about credit report accuracy and completeness, none provides a comprehensive view. 

Indeed, none of the existing studies relied on the participation of all three of the key stakeholders 

in the credit reporting process: consumers, data furnishers, and the CRAs. Questions have also 

been raised about the reliability and representativeness of the samples used in the prior studies. 

For many of the same reasons, looking to consumer complaints filed with the Commission and 

other law enforcement agencies does not give a statistically reliable picture of the accuracy of 

all information in CRA files. (Consumer complaints are important, however, for other FCRA 

compliance purposes and the FACT Act thus prescribes a complaint-sharing mechanism, 

discussed further below.)

 The FTC is evaluating whether and how to conduct a survey that would attempt to address 

some of the limitations of the prior studies. In particular, it would focus on consumers and 

their experiences in identifying and disputing errors in their credit reports, would be based 

on a nationally representative sample, and would use a reliable method for identifying errors 

and omissions. The survey would also categorize errors by type and seriousness in terms of 

potential consumer harm. The pilot study will both test the feasibility of a national survey and 

allow the FTC to estimate the potential costs of such a survey. Depending on the outcome of the 

pilot study, the FTC may conduct further pilot studies; it may also need to reassess the design 

currently being contemplated for the national survey. The results of the pilot study, and the next 
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steps taken by the FTC in its ongoing accuracy study, will be provided in a later interim Report 

to Congress under Section 319.

Data Matching Proposal 

The FTC’s Data Matching study examines the costs and benefits of requiring the CRAs to 

increase the number of points of identifying information used to match a consumer to a credit 

report – for example, requiring an “exact match” on name, social security number, address, 

and zip code. The proposed requirement is intended to address an important potential source 

of inaccuracy in credit reporting – namely, that a CRA could fail to assign data to the correct 

consumer’s file, or could furnish a file to a creditor or other user of credit reports relating to the 

wrong consumer. The FTC’s study examines the effects of the proposal on both the process of 

assigning data to consumer files (“file building”) and the process of retrieving data in response to 

an inquiry (“file retrieval”). 

As described in the report, matching difficulties arise from problems with the data available 

to the CRAs. For example, furnishers of information to the CRAs may possess and report 

identifying information for individual consumers that is not accurate or complete. As a result, 

matching with 100% certainty is sometimes impossible.

The report concludes that, if the proposed matching requirement were imposed on the 

matching process for file building, there would likely be a reduction in “mixed files” because 

data would be less likely to be assigned to the wrong file. Although mixed files can be costly 

for consumers, the purpose of the FCRA’s dispute procedure is to reduce these costs by enabling 

consumers to spot and correct errors. (How CRAs and furnishers handle consumer disputes is 

the subject of another study, which will be separately reported to Congress under Section 313(b) 

of the FACT Act.) For this reason, the benefits of the proposal may be limited. At the same time, 

because the data provided by furnishers is imperfect and unlikely to allow precise matching, the 

proposal also would likely lead to more “fragmented files.” If this occurred, credit reports would 

be less informative and the cost of credit could increase substantially. 

For file retrieval, the proposed requirement could lead to a reduction in the number of times 

the CRA furnishes the wrong file. However, available evidence suggests that the incidence of 

this problem may be quite small, whereas the matching requirements could impose substantial 

costs. For example, the requirements would likely increase the frequency with which a user’s 

request does not return any file, which would impose costs and inconveniences on both users of 

credit reports and credit applicants. 

The report also discusses a new FACT Act requirement which may further the same goals 

intended by the matching proposal. Section 315 of the FACT Act requires CRAs to notify the 

user of a credit report when the address provided for a consumer “substantially differs” from 

the addresses in the CRA’s file. Although the main goal of this provision is to create a “red 

flag” pointing to possible identity theft, such a notice would also serve to notify the user of the 

possibility of an error. The FTC and the federal banking agencies are currently developing 

regulations to implement this new requirement.
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Same Report Proposal

The Same Report study examines the effects of providing a consumer who has experienced 

an “adverse action” with the “same report” relied on by the creditor in taking the adverse action. 

Under current law, consumers can request a free copy of their credit report following denial 

of a loan or other adverse action. This right enables them to spot and dispute any errors in the 

report that may have led to the adverse action. The purpose of the “same report” proposal is to 

address the situation in which a report provided to a consumer following an adverse action does 

not contain the same information that was provided to the creditor. The FTC study examines the 

effect of the proposal under two possible approaches: (1) requiring the CRA that provided the 

report to the creditor to provide the “same report” to the consumer, and (2) requiring the creditor 

who took the adverse action to provide the “same report.” 

The report concludes that the proposed requirement could benefit consumers in those 

situations when a creditor was provided with the wrong consumer’s report or with multiple 

reports, not all of which pertain to the correct consumer. In both cases, however, the extent 

of harm caused by these errors, and the presumed benefits of the proposed requirement, are 

unclear. For example, available data suggest that multiple files are sent in less than 1% of cases. 

Although even this small percentage could translate into a significant number of credit reports 

each year, many creditors who receive multiple reports already take extra steps to correct the 

problem. For example, some creditors show the reports they receive to the consumer, which 

would alert the consumer to the existence of multiple reports. Thus, the harm caused by this 

practice – and the benefit of the proposed “same report” requirement – is likely to be limited. 

At the same time, the proposal could impose substantial costs on both consumers and 

industry as a whole. The potential costs to consumers would include the privacy concerns raised 

by receiving a report that could pertain to another person. Further, if creditors were required to 

provide reports automatically with an “adverse action” notice, this could increase the volume of 

reports being sent and thus raise identity theft concerns. Additionally, a same report requirement 

would help consumers understand only what was in their file at the time the report was furnished. 

To the extent that a consumer wanted to verify the accuracy of information currently in the file, 

the same report requirement would be less helpful because the “same report” would be somewhat 

out of date and perhaps incomplete. In contrast, consumer disclosures currently mandated under 

the FCRA provide all information about a consumer in the CRA’s files at the time the consumer 

requests disclosure. A same report requirement could thus indirectly impose additional costs on 

consumers attempting to identify and correct information currently contained in their reports. 

The potential costs to industry would be substantial because, if the CRAs were required to 

provide the report, they would need to build systems to house every report that is ever provided 

to a creditor, even though only a fraction of these (those subsequently leading to “adverse 

action”) would ever be sent to consumers. If the creditors were required to provide the reports, 

they would need to build systems to produce reports in a consumer-friendly format. Further, 

creditors who receive only summary data from the CRAs might need to supplement their data to 

ensure complete and meaningful disclosures to consumers.

New FACT Act requirements may provide a more targeted response to this concern. For 

example, Section 315, discussed above, requires CRAs to notify the user of a credit report when 
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the address of a consumer “substantially differs” from the address on file. Section 114 requires 

users of credit reports to implement procedures to identify and respond to identity theft “red 

flags,” or common signs that identify theft has occurred. Both of these requirements will impose 

added responsibilities on creditors to determine that the credit applicant is indeed the person to 

whom a credit report pertains. For example, if the creditor receives two credit reports, one of 

which pertains to the wrong consumer, it is likely that the wrong report will contain an address 

that does not match that of the applicant. This will trigger a notification by the CRA to the 

creditor that the address in that report does not match.

Negative Information Notice Proposal

The Negative Information Notice study examined the effects of requiring notification 

to consumers when negative information has been added to their credit reports. Currently, 

the FCRA requires creditors to notify consumers when they take “adverse action” based on 

information in a credit report. By the time a consumer receives this notification, however, it may 

be too late for the consumer to salvage the transaction by correcting any inaccuracies in his or 

her report. The idea behind the proposed notice is that consumers would learn about negative 

information in their reports before they apply for credit, when there still might be sufficient time 

to remedy the problem.

The report concludes that the proposed notice could benefit consumers by allowing them to 

check the accuracy of information in their credit reports before any errors become an obstacle 

to obtaining credit or other services. However, these benefits may be limited. For example, if 

the furnisher provided the notice, it would not be in a position to notify consumers about certain 

negative information that is added to consumers’ files – for example, public record information, 

which the CRAs obtain themselves. A requirement that the CRA provide the notice would not 

have these limitations. 

Regardless of who provides the notice, the costs to both industry and consumers could be 

substantial. Although furnishers are in regular contact with consumers, they would still need 

to revise their systems and procedures in order to be able to provide this new notice. If CRAs 

provided the notice, the costs would be even higher. Every year, a significant amount of negative 

information is added to credit reports from a variety of sources. The CRAs would be required to 

provide the notice each time such information is added, even when the information is accurate. 

In addition, it is unclear how consumers would respond to notices received from a CRA, 

especially if they are unfamiliar with the sender. Some would not read the notices; others could 

find unsolicited notices intrusive. Sending numerous unsolicited notices to consumers could also 

open avenues for fraud. Some reports will inevitably be misdirected or sent to old addresses. 

Moreover, there is a risk of creating an environment conducive to “phishing” schemes, in which 

fraudulent operators pose as CRAs to obtain sensitive consumer information. 

An opt-in system, in which consumers elect to receive negative information notices, could 

fulfill the goals of the proposed requirement while avoiding many of the costs. The market 

has begun to provide such systems in the form of credit monitoring services. These services 

are new, and the costs and benefits they provide should become clearer as the market develops. 

In addition, the new FACT Act requirement mandating a free annual report should increase 
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consumers’ access to their consumer reports, and the likelihood that they will spot and correct 

any errors. The FTC has issued regulations implementing this requirement and the program 

began to take effect on December 1. 

Common Unreported Transactions

The Common Unreported Transaction study examined whether there are common 

financial transactions that are not generally reported to the CRAs, but that would provide useful 

information in determining creditworthiness. It also examined whether there are any actions 

that might be taken within a voluntary system to encourage the reporting of these types of 

transactions.

The idea behind the study is that many Americans may be missing out on the benefits 

associated with the credit reporting system because certain types of payments are not typically 

reported to the CRAs.

The report concludes that there are common underreported transactions that could be 

useful in evaluating creditworthiness – in particular, rental payments and utility payments. It 

also concludes that there are certain barriers to reporting these payments that may or may not 

hinder efforts to encourage greater reporting. For rental payments, the main barrier appears to 

be the diffuse rental market and the lack of centralized data collection, which could be difficult 

to change. For utility payments, the barriers appear to be cost, some state privacy laws, and 

possible disincentives created by state regulatory systems. To the extent that state regulatory 

systems create barriers, these would need to be addressed at the state level.

Despite these barriers, there are private sector efforts underway to capture and report this 

type of data. These efforts are still at the beginning stages. As they develop, the FTC will 

continue to monitor these efforts to determine whether they succeed in providing greater access 

to information about common unreported transactions. 

Conclusion

Based on the findings and conclusions of these studies, the Commission is not making 

legislative or administrative recommendations at this time. In addition to concluding that the 

costs of specific proposals examined in the Section 318 studies could exceed their benefits, 

the Commission believes that it is premature to enact alternative requirements of this nature. 

Indeed, as discussed above, the FACT Act imposed a host of new requirements that, when fully 

implemented, should further enhance the accuracy and completeness of credit reports. These 

requirements should also address some of the specific concerns underlying the Section 318 

proposals. For example, consumers’ new right to obtain a free annual file disclosure should 

help consumers spot negative information before it causes harm, consistent with the goals of the 

negative information notice proposal. Also, the requirement that CRAs notify creditors when 

the address that a creditor provides for a consumer “substantially differs” from the address in the 

CRA’s file coincides with the goals of the proposed matching requirements. 
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In addition, the credit reporting industry is in a period of rapid change, due not only to 

the FACT Act reforms but also to the increasing prominence of consumer reports in today’s 

economy. Once limited to credit transactions, credit reports are now used, for example, to screen 

job applicants and price insurance. The greater use of risk-based pricing increasingly means that 

relatively modest differences in credit scores are more relevant to consumers. Consumers are 

also increasingly aware of the importance of credit reports and the need to check their accuracy. 

In the midst of these changes, the market appears to be responding to some of the problems 

highlighted in the Section 318 proposals. For example, the industry now provides credit 

monitoring services that, for a fee, alert consumers when certain information is added to their 

files. Although these services are relatively new, they could fulfill some of the same goals as 

the negative information notice, albeit at a cost to consumers. Further, new products have been 

recently introduced that attempt to gather information on rental payments, utility payments, and 

other common unreported transactions. The success of these products remains to be seen, but 

they could help ensure that this information is considered in evaluating consumers for credit. 

Finally, the ongoing accuracy and completeness study that the Commission is considering, 

beginning with the pilot study, could help shed light on the continuing concerns that are 

addressed in this report. In particular, the Commission believes that the ongoing accuracy 

study may provide a better estimate of the costs and benefits of the specific proposals that the 

Commission currently considers to be premature. As the Commission pursues the study, it 

will attempt to identify any areas where further reform is needed, as well as any improvements 

observed due to the FACT Act or the ongoing changes in the marketplace. 
1

Federal Trade Commission

I. Introduction 

The Federal Trade Commission (“FTC” or “Commission”) submits this report pursuant to 

Sections 318 and 319 of the Fair and Accurate Credit Transactions Act of 2003, Pub. L. 108-159, 

117 Stat. 1952 (“FACT Act”). The FACT Act, which was enacted on December 4, 2003, amends 

the Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. (“FCRA”), the statute that governs the 

operation of the nation’s consumer reporting system. 

As described more fully in the following sections, the enactment of the FCRA in 1970, and 

its amendment in 1996, coincided with the development of a modern credit reporting system in 

the United States. This system consists of a number of consumer reporting agencies (“CRAs”), 

three of which have emerged as the major national credit bureaus, and numerous smaller CRAs. 

CRAs compile consumer information (such as payment history) submitted voluntarily by 

creditors and other businesses (“furnishers”), and disseminate compilations of that information in 

“consumer reports”1 to creditors, insurance companies, employers, and others with a legitimate 

business need for that information. These consumer report “users” analyze the information 

to assess risks, often through a credit score that represents the risk numerically.

2

 This flow of 

information enables credit grantors and others to make more expeditious and accurate decisions, 

to the benefit of consumers. 

The FCRA provides the framework for the operation of the consumer reporting system, 

and includes significant protections for consumers. Chief among those protections are a variety 

of provisions designed to enhance the accuracy of consumer reports. Consumer report data are 

used to make critical decisions about consumers’ eligibility for credit and insurance (and the cost 

of those services), as well as employment and other benefits. Because even small differences 

in a consumer’s credit score can affect the cost or availability of credit, the accuracy of the 

information underlying the score is of great importance. Moreover, consumer report information 

often is the first indication to a consumer that he or she has been a victim of identity theft. 

As will be discussed in more detail, the FCRA employs two primary approaches to 

achieving the goal of optimal accuracy. First, it requires CRAs to follow “reasonable procedures 

to assure maximum possible accuracy of the information” they report. Second, the FCRA

establishes mechanisms for consumers to learn about possible errors in their consumer reports 

and have them corrected. For example, consumers have the right to know all of the information 

in their files, receive notice when they suffer “adverse action” as a result of information in their 

report, and dispute the accuracy or completeness of that information.

1. Consumer reports include credit reports and other “written, oral, or other communication of any information 

by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, 

character, general reputation, personal characteristics, or mode of living which is used or expected to be used 

or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility 

for” credit, insurance, employment, or other “permissible purpose” as defined by the FCRA. FCRA § 603(d), 

15 U.S.C. § 1581a(d).

2. See Robert B. Avery, Paul S. Calem, Glenn B. Canner & Raphael W. Bostic, An Overview of Consumer Data 

and Credit Reporting, Federal Reserve Bulletin (Feb. 2003), at 49 [hereinafter 2003 FRB Study]; see also

The Accuracy of Credit Report Information and the Fair Credit Reporting Act: Hearing Before the Senate 

Committee on Banking, Housing, and Urban Affairs, 108th Cong. (July 10, 2003) (statement of Stuart K. Pratt, 

Consumer Data Industry Association (“CDIA”)) [hereinafter Statement of Stuart K. Pratt].
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Federal Trade Commission

The FACT Act, among other things, enhances the accuracy provisions of the FCRA in 

several respects. For example, the FACT Act provides consumers with the right to a free annual 

consumer report from each of the three nationwide CRAs, as well as from “nationwide specialty 

consumer reporting agencies.” In addition, the FACT Act gives consumers the right to obtain 

their credit scores in certain situations, and to dispute information in their reports directly with 

the furnisher of that information. The FACT Act also requires creditors to provide a “risk-based 

pricing” notice when they offer consumers less advantageous terms based on information in 

consumer reports. Further, the Act contains a number of new provisions designed to prevent or 

remedy identity theft.3

In addition to these affirmative requirements, Sections 318 and 319 of the FACT Act direct 

the Commission to study and report to Congress on various issues related to the accuracy and 

completeness of consumer reports. Specifically, Section 319 requires “an ongoing study of the 

accuracy and completeness of information contained in consumer reports prepared or maintained 

by CRAs and methods for improving the accuracy and completeness of such information.” The 

study is to take place over eleven years, with the final report due to Congress in 2014. During 

the ongoing study, the Commission must also submit five interim reports to Congress, to be 

completed every two years beginning in December 2004. Each report must contain a summary 

of the Commission’s findings to date, as well as any recommendations for legislative or 

administrative action. Part III of this report is the Commission’s first interim Report to Congress 

under Section 319. 

Section 318 directs the Commission to study proposals to improve the operation of the 

FCRA. The proposals to be studied are:

• Increasing the number of points of identifying information (e.g., name, social security 

number, address, etc.) that a credit reporting agency is required to match to ensure that a 

consumer is the correct individual to whom a consumer report relates. Section 318(a)(2)(A) 

of the FACT Act directs the FTC to study whether increasing the amount of identifying 

information might be an effective means of ensuring that the data in a consumer’s file relate 

to the intended consumer. This is discussed in Part IV (“Data Matching Study”) below.

• Requiring that a consumer who has experienced an adverse action based on a credit report 

receives a copy of the same report that the creditor relied on in taking the adverse action. 

Section 318(a)(2)(C) of the Act asks the FTC to study the degree to which providing 

consumers with the same report that the creditors used might help consumers spot errors 

(for example, that the wrong consumer’s information was provided). This is addressed in 

Part V (“Same Report Study”) below.

• Requiring notification to consumers when negative information has been added to their 

credit reports. Section 318(a)(2)(B) of the Act asks the FTC to study whether informing 

consumers when negative information, such as a reported delinquency, has been added 

to their files might be an effective way to help consumers identify errors or fraudulent 

information in their reports. This is addressed in Part VI (“Negative Information Study”) 

below.

3. Many of the regulations implementing these FACT Act provisions are still being developed.
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• Identifying any common financial transactions that are not generally reported to the 

consumer reporting agencies, but that would provide useful information in determining 

creditworthiness, and any actions that might be taken to encourage greater reporting of 

such transactions. Sections 318(a)(2)(D) and (E) of the Act ask the FTC to study whether 

there are transactions that are not generally reported and whether there might be ways to 

encourage greater reporting. The question is motivated by the notion that many consumers, 

who may be hampered in obtaining credit because they lack traditional credit histories, 

might have other unreported payment experiences that are useful predictors of risk. This is 

addressed in Part VII (“Common Unreported Financial Transactions Study”) below.

Section 318 directs the Commission to submit a report to Congress one year after 

enactment that includes the findings and conclusions of the study, along with any legislative 

or administrative recommendations. Parts IV, V, VI, and VII of this report comprise the 

Commission’s Report to Congress under Section 318. 

This report examines issues that have generated considerable discussion and disagreement 

in recent years. Although a variety of interested parties – including consumer groups, 

industry organizations, Federal Reserve Board (“Board” or “FRB”) staff, and the Government 

Accountability Office (formerly General Accounting Office) (“GAO”) – have examined 

consumer report accuracy and completeness, they often have reached different conclusions, and 

the reliability of the data is uncertain. As discussed below, the Commission plans to conduct 

a pilot study, as part of the study required by Section 319 of the FACT Act, to determine the 

feasibility of conducting a more comprehensive and reliable survey of this issue. 

The report is organized as follows: Part II describes the information gathering process 

that the Commission staff used in preparing this report. Part III, the Section 319 portion of the 

report, summarizes the Commission’s findings and conclusions thus far in the ongoing accuracy 

study and, in particular: (1) summarizes the history and current practices of the credit reporting 

industry; (2) provides background on the FCRA’s accuracy requirements and the FTC’s efforts 

to ensure compliance with them; (3) reviews the studies that have been undertaken to date to 

examine consumer report accuracy and completeness; and (4) discusses the FTC’s preparation 

and design of a pilot study to assess the feasibility of a nationwide consumer survey. Parts IV, V, 

VI, and VII – which together comprise the Section 318 portion of the report – provide detailed 

discussions of the benefits and costs of each of the Section 318 proposals. Finally, Part VIII 

contains the report’s conclusion.

II. The Information Gathering Process

In preparing this report, the Commission used a variety of means to obtain information.4 

The Commission staff reviewed current literature. In addition, the Commission sought comment 

on specific issues related to the studies from interested parties, obtaining input from over 50 

organizations and 100 individuals. Those consulted represent a wide spectrum of interests, and 

include consumer groups, consumer reporting agencies, resellers of consumer reports, furnishers 

of consumer report information, and users of consumer report information.

4. Not every study used all of the information gathering techniques.
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Depending on the specifics of the information required, Commission staff used different 

methods of collecting information for the different parts of the report. For instance, in analyzing 

the data matching proposal, the Commission staff found it necessary to gather information 

about the specific matching processes used by the nationwide CRAs. Because these matching 

techniques are proprietary, and the CRAs were unwilling to disclose them in a public forum, 

Commission staff conducted confidential interviews with representatives of the nationwide 

CRAs.

In collecting information for the “same report” proposal, it was important to understand 

the experiences of creditors and consumers in the use of consumer reports. To this end, the 

Commission solicited comments in a Federal Register Notice seeking public comment on 

the issues raised by the “same report” proposal.5 The notice sought comment on a number of 

specific issues related to the proposal, including the factors that account for the differences 

between the reports received by creditors and those received by consumers; the problems created 

by these differences; the benefit to consumers from a requirement that they be given the “same 

report” provided to creditors; the impact of the proposed requirement on identity theft; and the 

costs associated with implementing the proposed requirement. The Commission received 63 

comments in response to this notice,6 which greatly assisted the agency in preparing the “same 

report” study and were also useful in preparing the other studies.

In addition, the Commission convened a roundtable meeting on June 30, 2004 to discuss 

issues related to designing the Section 319 Accuracy Study.7 FTC staff invited many researchers 

and practitioners in the consumer reporting industry to give prepared remarks at the roundtable. 

Appendix A includes the Federal Register Notice announcing the roundtable. The agenda, list 

of participants, and official transcript of the proceedings are available through the Commission’s 

website.8

For all of the studies, the FTC focused primarily on the activities of the three nationwide 

CRAs – Equifax Information Services, LLC (“Equifax”), Experian Information Solutions, Inc. 

(“Experian”), and TransUnion LLC (“TransUnion”), which comprise the vast majority of the 

industry. To understand their operations in more detail, Commission staff obtained information 

from these CRAs and conducted discussions with their representatives, including their technical 

staff. Although much of this information was provided on a confidential basis, the information 

provided allowed FTC staff to gain considerable insight into the CRAs’ procedures.

The report also focuses, in particular, on the use of consumer reports in credit transactions. 

Although consumer reports are increasingly used in non-credit related determinations such 

5. 69 Fed. Reg. 33,387 (June 15, 2004). This Federal Register Notice can be found in Appendix C and at http://

www.ftc.gov/os/statutes/fcrajump.htm. 

6. These comments are available on the FTC’s website at http://www.ftc.gov/os/comments/factaadverseactstudy/

index.htm.

7. 69 Fed. Reg. 32,549 (June 10, 2004). This Federal Register notice can be found in Appendix A and at http://

www.ftc.gov/os/statutes/fcrajump.htm. 

8. See http://www.ftc.gov/be/workshops/.
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Federal Trade Commission

as insurance and employment,9 the provisions of the FACT Act mandating the studies focus 

primarily on “credit reports.” Further, many of the issues that the studies address – e.g., the 

effectiveness of matching systems and the accuracy of information furnished to CRAs – have 

particular relevance and importance in the context of credit determinations. Focusing on credit 

determinations also limits the scope of the studies in a way that ensures their manageability.

III. Accuracy And Completeness

A. Introduction 

Section 319 of the FACT Act requires the Commission to conduct:

an ongoing study of the accuracy and completeness of information contained in 

consumer reports prepared or maintained by consumer reporting agencies and methods 

for improving the accuracy and completeness of such information.10

The study is to take place over eleven years, with the final report due to Congress in 2014 

and five interim reports to be completed every two years from December 2004 onward (until 

December 2012). 

In preparing this first interim report, Commission staff reviewed the current literature on 

the accuracy of credit reporting, and convened a roundtable of experts and interested parties to 

discuss methods for conducting the mandated study. Commission staff also held discussions 

with many representatives of industry and consumer groups, and these discussions were helpful 

in gathering the information for this report.

This report summarizes the Commission’s findings and conclusions thus far on the ongoing 

study and, in particular: (1) summarizes its research on the history and current practices of the 

consumer reporting industry; (2) provides background on the FCRA’s accuracy requirements 

and the FTC’s efforts to ensure compliance with them; (3) reviews the studies that have been 

undertaken to date to examine consumer report accuracy and completeness; and (4) discusses the 

FTC’s preparation and design of a pilot study to assess the feasibility of a nationwide consumer 

survey. The discussion in this report also provides background for the Section 318 studies 

described later in this report, which examine specific proposals for improving the accuracy and 

completeness of consumer reports.

9. A credit report is one type of “consumer report” regulated by the FCRA. As defined in the FCRA, consumer 

reports include a broad array of information used to make decisions in consumer-initiated transactions, such 

as reports provided by tenant screening or employment screening services. FCRA § 603(d), 15 U.S.C. § 

1681a(d).

10. “Completeness” as used in Section 319 of the FACT Act (and in this report) has a different meaning from 

“completeness” under Section 611 of the FCRA. Under Section 319, “completeness” refers to the quantity 

of information in a consumer’s file that would be increased by the addition of more transactions, such as 

those referred to in FACT Act Section 318(a)(2)(D) and (E) to the consumer reporting system. (A file would 

be more “complete” if it included information about the consumer’s rental payments.) “Completeness” in 

Section 611 of the FCRA refers to the sufficiency of the information in a specific item in the consumer’s file. 

(A credit account item would not be “complete” if it omitted two payments that had been made after the item 

was last updated by the CRA.).
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B. The Credit Reporting System in the United States

The U.S. credit reporting industry consists primarily of three nationwide CRAs and 

currently contains a wide range of information on approximately 200 million consumers.11 

Creditors and others voluntarily submit this information to centralized, nationwide repositories 

of information. Users of consumer reports analyze this data and other information to assess the 

risk posed by applicants, often using sophisticated predictive models such as credit scores.12 

This flow of information enables credit grantors and others to make fast and accurate decisions 

about a consumer’s eligibility for various products and services, which benefits both lenders and 

consumers. Indeed, in the U.S., consumers can typically obtain credit from a complete stranger 

within minutes.

Once used primarily for granting loans, the information held by CRAs and the credit scores 

derived from it are increasingly used in other transactions, such as the granting and pricing of 

telecommunications services and insurance. Given the wide use of credit reports for multiple 

purposes, the accuracy and completeness of the data contained in them is of great importance to 

consumers.

1. History

Credit reporting has a long history in the United States.13 CRAs emerged more than a 

century ago, at a time when most consumer credit was extended by retailers. At the time, retail 

markets were local, limited to a single town or neighborhood. Most CRAs began as cooperative 

agreements through which retailers shared information about customers who had failed to repay 

their obligations. Faced with a new customer, a retailer could draw on the experience of other 

local shops in deciding whether to extend credit. These early CRAs operated on a reciprocal 

basis – furnishing information to the bureau was a precondition for gaining access to the CRA’s 

information.

During the 20th century, consumer reporting evolved considerably in response to changes 

in the economy and technology. One important change was that lending moved from local to 

national markets. Retail markets became larger, expanding to regional and then national chains. 

At the same time, the primary source of consumer credit shifted from retailers to banks and 

finance companies. Although banks were constrained for a long time by restrictive banking laws, 

these restrictions became less important with the growth of bank-issued credit cards, which banks 

were interested in offering on a regional or national scale. These changes made local consumer 

report information less valuable and spurred demand for access to more comprehensive data, 

11. See 2003 FRB Study and Statement of Stuart K. Pratt, supra note 2.

12. Scoring products (sometimes referred to as “risk scores” or “credit scores”) are predictive models based on 

analyses of historical consumer credit history and performance data. When a consumer applies for credit 

or insurance, the models use information in the consumer’s credit history to predict the risk posed by that 

consumer. The risk is typically summarized in a numerical score.

13. For a more detailed discussion of the history and development of the consumer reporting system in the United 

States, see Robert M. Hunt, The Development and Regulation of Consumer Credit Reporting in America

(Federal Reserve Bank of Philadelphia Working Paper No. 02-21, Nov. 2002).
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Federal Trade Commission

which in turn spurred the growth of the larger credit bureaus. Additionally, the development of 

computers made it possible to store and retrieve consumer credit data much more efficiently. 

Apart from improving the efficiency of CRA operations, the computerization of creditor records 

enabled CRAs to accept automated account updates in electronic format.

These changes led to a shift from local, cooperative CRAs to a system dominated by a 

few nationwide firms. By the end of the 1980s, several firms had made the significant fixed 

investment in information technology and data necessary to offer national coverage; three of 

them (Equifax, Experian, and TransUnion) now dominate the U.S. market for consumer credit 

reporting.14 Instead of a reciprocal system in which members share information, the CRAs sell 

information to “subscribers.” These subscribers may or may not provide information about their 

accounts to the CRAs. Most large banks and finance companies supply information about their 

credit accounts to all three of the nationwide CRAs, though they may be a customer of only 

one.15

The total amount of consumer credit extended grew substantially over the course of the 

20th century. From 1919 to 1969, consumer credit grew at four times the pace of the expansion 

in consumer spending.16 As consumer credit expanded after the Second World War, consumer 

reporting also became more widespread; by the end of the 20th Century, credit reports were 

used in a wide variety of credit and non-credit transactions. As consumer reports became more 

important, concerns grew about their accuracy and how inaccurate information might harm 

consumers. The CRAs make money by selling information, and the quality of their product is 

largely determined by the accuracy and completeness of the information. This implicit quality 

requirement creates market incentives to maintain and improve the accuracy and completeness 

of the reports they sell. Nevertheless, given the inevitable costs involved in achieving maximum 

accuracy, concerns arose about whether the CRAs were taking sufficient steps to ensure accuracy. 

Consumers who were the subject of inaccurate reports had little or no recourse. In some cases, 

CRAs forbade their subscribers from sharing the information in a consumer report with the 

consumer who was the report’s subject.17 This situation led to the concern that a consumer’s 

reputation might be unfairly tarnished by an inaccurate report provided by an anonymous source.

14. Some nationwide CRAs have contractual relationships with various smaller regional or local CRAs. These 

smaller agencies, traditionally called “service bureaus” or “affiliates,” generally are independently owned 

and operated entities. In the Commission’s Free Annual File Disclosures Rule, these agencies are termed 

“associated consumer reporting agencies.” 16 C.F.R. § 610.1(b)(2). Associated agencies generally are not 

under common ownership or control with a nationwide CRA and are thus not corporate affiliates. Rather, they 

typically have a contracted right to house some or all of the consumer data that they own on the systems of one 

or more nationwide CRAs. The nationwide CRA with which such an entity is associated maintains the data 

for the associate bureau and has the right to sell that consumer data to its customers; the associated CRA may 

also have the right to sell consumer information owned by the nationwide CRA.

15. See Statement of Stuart K. Pratt, supra note 2. 

16. See Hunt, supra note 13, at 10.

17. See Michael E. Staten & Fred H. Cate, Joint Center for Housing Studies Working Paper Series No. BABC 04-

14: Does the Fair Credit Reporting Act Promote Accurate Credit Reporting? (Feb. 2004). 
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The Fair Credit Reporting Act of 1970 addressed these issues by providing a number of 

new consumer protections. First, it gave consumers a right to information about their CRA file,18

without charge in the case of a consumer who has been turned down for credit as a result of a 

report from the CRA.19 Second, it created a dispute process by which a consumer could contest 

items in a consumer report that he or she believed to be in error.

20 Third, the FCRA required that 

CRAs implement “reasonable procedures to ensure maximum possible accuracy” in consumer 

reports.21 In guaranteeing consumers access to their own credit reports and creating the dispute 

process, Congress recognized that consumers have a critical role in ensuring the accuracy of 

consumer reports. Rather than precisely regulating the way that CRAs maintain their files, 

Congress opted to hold CRAs accountable for their procedures, and to give consumers the 

opportunity to check the accuracy of their files. Amendments in 1996 strengthened the FCRA’s 

consumer protections by, among other things, placing certain legal obligations on furnishers with 

respect to the accuracy of information provided.22 In passing the FACT Act in 2003, Congress 

further strengthened this approach by, for example, requiring that consumers have access to a 

free copy of their consumer report each year.

Consumer credit in the U.S. has continued to expand since enactment of the FCRA. For 

instance, the Federal Reserve Board reports that the fraction of U.S. households with bank-type 

credit cards increased from 16% in 1970 to 68% in 1998.23 Among the lowest income quintile, 

the fraction rose from 2% of households in 1970 to 28% in 1998. Further, as the credit market 

has matured, lenders’ incentives have changed. In addition to avoiding bad credit risks, lenders 

now focus on identifying people with good credit history so as to expand the market for lender 

products.24

2. How the system works today

The three nationwide CRAs maintain files on approximately 200 million U.S. consumers 

and issue more than 1.5 billion reports a year in response to consumer applications for credit, 

18. FCRA § 609, 15 U.S.C. § 1681g. Originally, consumers had a right under the FCRA only to the “nature and 

substance” of the information in their file. In the 1996 FCRA amendments, this right was expanded to include 

all information in the consumer’s file, except for risk scores. See Consumer Credit Reporting Reform Act of 

1996, P.L. 104-208, 110 Stat. 3009-426 (the Omnibus Consolidated Appropriations Act for Fiscal Year 1997, 

Title II, Subtitle D, Chapter 1).

19. FCRA § 612(b), 15 U.S.C. § 1681j(b).

20. FCRA § 611, 15 U.S.C. § 1681i.

21. FCRA § 607(b), 15 U.S.C. § 1681e(b).

22. Consumer Credit Reporting Reform Act of 1996, 110 Stat. at 3009-426. 

23. Testimony of Dolores S. Smith, Federal Reserve Board, before the Subcommittee on Financial Institutions and 

Consumer Credit of the House Committee on Financial Services, 107th Cong. (Nov. 1, 2001).

24. See, e.g., John M. Barron & Michael Staten, The Value of Comprehensive Credit Reports: Lessons from the 

U.S. Experience (2001) (Credit Research Center, Georgetown University). In the section entitled “The Value 

of Positive Information,” these authors describe a simulated measurement of the curtailment of credit when 

information in consumer reports is restricted to negative information.
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employment, and insurance. The data in these files are provided on a voluntary basis by about 

30,000 data furnishers.25

The CRAs obtain records related to consumers’ credit history from creditors, collection 

agencies, and public sources. Each record is attached to identifying information such as name, 

social security number (“SSN”), address, and birth date. The CRAs organize these records into 

“files,” which refer to all records that the CRA believes to belong to the same person. The CRAs 

attempt to maintain exactly one file for every credit-using consumer and to include as many of 

that consumer’s accounts and other records as possible. This report will refer to the process of 

adding information to consumer files as “file building.” A simplified version of the process is 

described in Figure 1a.26

The CRAs make the information in their files available to subscribers. Subscribers may be 

the final users of consumer reports, or they may be “resellers,” entities that purchase consumer 

reports from the nationwide CRAs and sell the information to final users. In some cases, the 

reseller provides further input to the consumer report information, such as merging the reports 

from different nationwide CRAs, checking for accuracy, or adding information from other data 

sources. This report refers to the process of furnishing consumer reports in response to inquiries 

as “file retrieval.” (See Figure 1b.)

25. See Statement of Stuart K. Pratt, supra note 2. These figures and the discussion that follows were also based 

on conversations between FTC staff and representatives of the three nationwide CRAs.

26. In the past, at least one of the nationwide CRAs organized its database differently. Rather than maintaining 

consumer files, it maintained a dataset of separate records (accounts or public records). When an inquiry 

was submitted, the CRA’s computer program located all records that matched the identifying information in 

the inquiry and compiled that data into a consumer report. This meant that two inquiries that used different 

identifying information for the same consumer might yield different reports (e.g., a credit report for Ann 

Margaret Smith might be different depending on whether she applied for credit under the name “Ann Smith” 

or “A. M. Smith”). It also meant that the same trade line might show up on the reports of two different 

consumers. For example, an account belonging to “John Doe” might show up on the reports of both John 

Doe, Jr. and John Doe, Sr. None of the nationwide CRAs follows this procedure any longer; every incoming 

record is assigned to exactly one consumer file within a given CRA’s database.

Figure 1a: The file building process

Figure 1b: The file retrieval process

Furnisher updates 

consumer accounts

Furnisher submits 

consumer account 

information to 

CRA

CRA matches 

account 

information to 

consumer files

CRA updates 

files with new 

information

Consumer applies 

for credit

Creditor submits 

inquiry about 

consumer to CRA

CRA matches 

inquiry to a 

consumer file

CRA returns file to 

creditor
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The FCRA refers to information furnished to a final user as a “consumer report.” Although 

this report is based on the information in an individual’s file, it may not contain all the 

information in the file.27 In many cases, it may consist only of a credit “score” that summarizes a 

consumer’s credit history.

There are many different types of credit scores in use today.28 Each of the nationwide CRAs 

offers a variety of scores, such as scores that measure general creditworthiness, scores that are 

specific to certain types of credit such as auto loans or mortgages, and credit-based scores used 

to measure risk for auto or homeowners insurance.29 Some of these scores are developed by the 

CRAs themselves, and others are developed by third parties, such as Fair Isaac Corp. (developers 

of the “FICO” scores).30 Users have the option to purchase a score for a consumer without 

receiving any other information from the consumer’s file. There are also lenders and insurers 

that have developed their own custom scores. Some of these companies receive raw credit data 

from the CRA, typically in machine readable format, and use that data to calculate the score.31 

Others make arrangements with a CRA to have the CRA calculate the score.

3. What is in a file?

Consumer information in the files maintained by the nationwide CRAs can be divided into 

five categories:

1. Identifying information. This information typically includes name, address, birth date, 

SSN, and past or alternate names and addresses. Identifying information is used to link 

information provided by different furnishers, and to determine to which consumer file a 

subscriber’s inquiry pertains.

2. Credit account information. This category involves information about current and past 

credit accounts, including mortgages, car loans, credit cards, and installment payments for 

retail goods. The 2003 Federal Reserve study, which examined a sample of files from one 

of the nationwide CRAs, reported that 87% of files in the sample contained at least one 

credit account, and 80% contained an account that is open and active.32 Credit account 

information includes the identity of the creditor, the date the account was opened (and 

closed, if applicable), whether the account is open and in good standing, the balance and 

credit limit, the amount past due, and past payment performance.

27. In fact, the FCRA prohibits CRAs from disclosing some information in a consumer’s file to most users – for 

example, inquiries for certain transactions not initiated by the consumer and some medical information. 

FCRA §§ 604(c), (g), 15 U.S.C. §§ 1681b(c), (g).

28. Section 215 of the FACT Act mandates a study of the effects of “credit scores and credit-based insurance 

scores on availability and affordability of financial products,” to be completed jointly by the FTC and the 

Federal Reserve Board, in consultation with the Department of Housing and Urban Development. This study 

is in progress and is due in December of 2005.

29. There are also scores that measure different types of risk, such as default risk or bankruptcy risk. 

30. Fair Isaac representatives provided an overview of their score development at the roundtable meeting hosted 

by the FTC on June 30, 2004. A transcript is available at http://www.ftc.gov/ftc/workshops.htm (pages 65-73).

31. They may also combine the credit history data with other information, such as information from an 

application, to calculate a score based on more than just credit history. 

32. See 2003 FRB Study, supra note 2, at 51.
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3. Public records. Public records listed in consumer reports can include bankruptcies, 

foreclosures, civil judgments, and tax liens. According to the 2003 Federal Reserve study, 

approximately 12% of files included at least one public record.33

4. Collection accounts. This category includes unpaid debts that have been turned over to a 

collections agency – for example, an unpaid hospital bill. The 2003 Federal Reserve study 

found that approximately 30% of files had at least one collection agency account listed in 

them, although 52% of these collection actions appeared to be associated with medical bills 

and only 6% were associated with credit accounts. For about 10% of the files surveyed, the 

only information in them was a collections account.34

5. Inquiries. When a subscriber requests a consumer report, a record of that “inquiry” 

becomes part of the consumer’s file. Approximately 58% of consumer files in the Federal 

Reserve study included at least one inquiry.35 

C. Challenges in Assuring Accuracy and Completeness 

Accurate and complete consumer reports are important for consumers in two basic ways:

• For an individual consumer, a good credit rating may be the key to getting approved for a 

loan, job, apartment, insurance, phone service, or other services and benefits. For products 

or services where the credit rating determines approval or denial, an inaccuracy in a 

consumer report could cause the consumer to be rejected rather than accepted. For many 

products, such as credit and insurance, consumer reports are widely used to set pricing or 

other terms, depending on the consumer’s risk (“risk-based pricing”).36 For these products, 

an inaccuracy could cause the consumer to pay a higher price.

• At the market level, accurate and complete credit ratings provide lenders with information 

about borrowers’ credit history so they can more precisely estimate default risk and 

tailor their interest rates and other credit terms to the risk presented by the borrower. For 

example, by identifying consumers with a good credit record, creditors can offer these 

customers a lower interest rate that reflects their lower default risk. If credit information 

were frequently missing or wrong, then a good credit record would not be such a strong 

signal of a consumer’s low default risk. 

33. See id. at 67.

34. See id. at 68-69.

35. See id. at 70.

36. The use of credit scores in risk-based pricing allows lenders to assess the credit risk of the applicant before 

making an offer. With risk-based pricing fewer consumers are refused credit outright because fewer credit 

decisions are absolute “grant/deny” determinations. Indeed, credit scores are increasingly used in risk-based 

pricing calculations to set a wide variety of terms in granting loans – such as loan amount, rate, duration, 

down-payment or collateral requirements, fees, and payment schedule. Depending on the criteria of the 

lender, relatively small differences in credit score can alter the mix of risk-based pricing elements offered 

to a consumer by a creditor. Because scores in turn rely on all information in a consumer report (not just 

derogatory data), it is important that all information be accurate. The information relevant to a credit score 

includes items that have not typically been regarded as “negative,” such as number and type of tradelines, 

credit limits, inquiries, and open dates of accounts.
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There are a number of reasons why a consumer report may not be a complete, accurate 

representation of a consumer’s credit history. First, there may be problems with the data 

provided by a furnisher. A data furnisher may send a CRA information that is incorrect, may 

provide incomplete information, or may not provide any information at all. Second, there may 

be problems with assigning data to the proper consumer files (file building). A data furnisher 

may send correct information, but the CRA may not place it in the correct person’s file. Third, 

there may be problems with file retrieval. A CRA may send to a subscriber a consumer report 

that pertains to the wrong person, or it may fail to send a report entirely.

These issues will be discussed below in more detail.

1. Data provided by furnishers

If a CRA does not receive complete and accurate information from data furnishers, the CRA 

will be unable to provide complete and accurate consumer reports. For example, if a consumer 

pays off her car loan with ABC Bank but the bank does not update its records, it might report an 

outstanding balance for the consumer’s account. In such cases, the CRA has no way of knowing 

that the information in question is inapplicable to the consumer’s current creditworthiness.

Identity theft produces a similar type of inaccuracy. When an identity thief opens an 

account in a victim’s name, the account information will be reported to CRAs as if the account 

had been opened by the victim. Until the furnisher of the data discovers that the account is 

fraudulent, there is no way for either the furnisher or the CRA to identify the information in the 

victim’s credit file as incorrect.

A file may be incomplete because information was never furnished to a CRA. Some 

creditors do not furnish information to the CRAs at all, and some report to only one or two of the 

three national repositories.37 For instance, a regional retailer that sells some products on credit 

might furnish data about its credit accounts to only one CRA. The fact that some furnishers do 

not provide data to all three nationwide CRAs is one reason that many lenders, particularly in the 

mortgage industry, use reports from all three CRAs to evaluate a single consumer.

In addition, a creditor may deliberately withhold certain information for strategic reasons. 

For instance, some lenders, particularly subprime lenders, choose to withhold positive credit 

information about their customers to prevent their most profitable customers from receiving 

competing offers.38 Several years ago, a few large creditors stopped reporting credit limits for 

37. See Statement of Stuart K. Pratt, supra note 2, at 4.

38. See Robert B. Avery, Paul S. Calem & Glenn B. Canner, Credit Report Accuracy and Access to Credit, 

Federal Reserve Bulletin, Summer 2004, at 305, note 23 [hereinafter 2004 FRB Study]; and Comment of 

the Consumer Data Industry Association to the Federal Reserve Board, Sept. 17, 2004, at 4. Many creditors 

obtain lists of consumers from CRAs for the purpose of making firm offers of credit (often referred to as 

“prescreened offers”). By refraining from reporting positive data on their best customers, banks and other 

creditors can keep their competitors from “cherry picking” those customers through prescreened offers.
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many or all of their customers’ accounts. Again, this practice was apparently intended to prevent 

competitors from stealing the creditors’ customers.39

The three nationwide CRAs attempt to encourage full reporting, in some cases by refusing 

to sell consumer reports to creditors who do not furnish consumer data.40 Their ability to enforce 

such rules, however, is limited by competitive pressures; if a CRA refuses to sell consumer 

reports to a particular lender, that lender could simply turn to another CRA.

2. Assigning data to consumer files (file building)

There may also be problems with assigning data to the proper consumer files. When a 

CRA’s system fails to assign a consumer’s data correctly, it can create either a “mixed file” or a 

“fragmented file.” Mixed files are a source of inaccuracy, and fragmented files are a source of 

incompleteness.

• A “mixed file” refers to a file that contains information pertaining to more than one 

consumer. For example, if Tom Jones’s credit card account were contained in Tom Brown’s 

file, then Brown’s file would be described as a mixed file. 

• A “fragmented file” refers to a situation where more than one file in a CRA database exists 

for the same individual. For example, Frederick von Strong might conceivably have one 

file listed under “Frederick von Strong” and another listed under “Frederick V. Strong.”

These problems are most likely to occur when the right file is not easy to identify – typically 

when the identifying information the CRA receives from a data furnisher is not complete and 

accurate.41 For example, suppose a CRA receives information about a new credit account with 

the following identifying information:

K. Smith

111 First St.

Anytown, NJ 15555

Age: 26

Account No. 1234 5678

39. See 2003 FRB Study, supra note 2, at 58, note 18. A sample of consumer reports that FRB staff drew in June 

1999 revealed that approximately 70% were missing credit limits on one or more of their revolving accounts. 

In a sample drawn in June 2003, the percentage had dropped to approximately 14%, due to public and private 

efforts to encourage the reporting of credit limits. See 2004 FRB Study, supra note 37, at 306.

40. For example, at the end of 1999, TransUnion stopped selling consumer reports to subprime lenders that did 

not furnish data to TransUnion, and Equifax announced that credit card issuers that did not furnish credit limit 

information would not receive credit limit information from Equifax. See Lisa Fickenscher, Credit Bureaus 

Move Against Lenders That Withhold Info, American Banker (Dec. 10, 1999).

41. Sources of matching problems are discussed in more detail in section IV of this report. See infra page 35.
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The closest match in the CRA’s database might be:

Kevin Adam Smith

111 First St.

Anytown, NJ 15555

Age: 26

SSN: 111-11-1111

It is very likely that this is the right person, but it is not certain – the new account might 

belong to someone else (perhaps a spouse or sibling) with the same address, age, last name, 

and first initial. The misidentified person could be someone with no existing file (presumably 

someone with no credit history), or someone with an existing file who has recently moved to 

Kevin’s address.42

In developing their procedures for matching data to particular consumer files, the CRAs 

must decide what to do when matching information is incomplete. If the CRA does not add 

the account to Kevin’s consumer file, but instead creates a new file for “K. Smith,” then it is 

quite likely that this will be a fragmented (incomplete) file. If the CRA does add the account to 

Kevin’s file, there is the risk of creating a mixed (inaccurate) file. Although this risk might be 

relatively small, the CRAs receive billions of data updates each year.

43 Even a small probability 

of error can translate into a significant number of actual files with errors.

“File segmentation” strategies can also create fragmented files. Because of the serious 

consequences of a bad credit history, some consumers may attempt to manipulate the system to 

escape their existing credit history by applying for credit using identifying information that will 

not be matched to the existing file.44 CRAs have procedures to guard against manipulation of the 

system to some degree. However, when these safeguards fail and the deception succeeds, the 

consumer will create a new, significantly incomplete file.45

3. File retrieval

There may also be problems with file retrieval – that is, whether the CRA retrieves and 

sends the correct consumer’s report in response to an inquiry. For example, the CRA might send 

42. For example, suppose Kendra Jones recently married Kevin Smith, changed her last name to Smith, and 

moved to his address. In this case, there will be two people named K. Smith living at this address, but the 

CRA database will contain only one (at least until Kendra’s records have been updated). Possibilities such as 

this mean that the “best match” in the CRA’s database is not always the correct one.

43. See Statement of Stuart K. Pratt, supra note 2, at 4 (noting that “furnishers provide nearly 2 billion updates of 

information per month”).

44. For example, some “credit repair” organizations have advised consumers that they can establish a new credit 

identity by applying to the Internal Revenue Service for an Employer Identification Number, and then using 

this in place of the SSN when applying for credit. The Commission has brought enforcement actions to stem 

this practice. See FTC v. West Coast Publications, LLC, No. 99-04705GHK (C.D. Cal. 2000); see also Credit 

Repair Scammers Settle FTC Charges (FTC press release Mar. 9, 2000) available at http://www.ftc.gov/

opa/2000/03/id1.htm. Such schemes, as well as other credit repair strategies that abuse the credit reporting 

system, violate the Credit Repair Organizations Act, 15 U.S.C. § 1679.

45. FTC staff communication with CRA representatives.
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a single wrong report that pertains to the wrong person; might send multiple reports, one or more 

of which pertains to the wrong person; or might send no report when the consumer in fact has a 

file in the CRA’s system.

To see how this can happen, suppose a lender requests a consumer report using the 

identifying information for “K. Smith” from the example above. Faced with an uncertain match, 

the CRA must decide whether to provide a report based on Kevin Smith’s file or to provide no 

report at all (a “no-hit,” suggesting that no such consumer exists in its database). If the CRA

provides the report, and the applicant is not Kevin Smith, then the lender may process the 

application using the wrong consumer’s credit information. If the CRA does not provide the 

file, and the applicant is indeed Kevin Smith, then the creditor may deny credit in the belief that 

the applicant has no credit history.46 In other words, the matching procedures for retrieving files 

– like those for building files – involve a tradeoff between providing the wrong information 

(here, an entirely wrong file), and providing too little information (reporting a “no-hit” when a 

file in fact exists).

It is uncommon for the CRAs to send out a single consumer report that pertains to the 

wrong person. Suppose that person A and person B both have files in the CRA’s system, and that 

their identifying information is very similar. If person A applies for credit, the CRA may identify 

two files as being close matches, but it is very unlikely that person B’s file will be identified as 

a better match than person A’s file. The CRAs report a small number of complaints from users 

about receiving the wrong file; one reported that in 2003 it had fewer than 200 complaints of this 

type from subscribers.47

The case where a single wrong match seems most likely is when a credit applicant (person 

A) does not have a file in the CRA’s database, but there is someone else in the database (person 

B) with very similar identifying information. In this case, person B’s file will be identified as the 

best match, and if the match is close enough, the CRA might provide a report on B even though 

the correct outcome would be a no-hit.48 If a given consumer does have a file in the CRA’s 

46. In either case, the potential harm to Kevin (or to Kendra, if she is the K. Smith applying for credit) depends 

on the actions of the user of the consumer report. If the user receives the wrong person’s file, he or she may 

notice the discrepancy and investigate further, rather than simply denying credit. If the user receives no report, 

he or she may request a report again, this time using more complete information.

47. FTC staff communications with CRA representatives. In many cases neither the consumer nor the creditor 

might notice if the wrong file is furnished. For example, where credit decisions are highly automated – 

essentially constituting a “yes” or “no” determination – the person processing the application may not examine 

any information from the consumer’s file apart from whether the application was approved. Particularly if 

the answer is “yes,” there may be little incentive for anyone to check whether the report in fact pertains to the 

right person. It is also possible that users will realize they received the wrong report, perhaps because they 

made the inquiry based on insufficient information, and will simply resubmit the request with more complete 

information. In these cases, the CRA might not receive a complaint, but there also would be no effect on the 

consumer’s application for credit if the correct file is ultimately furnished. 

48. A case that appears to fit this description is that of Jason Turner v. Equifax Credit Information Services, Inc, 

No. CV 02-J-0787-S (N.D. Ala. filed Mar. 28, 2002). See Evan Hendricks, Credit Scores & Credit Reports: 

How the System Works, What You Can Do 145 (2004). According to Hendricks, when Turner applied for 

his first credit card, Equifax furnished the report of another person with the same name and a similar SSN. 

Moreover, Turner was unable to correct the problem through the dispute process because he had no file in the 

CRA’s database that could be corrected. 
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system (and applies for credit using his own identifying information), then it is quite unlikely 

that the CRA will provide the wrong file. 

In determining which file to return, the CRA could also return multiple consumer reports 

on the same consumer. This might happen when a subscriber’s inquiry seems to match more 

than one file in the CRA’s system. For example, the CRA might have a file for “Kevin Smith” 

and another file for “K. Smith.” The CRA knows that this might represent a fragmented file, 

but may not be confident enough to merge the two files. If a subscriber requests a report for 

“Kevin Smith,” the CRA might return two reports, one based on the “Kevin Smith” file and one 

based on the “K. Smith” file. This would give the user an opportunity to consider information 

that probably pertains to Kevin Smith, but also signals that the CRA is not entirely confident of 

the match. Sending out the second file also allows the CRA to provide information that might 

otherwise be missed, without permanently mixing that information with other data known to 

pertain to the consumer (and thus risking creation of a “mixed file”). 

In this case, there is a reasonable chance that one of the reports pertains to the wrong 

consumer. If one report is wrong, and the report’s user does not discover the error, the 

consumer’s application for credit might be adversely affected.

Only one of the nationwide CRAs currently has a policy of sending out multiple files in 

response to a single request.49 Another changed its system in August of 2004 in such a way that 

it never sends out multiple files, and the third stopped sending out multiple files within the last 

several years. The CRA that supplies multiple reports in response to a single inquiry says that its 

system identifies multiple matches in response to fewer than 4% of inquiries and that it sends out 

multiple reports only when the subscriber making the inquiry asks to see them all.50 This CRA 

reports that it actually sends out multiple reports in response to fewer than 1% of inquiries.51

D. The Accuracy and Completeness Requirements of the FCRA52

The FCRA contains a number of important requirements relating to the accuracy of 

consumer reports, including requirements imposed when the FCRA was enacted in 1970 and 

those added by the 1996 amendments and the FACT Act. In general, these requirements use two 

49. FTC staff communication with CRA representatives.

50. Fiserv/Chase Credit Research, a reseller of consumer reports, provided data to the FTC that independently 

confirm that this CRA furnishes multiple files in about 4% of cases. This estimate comes from a sample of 

consumer reports provided to mortgage lenders by the three nationwide CRAs.

51. FTC staff communication with CRA representatives. As noted above (supra note 50), data provided by Fiserv/

Chase Credit Research indicates that the CRA in question provides multiple reports to the mortgage industry 

in 4% of cases. Because mortgage lenders may be more likely than other users to request multiple files, the 

4% figure is not necessarily inconsistent with the reported aggregate figure of 1% for all inquiries. For further 

discussion of the issue of multiple files, see infra page 57.

52. As noted supra note 10, the term “completeness” has one meaning under the FCRA and a different meaning 

for purposes of this Report. “Completeness” under FCRA § 611 refers to the sufficiency of the information 

in specific items in the consumer’s file, whereas the “completeness” addressed in this Report refers to the 

quantity of information in a consumer’s file and whether relevant transactions have been included. To avoid 

confusion, the discussion in this section (and in part E, below) will use the term “accuracy” to encompass both 

the “accuracy” and “completeness” provisions of the FCRA. 
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major avenues to promote accuracy. First, the FCRA establishes mechanisms for consumers 

to learn about possible errors in their consumer reports and have them corrected. Second, the 

FCRA provides that CRAs must follow “reasonable procedures to assure maximum possible 

accuracy of the information” they report.53

Section 609 of the FCRA is one of the key mechanisms for ensuring that consumers 

learn about errors. It gives consumers the right to request all of the information in their files 

(except risk scores), as well as the identity of all recipients of their report for the last year 

(two years in employment cases).54 Often, a consumer first learns about his or her ability to 

request this information after a creditor or other consumer report user denies the consumer’s 

credit application or takes some other “adverse action” and provides a notice to the consumer 

under Section 615 of the FCRA.55 That provision requires users of consumer reports to notify 

consumers of any adverse action based in whole or in part on information in a consumer 

report, and to provide consumers with certain key information, including (1) the identity of the 

consumer reporting agency from which the creditor obtained the report; (2) the right to obtain a 

free copy of the report; and (3) the right to dispute the accuracy of information in the report.56 

Once a consumer has reviewed his or her report and identified what the consumer believes 

is an error, Section 611 gives the consumer a right to dispute the error and, depending on the 

outcome of the dispute, to have the error corrected.57 The consumer initiates a dispute by 

notifying the CRA. The investigation of the dispute includes consideration by the CRA of “all 

relevant information” submitted by the consumer, which the CRA must also provide to the 

original furnisher of the disputed information for review by the furnisher. The CRA generally 

has 30 days to complete its investigation, after which it must record the current status of the 

information, or delete it if it is found to be inaccurate or unverifiable, and then report the results 

53. By its terms (“reasonable procedures . . . maximum possible accuracy”), the statute itself recognizes that 

absolute accuracy is, as a practical matter, impossible. FCRA § 607(b), 15 U.S.C. § 1681e(b) (emphasis 

added). 

54. 15 U.S.C. § 1681g.

55. 15 U.S.C. § 1681m. In the original FCRA, adverse action notices were required only when “credit or 

insurance . . . or employment . . . is denied or the charge for such credit or insurance is increased . . . .” In 

the 1996 amendments, Congress required adverse action notices when consumer reports are used in other 

situations, such as opening savings or checking accounts, apartment rentals, and retail purchases by check. 

The 1996 amendments also included others changes affecting the scope of “adverse action” in credit, 

insurance, and employment transactions. See FCRA § 603(k), 15 U.S.C. § 1681a(k).

56. FCRA Section 612 provides that CRAs must provide a free disclosure if a consumer makes a request within 

60 days of receipt of an adverse action notice, and may charge a fee (currently nine dollars) in other cases. 15 

U.S.C. § 1681j. Under the FACT Act, consumers now also have a right to obtain a free annual file disclosure 

from each of the nationwide CRAs through a “centralized source.” FACT Act § 211, codified at 15 U.S.C. 

§ 1681j(a). Under the Commission’s rule implementing this requirement, the centralized source will first 

be available to some consumers beginning December 1, 2004, and available to all consumers by September 

1, 2005. See Free Annual File Disclosures; Final Rule, 69 Fed. Reg. 35,468 (June 24, 2004) (codified at 

16 C.F.R. parts 610 and 698). See also http://www.ftc.gov/os/2004/05/040520factafrn.pdf and http://www.

ftc.gov/os/2004/06/040624factafreeannualfrn.pdf. The FTC and Federal Reserve Board are charged under 

Section 313(b) of the FACT Act to study how CRAs and furnishers handle consumer disputes. The agencies’ 

report will be submitted to Congress under separate cover.

57. 15 U.S.C. § 1681i.
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of the investigation to the consumer.58 If the investigation does not resolve the dispute, the 

consumer may file a statement with his or her version of the facts, which must then be included 

in any subsequent consumer report that includes the disputed item.59

Since 1996, and as supplemented by the FACT Act, the FCRA has also imposed certain 

accuracy and reinvestigation duties on furnishers of information to CRAs. These requirements 

recognize that furnishers – the original source of the information – have a critical role to play 

in the overall accuracy of consumer report information. Thus, Section 623 of the FCRA now 

requires furnishers to investigate disputes received from CRAs and to correct and update 

information provided to CRAs that they later learn is inaccurate. In certain instances, after 

implementing regulations are issued, furnishers will also be required to investigate and respond 

to disputes made directly to them by consumers regarding the accuracy of their information.60

E. FTC Efforts to Promote Compliance with the FCRA Accuracy 

Requirements 

Since the FCRA was first enacted in 1970, the Commission has made significant efforts 

to promote compliance with the law’s accuracy requirements. Such efforts have included law 

enforcement, business and consumer education, informal legal interpretive and other guidance, 

and rulemakings to implement FCRA amendments. 

The Commission’s law enforcement efforts have included cases61 to ensure: (1) compliance 

with the adverse action notice requirements on the part of creditors,62 employers,63 and 

58. To address the problem of recurring errors, the FCRA prohibits CRAs from reinserting into a consumer’s 

credit file previously deleted information without first obtaining a certification from the furnisher that the 

information is complete and accurate, and then notifying the consumer of the reinsertion. 15 U.S.C. § 

1681i(a)(5).

59. Disputed information is utilized by most credit scoring models.

60. 15 U.S.C. § 1681s-2.

61. A significant majority of the complaints cited herein that the Commission has brought alleging FCRA 

violations were settled by entry of a consent order. Additionally, administrative cases (generally those cases 

in the following footnotes with an “F.T.C.” reporter citation) sunset after twenty years. Those administrative 

cases that antedate 1984 are cited here to show the range and magnitude of Commission enforcement activity.

62. See, e.g., Hospital & Health Services Credit Union, 104 F.T.C. 589 (1984); Associated Dry Goods Corp., 105 

F.T.C. 310 (1985); Wright-Patt Credit Union, 106 F.T.C. 354 (1985); Federated Dep’t Stores, 106 F.T.C. 615 

(1985); FTC v. Winkleman Stores, Civ. No. C 85-2214 (N.D. Ohio 1985); FTC v. Strawbridge & Clothier, 

Civ. No. 85-6855 (E.D. Pa. 1985); FTC v. Green Tree Acceptance, Civ. No. CA 4 86 469 K (M.D. Tex. 1988); 

Quicken Loans Inc., D-9304 (FTC Decision and Order Apr. 8, 2003). See also FTC v. Aristar, Inc., Civ. No. 

C-83-0719 (S.D. Fla. 1983); FTC v. Allied Finance Co., Civ. No. CA3-85-1933F (N.D. Tex. 1985); FTC v. 

Norwest Fin., Inc., Civ. No. 87 06025R (C.D. Cal. 1987); FTC v. City Fin. Corp., Civ. No. 1:90-cv-246-MHS 

(N.D. Ga. 1990); FTC v. Tower Loan of Mississippi, Civ. No. J90-0447 (J) (S.D. Miss. 1990); FTC v. Barclay 

American Corp., Civ. No. C-C-91-0014-MU (D.N.C. 1991); FTC v. Academic Int’l, Civ. No. 91-CV-2738 

(N.D. Ga. 1991); FTC v. Bonlar Loan Co., Civ. No. 97C 7274 (N.D. Ill. 1997); FTC v. Capital City Mortgage 

Corp., Civ. No. 1:98CV00237 (D.D.C. 1998). 

63. See, e.g., Electronic Data Systems, 114 F.T.C. 524 (1991); Kobacker Co., 115 F.T.C. 13 (1992); Keystone 

Carbon Co., 115 F.T.C. 22 (1992); McDonnell Douglas Corp., 115 F.T.C. 33 (1992); Macy’s, Inc.,115 F.T.C. 
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telecommunications providers;64 (2) compliance with the privacy and accuracy requirements 

by the nationwide CRAs;65 (3) compliance with the FCRA’s dispute provisions by resellers of 

consumer reports (agencies that purchase consumer reports from the major CRAs and resell 

them);66 and (4) compliance with respect to consumer reports used in non-credit transactions.67

Recent actions have also focused on the new accuracy provisions added by the 1996 

amendments. For example, the Commission settled cases with the three nationwide CRAs, 

charging that they failed to comply with the new requirement that they establish a toll free 

number, with “personnel accessible” during normal business hours to answer consumers’ 

questions about their consumer reports.68 In addition, the Commission has settled cases against 

furnishers of information to CRAs alleging that they knowingly reported inaccurate information 

to the CRAs in violation of the new furnisher provisions added by the amendments.69 The 

Commission also aggressively pursues businesses engaging in fraudulent “credit repair” – by 

43 (1992); Marshall Field & Co., 116 F.T.C. 777 (1993); Bruno’s, Inc., 124 F.T.C. 126 (1997); Aldi, Inc., 124 

F.T.C. 354 (1997); Altmeyer Home Stores, Inc., 125 F.T.C. 1295 (1998); U.S. v. Imperial Palace, Inc., Civ. No. 

CV-5-04-0963-RLH-PAL (D. Nev. 2004).

64. See, e.g., U.S. v. AT&T Corp., No. 04-4411(SRC) (D.N.J. 2004); U.S. v. Sprint Corp., No. 4:04 CV 361 RH/

WCS (N.D. Fla. 2004).

65. See, e.g., TransUnion Credit Info. Co., 102 F.T.C. 1109 (1983); FTC v. TRW, Inc., 784 F. Supp. 361 (N.D. Tex. 

1991); Equifax Credit Info. Services, Inc., 130 F.T.C. 577 (1995). Each of these “omnibus” orders differed 

in detail, but generally covered a variety of FCRA issues including accuracy, disclosure, and permissible 

purposes.

66. See First American Real Estate Solutions, LLC, 127 F.T.C. 85 (1999) (consent with a reseller concerning the 

dispute obligations of CRAs). 

67. Howard Enterprises, Inc. 93 F.T.C. 909 (1979) (bad check lists); Equifax, Inc. (formerly Retail Credit 

Company), 96 F.T.C. 844 (1980) (investigative consumer reports); MIB, Inc., 101 F.T.C. 415 (1983) (medical 

information reports).

68. See FCRA § 609(c)(1), 15 U.S.C. § 1681g(c)(1). The complaints in these cases alleged that the CRAs failed 

to maintain adequate personnel, resulting in busy signals, excessive hold times, and the blocking of consumer 

calls from particular locations. The orders require the CRAs to maintain adequate personnel, establish 

auditing requirements to ensure future compliance, and pay a total $2.5 million in FCRA civil penalties. See 

FTC v. Equifax Credit Info. Services, Inc., No. 1:00-CV-0087 (N.D. Ga. 2000); FTC v. Experian Mktg. Info. 

Solutions, Inc., No. 3-00CV0056-L (N.D. Tex. 2000); FTC v. TransUnion LLC, 00C 0235 (N.D. Ill. 2000); 

see also U.S. v. Equifax Credit Info. Servs., Inc., Civ. No. 1:0-CV-0087-MHS (N.D. Ga. 2003) ($250,000 

violation of consent decree).

69. See FTC v. NCO Group, Inc., 2004 WL 1103323 (E.D. Pa. 2004) (providing inaccurate delinquency dates; 

$1.5 million civil penalty); U.S. v. Fairbanks Capitol Corp., Civ. Action No. 03-12219 DPW (D. Mass. 

2003) (furnishing information to a CRA knowing or consciously avoiding knowing that the information is 

inaccurate); FTC v. DC Credit Servs., Inc., No. 02-5115 (C.D. Cal. 2002) (furnishing information to a CRA 

knowing or consciously avoiding knowing that the information is inaccurate, failing to notify and provide 

corrections to CRAs when previously-reported information found to be inaccurate, failing to provide accurate 

delinquency dates, failing to report accounts as “disputed”; $300,000 civil penalty); FTC v. Performance 

Capital Mgmt., Inc., 2:01cv1047 (C.D. Cal. 2000) (providing inaccurate delinquency dates, failing to properly 

investigate disputes, failure to report accounts as “disputed”; $2 million civil penalty).
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frivolously or fraudulently disputing accurate information in CRA databases, unscrupulous credit 

repair firms can degrade the accuracy and quality of information in credit reports.”70

The FTC also promotes compliance with the accuracy requirements by educating businesses 

and consumers about the FCRA. For example, the Commission’s FCRA Commentary71 and Staff 

Opinion Letters72 interpret the FCRA and provide concrete and specific guidance to businesses 

regarding the FCRA’s accuracy provisions. Further, various business publications, available 

on the FTC’s website and in print, provide guidance on the responsibilities of furnishers73 and 

users of consumer reports74 with respect to these provisions. In addition, the FTC continues to 

educate consumers about the FCRA and, in particular, the various mechanisms available to them 

for identifying and correcting inaccuracies in their reports. The agency’s consumer publications 

include: Your Access to Free Credit Reports,

75 which provides an overview of consumer rights 

under the FCRA; Credit Scoring,

76 which explains the system creditors use to determine whether 

to grant consumers credit; Building a Better Credit Record,

77 which teaches consumers how to 

legally improve their consumer reports, deal with debt, and spot credit-related scams; Credit 

Repair: Self-Help May Be Best,

78 which explains how to improve your creditworthiness and lists 

legitimate resources for low or no cost help; and How to Dispute Credit Report Errors,

79 which 

explains how to dispute and correct inaccurate information on a consumer report and includes a 

sample dispute letter. 

70. See, e.g., FTC v. ICR Servs., Inc., Civ. No. 03-C-5532 (N.D. Ill. filed Aug. 8, 2003) ($1.15 million in 

consumer redress), available at http://www.ftc.gov/opa/2003/08/nationwide.htm. The Commission also has 

conducted several sweeps of fraudulent credit repair operations, including Operation Eraser (1998, 21 FTC 

enforcement actions and 11 companion actions brought by state attorneys general and the U.S. Department of 

Justice), Operation New ID - Bad Idea I (1999, 22 FTC enforcement actions and 14 actions brought by fellow 

law enforcement agencies), Operation New ID - Bad Idea II (1999, eight FTC enforcement actions and eight 

actions brought by fellow law enforcement agencies).

 Under section 404 of the Credit Repair Organizations Act, “[n]o person may make any statement, or counsel 

or advise any consumer to make any statement, [to a CRA] which is untrue or misleading with respect to any 

consumer’s credit worthiness, credit standing, or credit capacity . . . [or] the intended effect of which is to alter 

the consumer’s identification to prevent the display of the consumer’s credit record, history, or rating for the 

purpose of concealing adverse information that is accurate and not obsolete.” 15 U.S.C. § 1679b.

71. 16 C.F.R. Part 600.

72. Available at http://www.ftc.gov/os/statutes/fcra/index.htm.

73. See Credit Reports: What Information Providers Need to Know, available at http://www.ftc.gov/bcp/conline/

pubs/buspubs/infopro.htm.

74. See Using Consumer Reports: What Employers Need to Know, available at http://www.ftc.gov/bcp/conline/

pubs/buspubs/credempl.htm.

75. http://www.ftc.gov/bcp/conline/pubs/credit/freereports.htm.

76. http://www.ftc.gov/bcp/conline/pubs/credit/scoring.htm.

77. http://www.ftc.gov/bcp/conline/pubs/credit/bbcr.htm.

78. http://www.ftc.gov/bcp/conline/pubs/credit/repair.htm.

79. http://www.ftc.gov/bcp/conline/pubs/credit/crdtdis.htm.
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Finally, the Commission is currently engaged in implementing a host of new FCRA 

provisions, adopted as part of the FACT Act. As these provisions become effective, they 

should further enhance the accuracy of consumer reports. Among other things, they include a 

number of measures designed to improve the rigor of the dispute and reinvestigation process.80 

Also, consumers now have the right to a free annual file disclosure, which may encourage 

more consumers to check their consumer reports regularly for errors.81 In addition, a number 

of the FACT Act’s identity theft provisions promise to improve the prevention, detection, 

and remediation of identity theft, a significant source of inaccuracies in consumer reports, by 

imposing new duties on CRAs,82 creditors,83 merchants,84 furnishers,85 and debt collectors.86 

There are also new furnisher duties, including rules that will require furnishers to have 

reasonable procedures to ensure accuracy,87 and a right for consumers to submit certain disputes, 

as will be determined by regulation, directly to a furnisher rather than going through a CRA.88 

Further, creditors will provide a new “risk-based pricing” notice when they offer credit on 

materially less favorable terms based on information in consumer reports.89 Consumers will be 

able to request and obtain their credit scores from the CRAs and, in certain situations, creditors.90 

Finally, the FTC has implemented a new complaint referral system pursuant to the FACT 

Act91 under which consumer complaints to the FTC regarding the accuracy of consumer report 

80. See FACT Act § 314 (CRAs must report to furnishers results of reinvestigations; furnishers must modify 

records upon completion of reinvestigation); § 316 (reseller must refer reinvestigation to repository); § 317 

(CRA reinvestigations must be reasonable).

81. See Free Annual File Disclosures, 69 Fed. Reg. at 35,468.

82. See FACT Act § 112 (fraud alerts and active duty alerts); § 315 (must report address discrepancy to users 

of consumer reports); § 115 (truncation of social security number in consumer file disclosures); and § 152 

(blocking of information resulting from identity theft).

83. See, e.g., FACT Act § 114 (requiring procedures to identify and respond to identity theft “red flags”); and § 

112 (requiring creditors to check fraud alerts before granting credit, increasing credit limit, or issuing another 

card).

84. See, e.g., FACT Act § 113 (credit and debit card truncation).

85. See FACT Act § 154 (prohibition on “repolluting” credit reports with identity theft related trade lines; 

prohibition on selling, transferring, or placing for collection identity theft debts after being notified of block by 

consumer reporting agency).

86. See FACT Act § 155 (must report identity theft to creditor; must share information with identity theft victims).

87. See FACT Act § 312.

88. See FACT Act § 312.

89. See FACT Act § 311.

90. See FACT Act § 212.

91. See FACT Act § 313(a).
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information92 will be forwarded to the three major CRAs. The CRAs will review the complaints, 

correct the files if necessary, and report the results to the FTC.93

The FTC will continue these efforts to ensure that all of those who play a role in the 

consumer reporting system – CRAs, furnishers of consumer information, users of consumer 

reports, and consumers – contribute to the accuracy of the data stored within it. 

F. Prior Studies of Accuracy and Completeness

Several empirical studies have already been conducted relating to the accuracy and 

completeness of consumer report data. FTC staff reviewed these studies, both to gain a better 

understanding of the issues and to develop the Commission’s own methodology for measuring 

the levels of accuracy and completeness in consumer reports.

One category of study, the consumer survey, asks consumers to review their own 

consumer reports and identify errors; the consumer’s perception and recollection is the basis 

for determining accuracy. These studies find a high rate of error in consumer reports. A second 

category uses CRA dispute data as a proxy for accuracy. Using statistics from the consumer 

reporting industry about how often consumers dispute information in their consumer reports and 

how often the disputes result in changes to the consumers’ credit files, these studies generally 

conclude that there is a low rate of error. A third category analyzes anonymous data supplied 

by several different CRAs to look at information about the same consumer. These studies find 

differences across consumer reports maintained by each CRA for the same consumer and within 

individual consumer reports; they also identify problems with incomplete and missing data. 

As described in greater detail below, each of these approaches can provide some useful 

information about the accuracy and completeness of consumer report information, but none 

provides a comprehensive view.94 Indeed, accuracy is a complex issue and presents challenges 

in defining and identifying errors. To determine fully whether information in a consumer 

report is accurate and complete takes the cooperation of consumers, who are the best or only 

source for identifying certain kinds of errors, such as an account that does not belong to them; 

data furnishers, who can verify or refute what a consumer believes to be true about a particular 

account; and the CRAs, the repositories for consumer report data. None of the existing studies 

92. The FTC collects complaints from consumers to identify important or emerging consumer protection 

issues and to target its law enforcement and education efforts. Its complaint databases include a number of 

complaints alleging consumer report inaccuracies. Although valuable as barometers of possible violations, 

these complaints alone do not necessarily indicate whether a serious problem with credit file inaccuracies 

exists, because the complaints are both underinclusive and overinclusive. Some consumers whose credit files 

contain inaccuracies never complain to the FTC; some who do complain mistakenly believe that accurate 

information in their files is inaccurate.

93. Additional information available at http://www.ftc.gov/opa/2004/04/cra.htm.

94. As noted above, in June 2004, the FTC’s Bureau of Economics held a roundtable discussion with researchers, 

scholars, and practitioners in the consumer reporting industry to review the methodologies that assess 

accuracy and completeness of consumer reports, including the empirical studies discussed here. Many of the 

points discussed here were discussed at the roundtable. A transcript of the proceedings is available on the 

Commission’s website at http://www.ftc.gov/be/workshops/.
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relies on the participation of all of these three key stakeholders. Rather, each relies on different 

sources to draw conclusions about accuracy. 

1. Consumer surveys: consumer review of their own consumer reports

The U.S. Public Interest Research Group (“US PIRG”) and Consumers Union have each 

conducted studies that asked consumers to review their own consumer reports for errors. 

Generally, these studies suggest high error rates. For example, the 2000 Consumers Union study 

(which was based on 63 consumer reports obtained by 25 Consumers Union employees and 

family members) reported that more than half of the reports had an error “with the potential to 

derail a loan or deflect an offer for the lowest-interest credit card.”95 The study cited examples 

of mismatched files, misattributed debts, and inconsistencies in files across the three nationwide 

CRAs. US PIRG has also conducted consumer surveys on consumer report accuracy and 

completeness, and similarly concluded that many consumer reports contain mistakes.96 

a. US PIRG study’s findings 

US PIRG’s most recent study, released in June 2004, was based on consumers reviewing 

their own consumer reports for errors; it updated a similar study conducted in 1998.97 PIRG 

sent email messages to its members requesting their voluntary participation in a study about 

the accuracy of consumer reports. PIRG staff, family, and friends participated in the study as 

well. The total sample for the study included 154 adults who completed 197 surveys (a survey 

was completed for each CRA that provided a consumer report; some participants requested their 

report from more than one CRA). The participants were in 30 states and ranged in age from 20 

to 81. 

The 2004 US PIRG study reported that:

• One in four (25%) of the consumer reports surveyed reportedly contained “serious” errors 

that could result in the denial of credit or other adverse consequences. Such errors included 

accounts incorrectly marked delinquent; accounts inaccurately listed as being in collection; 

accounts that did not belong to the consumer; and bankruptcies, tax liens, and other 

judgments that did not belong to the consumer or were incorrectly listed as open.

95. Credit Reports: How do Potential Lenders See You?, ConsumerReports.org, July 2000.

96. See Jon Golinger, PIRG: Mistakes Do Happen: Credit Report Errors Mean Consumers Lose, (Mar. 1998); 

National Association of State PIRGs, Mistakes Do Happen: A Look at Errors in Consumer Credit Reports

(June 2004) [hereinafter 2004 US PIRG Study]. Both of these reports are available at http://www.uspirg.org.

97. The 1998 survey was based on 133 consumer reports obtained by 88 US PIRG employees and affiliates who 

were asked to check their own consumer reports. The study reported that 70% of all reports contained some 

mistake, and 29% contained false delinquencies or accounts that did not belong to the consumer. The report 

also described difficulties that participants experienced in acquiring copies of their reports, including busy 

signals, long waits to receive reports, or reports never being sent. As noted above, the FTC subsequently 

investigated the three nationwide CRAs and settled charges that they violated the FCRA by failing to maintain 

a toll-free telephone number at which personnel were accessible to consumers during normal business hours. 

See supra note 65.
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• More than half (54%) of the consumers surveyed reported that they found inaccurate 

personal identifying information in their consumer reports, such as name misspellings, 

inaccurate birth dates, out-of-date addresses listed as current, and incorrect addresses.

• Over one-fifth (22%) of the consumer reports surveyed listed a mortgage or loan twice.

• Almost one-third (30%) of the consumer reports surveyed contained an account that the 

consumer claimed had been closed but remained listed as open.

• Approximately one in twelve (8%) of the consumer reports surveyed reportedly 

were missing major credit, loan, mortgage, or other accounts that demonstrated the 

creditworthiness of the consumer.

• In total, nearly eight out of ten (79%) of the consumer reports surveyed reportedly contained 

some error.

b. Comments on consumer surveys

In its 2003 review of data about consumer report errors, the GAO concluded that the 

consumer survey research was of limited value in determining the frequency of errors in 

consumer reports.98 As the GAO noted, the surveys did not use a statistically representative 

sample and counted any inaccuracy as an error, regardless of the impact the error might have.99

In response to these studies, the Consumer Data Industry Association (“CDIA”) has argued 

that many of the inaccuracies identified in consumer survey research are either unimportant to 

the credit rating decision (such as certain errors in personal identifying information), or are not 

errors at all.100 The CDIA asserts that consumers frequently make mistakes when evaluating 

their reports – for example, not recognizing an account because the original lender has sold the 

loan to another entity; believing that an account status is erroneous when it simply has not yet 

been updated; or not understanding that certain events, like a bankruptcy, may be reported for 

a number of years after the occurrence. Because consumers do not fully understand how the 

consumer reporting industry works, the CDIA maintains, they may perceive information to be 

erroneous when it is not. 

Despite these limitations, these studies are able to capture certain errors – like an account 

that does not belong to the consumer – that may be very important to consumers and to their 

credit rating, and that generally can be identified only by the consumer. Further, the studies are 

good indicators of what consumers perceive to be errors and topics for which further consumer 

education might be useful.

98. General Accounting Office, Report No. GAO-03-1036T, Consumer Credit: Limited Information Exists on 

the Extent of Credit Report Errors and their Implications for Consumers (July 31, 2003) [hereinafter “GAO 

Report”]. As the title of the report indicates, the GAO concluded that there was a lack of comprehensive 

information regarding the accuracy of consumer reports. Although the GAO report did not consider US 

PIRG’s 2004 study, it did consider US PIRG’s 1998 study, which used a similar approach.

99. The 2004 US PIRG study presents the same limitations.

100. See Statement of Stuart K. Pratt, supra note 2.
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2. Dispute data: records of CRAs and furnishers of information

The consumer reporting industry has looked at dispute data as a measure of consumer report 

accuracy. There are two main sources of information about consumer disputes. The first is a 

1992 Arthur Andersen study conducted on behalf of the Associated Credit Bureaus (now the 

CDIA).101 The Andersen study considered a sample of consumers who were denied credit and 

tracked how many disputed information in their reports and whether reinvestigation by furnishers 

and reevaluation by creditors resulted in a different credit decision. The second source is a set of 

more recent summary statistics related to disputes provided by the CDIA, which can also be used 

to make approximate inferences about accuracy.

a. Arthur Andersen 1992 study

The ACB Consumer Information Foundation commissioned Arthur Andersen & Company 

to perform a study about consumer report accuracy. The study requested five creditors to provide 

a list of all credit applicants who had been declined credit and received a notice of adverse action 

for a three-month period in 1991. Of these 111,770 applicants, a random sample of 15,703 credit 

applicants was selected for the study. The study then asked the CRAs to review the credit files of 

the individuals in the sample and determine whether the credit applicant had requested a copy of 

his or her consumer report, and if so, whether he or she disputed the accuracy of any information 

in the report. For those consumers who had disputed information in their files, Andersen asked 

the creditors to reevaluate the files, to see whether there was a correction made that affected the 

initial credit decision.

The Andersen study reported that:

• Of the 15,703 consumers who were denied credit and received an adverse action notice, 

1,223 (8%) requested a copy of their consumer report.

• Of the 15,703 consumers who were denied credit and received an adverse action notice, 304 

(2%) disputed information contained in their report.102

• All 304 files were reinvestigated, and at the time of Andersen’s report, 267 of these had been 

reevaluated by the credit grantors.103 Of the 267 files that were reevaluated, 36 resulted in 

a reversal of the original decision to deny credit. Thus, Andersen concluded that less than 

101. The complete study is proprietary and was not made available publicly. The key findings of the report were 

summarized by ACB in an Executive Summary on February 4, 1992, which Andersen verified.

102. Another way to look at this data is that approximately 25% of all consumers who received an adverse action 

notice and requested a copy of their report disputed information contained in their report.

103. No information was provided about the 37 files that had not been reevaluated by the time of the study.
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3% of consumers who requested a copy of their consumer report would have received a 

different result.104

b. 2003 CDIA statistics 

In testimony to Congress in July 2003, the CDIA reported industry-wide data from its 

nationwide consumer reporting system members. The CDIA estimated that approximately 16 

million consumer reports are disclosed to consumers each year. The majority of these – 84% – 

are in response to adverse action notices. The CDIA further estimated that of the 16 million file 

disclosures issued annually to consumers, about half of the consumers (8 million consumers) do 

not contact the CRAs again. Of those who do, about half (4 million consumers) have a question, 

and half have a dispute.

The CDIA estimated the breakdown of dispute results as follows105:

• 46% of disputes result in the original information being verified as reported.

• 27% of disputes result in the information being modified per furnisher instructions.

• 10.5% of disputes result in the information being deleted per furnisher instructions.

• 16% of disputes result in the information being deleted due to the expiration of the 30-day 

limit on dispute resolution.

Thus, at least 46% of files that are disputed are in fact, according to the furnisher, correct 

and not inaccurate. Although this suggests that the error rate in disputed files would be 54%, 

the CDIA argues that in the second and fourth categories listed above, it is not clear whether 

there is an actual error. In the second category, the modification might be an update to account 

information, rather than a correction. For example, a consumer in the process of applying for 

a mortgage might pay down a credit card, then immediately dispute the account balance with 

the CRA (rather than wait for the next routine monthly update by the card issuer) in order to 

improve a credit score. In the fourth category, the deletion may have occurred because the 

furnisher ran out of time in its reinvestigation, not because an error was identified.106 Thus, it 

104. In a paper on the FCRA and accuracy, professors Michael Staten and Fred Cate claim that the Andersen 

study’s finding that less than 3% (36/1223) of consumers would have achieved a different credit decision after 

reviewing and disputing information in their consumer report is likely an upper bound for the error rate. They 

argue that by focusing on consumers who received adverse notices and requested copies of their reports, the 

study methodology was biased toward finding a higher error rate than that for the entire population – as these 

are the consumers most likely to have data in their file that would trigger a negative decision and most likely 

to find any errors. See Staten & Cate, supra note 17, at 37. On the other hand, the study made no findings 

about the error rate for 92% of its sample – those consumers who received adverse action notices but did not 

request a copy of their consumer reports.

105. These statistics represent the first three quarters of 2002. GAO reports that CDIA officials explained that, in 

providing this data, each CRA reported data from a different quarter. See GAO Report, supra note 97, at 8.

106. The CDIA warned that phony “credit repair” agencies, which encourage consumers to dispute accurate, 

derogatory information that might be deleted if the dispute process takes more than thirty days, may be at 

least partially responsible for some of these deletions. As noted above, the FTC and other law enforcement 

agencies have taken action against such scams. See supra note 67.
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can be concluded that for between 10.5% and 54% of disputes, the furnisher agrees that there 

is an error. Combined with the estimate of approximately four million disputes each year, this 

would mean that approximately 400,000 to two million errors are corrected through consumer 

review of their credit files, or that an estimated 2.5% to 12.5% of consumer file disclosures lead 

to correcting of errors.

c. Comments on dispute data

As the GAO Report found, the dispute data studies also have serious limitations in 

providing a meaningful measure of the frequency of errors in consumer reports. The GAO 

noted that no methodology was provided for the Andersen study or for the statistics cited by 

the CDIA.107 Further, as the GAO pointed out, the Andersen study excluded a potentially large 

number of errors, because it considered only cases in which a loan was denied and an adverse 

action notice provided. This approach provides no information about errors that may exist in the 

consumer reports of consumers who did not receive adverse action notices and those who were 

not currently seeking a loan.

The dispute data is valuable because it focuses on an important segment of the population – 

consumers who have been denied credit108 – and how often significant errors occurred. As a way 

to measure the overall accuracy and completeness of consumer reports, however, the approach 

relies on assumptions about whether those consumers who receive copies of their reports are 

representative of the population as a whole. It also relies on the assumption that every consumer 

who receives a report with an important error or omission identifies the problem and disputes it. 

This approach also treats the data furnisher as the final arbiter of whether information is correct. 

Finally, neither of these studies provides information about the type or significance of the error 

found.

3. Anonymous data: analyzing consumer reports about the same consumer

A third approach in studying the accuracy and completeness of consumer reports looks 

at large samples of anonymized consumer reports (consumer data from which all identifying 

information has been stripped) for patterns pertaining to credit information, creditors, and 

information reported across CRAs. Although this approach does not involve consumer 

assessment and thus cannot identify whether a particular item in a consumer report is erroneous, 

it does provide valuable information about the completeness and consistency of consumer report 

data. One such study, conducted in 2002 by the Consumer Federation of America together with 

the National Credit Reporting Association (“the CFA study”), examined credit information about 

the same consumers across CRAs, and in particular looked at differences in the credit score 

reported by each CRA.109 The Federal Reserve Board also conducted two studies that examined 

credit information about a large sample of consumers from one CRA. Although the purpose of 

107. See GAO Report, supra note 95.

108. As noted above, the CDIA’s recent statistics reported that most of the consumers who request their consumer 

report do so in response to an adverse action notice.

109. See Consumer Federation of America and National Credit Reporting Association, Credit Score Accuracy and 

Implications for Consumers (Dec. 17, 2002).
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its inquiry was to determine the usefulness of credit data in providing the Board with information 

on the debt status, loan payment behavior, and overall credit quality of domestic consumers, 

the Board’s first study also found that aspects of credit data may be ambiguous, duplicative, 

or incomplete.110 The second study sought to determine the effect that correcting these data 

limitations would have on consumers’ credit scores, which are increasingly relied upon by 

creditors in making credit decisions.111

a. CFA 2002

The CFA study was based on a sample of credit files that had been requested by mortgage 

lenders on behalf of consumers seeking mortgages. These files included merged reports from 

all three nationwide consumer reporting agencies. The study used the merged files to compare 

credit scores across the CRAs and to identify inconsistencies in data reported by each CRA about 

the same consumer. The study had three phases. Phase One and Phase Two each analyzed credit 

scores across the CRAs, but in Phase One researchers manually reviewed a sample of 1,704 

credit files, and in Phase Two they conducted an electronic review of a much larger sample of 

502,623 files. In Phase Three of the study, researchers took an in-depth look at 51 files from the 

Phase One sample to determine how many files contained inconsistent, missing, or duplicate 

information, based upon information contained in the other CRAs’ reports.

The CFA study reported that:

• On average, the highest and lowest of the credit scores reported by the three CRAs for a 

given consumer differed by more than 40 points. In the Phase Two sample of over 500,000 

files, 29% of files had a difference of 50 points or greater between the highest and lowest 

score, and 4% of files had a difference of 100 points or greater between scores. (The 

CFA study attributes the score differences to differences in the information contained in 

consumer files, rather than differences in scoring models.)

• Almost 10% of the files in the Phase One sample were missing a credit score from at least 

one CRA.

• Of the 1,545 files in Phase One that contained at least three reports and scores, 155 

contained at least one additional CRA report. In some of these cases, the additional file was 

clearly for the wrong person. In others, one person had multiple files based on variations 

in his or her name, and in a third group, the additional report contained a mixture of credit 

information, some of which belonged to the applicant and some of which did not. 

• The CFA study found many accounts listed in one report that were absent from another. 

For example, of the 51 files that the CFA considered in depth, 17 had a mortgage account 

with no derogatory information listed in one report and absent from another, and 40 had 

a revolving account with no derogatory information listed in one report and missing from 

another. 

110. See FRB Study 2003, supra note 2.

111. See FRB Study 2004, supra note 37.
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The CFA study also conducted further review of Phase One files that might be closest to the 

boundary between the prime mortgage lending market and the higher-priced subprime mortgage 

lending market, generally considered to be a credit score of 620.112 Overall, the study found 

that one in five consumers may be at risk for misclassification into the subprime market due to 

inaccurate information in their consumer report.113

b. FRB 2003 & 2004

The 2003 FRB Study examined the credit files for a nationally representative sample of 

248,000 individuals as of June 1999 from one of the nationwide CRAs. Individuals and creditors 

were not identified by name or other personal identifier, but were assigned unique codes so that 

all credit files about an individual, and creditor data across files, could be analyzed. 

As the FRB authors note, because the study did not involve consumer assessment, it could 

not necessarily identify actual errors. The study did find that consumer reporting data may 

contain duplications or ambiguities, or may not be complete. In particular:

• Creditors failed to report the credit limit for about one-third of the open revolving accounts 

in the sample, and about 70% of files had at least one account missing a credit limit. When 

the credit limit is missing, it is reportedly common practice to use the highest historical 

balance in place of the credit limit. Because this is a downward-biased estimate of the 

actual credit limit, it leads to an upward-biased estimate of credit utilization rates, lowering 

the credit score. 

• Approximately 8% of all credit accounts were not currently reported, but had a positive 

balance when last reported. Because these accounts either have been paid or are delinquent, 

the data must be inaccurate as reported.

• Between 1% and 2% of the accounts in the sample were reported by creditors that reported 

derogatory information only. Approximately 11 to 12% of creditors in the sample followed 

this practice.

• The study also found many inconsistencies in the reporting of public record information 

such as bankruptcies and collections. For example, a single episode often was recorded 

multiple times.

In 2004, the FRB released a follow-up study expanding upon its earlier research. The 

purpose of the study was to examine the significance of the data limitations identified in the 

earlier study by estimating how correcting the data problems would affect consumers’ credit 

scores. For this study, the FRB used a nationally representative sample of 301,000 files drawn as 

of June 30, 2003. As in the previous study, the credit files were anonymous and were provided 

by a single consumer reporting agency. This time, the FRB also obtained the CRA’s credit score 

112. Therefore, the study recorded more detailed information for files that (1) had a range of 50 points or more 

between the highest and lowest scores; (2) had a middle score between 575 and 630 and had a range of 30 

points or more between the highest and lowest scores; or (3) had high scores above 620 and low scores below 

620.

113. The study notes that just as many consumers were likely to be favorably misclassified from the subprime to 

prime markets.
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for 83% of the files in the sample. The researchers used this data to develop an approximation of 

the credit-scoring model to determine the effects of correcting a data problem or omission.

The 2004 FRB Study reported that, in most cases, the problems or omissions had only a 

small effect on credit scores. The report explained that this is because (1) most consumers have 

a large number of accounts, which minimizes the effect of an error in a particular account, and 

(2) credit scoring models already take into account data problems. The report noted that some 

data problems – such as inaccuracies in reporting collection accounts – have a more significant 

effect on credit scores than others. The report also noted that individuals with lower credit scores 

are more likely to experience a larger change in their scores when problems are corrected. 

c. Comments on anonymous data studies 

As the GAO Report noted, the 2003 FRB Study used a statistically valid and representative 

sample of consumer reports, but because the reports came from one CRA, the findings of the 

study may not be representative of the other CRAs.114 The findings in the CFA report based 

on Phase Three of its study pertained to a small number of files, and the GAO noted that, as 

with the consumer surveys discussed above, the CFA report counts any inaccuracy, including 

missing data, as an error. Staten and Cate observe that the CFA and 2003 FRB studies both 

primarily identify problems that stem from non-reporting of information in a voluntary system, 

not inaccuracies.115 Further, what appears to be conflicting information – reported in the CFA 

study as an “error of commission” – may be due to different reporting and tape loading schedules 

across data furnishers or CRAs.

The 2004 FRB Study is particularly interesting because it attempts to quantify the effects 

of correcting certain types of possible data problems – an issue the GAO Report identified 

as not having been addressed by earlier studies. Although the study found that the majority 

of consumers would experience little improvement in their scores if certain data problems 

were corrected, there are two important caveats to this finding. First, the consumers who did 

experience the most improvement in their scores were the ones for whom the improvement most 

mattered: those with lower scores, near the boundary for classification in the subprime market. 

Second, as the authors note, some of the errors that might more dramatically affect a credit score 

– such as incorrect accounts or public record information – were not captured by the study.

4. Summary

Each of the empirical studies conducted to date offers important insight into aspects of 

consumer report accuracy and completeness, but none provides a comprehensive picture. 

Consumers are typically in the best position to identify certain errors in their consumer reports, 

and the existing consumer survey studies find that consumers identify many errors – including 

potentially significant ones – when they review their reports. These studies, however, did 

not include a nationally representative sample of consumers. Further, because they rely on 

114. The 2004 FRB Study followed the same methodology.

115. See Staten & Cate, supra note 17.
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consumers’ perceptions and their understanding of consumer reporting practices, they may 

identify certain items as errors that are, in fact, correct. 

The studies based on dispute data provide information about how often consumers who 

suffer adverse action request their consumer reports and dispute data, and how often the dispute 

results in a change to their consumer reports. Unlike the consumer surveys, the dispute data 

studies do provide a measure of whether errors were significant by looking at whether correcting 

the errors resulted in a different credit decision. Their usefulness, however, is also limited. 

The Andersen study is based not on a nationally representative sample of consumers, but only 

on those consumers who suffered adverse action. Further, it relies on certain unsupported 

assumptions – for example, that the consumer reports of certain groups of consumers, such as 

those who were granted credit, those who were denied credit but did not request their consumer 

report, and those who did not apply for credit, do not generally contain errors. 

The CFA and FRB studies, which analyze consumer reports without consumer input, 

identify inconsistencies and omissions and provide insight into the completeness of consumer 

reports. In particular, the CFA study shows a wide variation in credit scores across consumer 

reporting agencies, which could be particularly troubling for those consumers whose credit 

scores are close to the boundary between the prime and subprime lending markets. The 

difference in scores is likely attributable to information contained in the reports, not the scoring 

models, and thus may be the result of errors, or may simply be the result of the voluntary 

reporting system, in which creditors may report data to one CRA but not others. The more 

recent FRB study attempts to quantify the effects of certain data problems. It finds that, 

generally, consumers’ scores do not change much when these data problems are “corrected.” The 

consumers most likely to be affected by a correction, however, are those for whom it could make 

a difference – those with lower scores near the boundary of the prime and subprime markets. 

Further, as the study’s authors note, only some potential sources of error were investigated 

because certain errors can generally only be identified by consumers. Further, only one CRA and 

its credit scoring model were relied upon for the study. 

Thus, none of the existing studies provides a comprehensive assessment of the accuracy 

and completeness of consumer report data. None used a nationally representative sample of 

consumers as well as credit information from all three consumer reporting agencies. Each study 

identifies possible errors, but some may be over-inclusive and others under-inclusive in what was 

counted as an error. 

G. FTC Proposed Pilot Study and Nationwide Survey

Based on its review of the issues and of the previous studies conducted in this area, the 

Commission is seeking to determine whether it can develop its own methodology for measuring 

the level of accuracy and completeness in consumer reports. In particular, the Commission 

is examining the feasibility and costs of conducting a comprehensive nationwide consumer 
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survey.116 In designing such a survey, the Commission would seek to address some of the 

shortcomings that have been identified with earlier studies of accuracy in consumer reports. As 

the GAO has noted, “comprehensive or statistically valid data on credit report errors . . . have 

not been collected,” and “[t]o adequately assess the impact of errors in consumer reports would 

require access to the consumer’s credit score and the ability to determine how changes in the 

score affected the decision to extend credit . . . .”117 Although the Commission (and other law 

enforcement agencies) receive and compile consumer complaints, and although those complaints 

may give certain insights into broader compliance issues,118 looking to such complaints as 

a reliable index of accuracy in credit reports would not be statistically sound. As discussed 

more fully below, the Commission study will instead look at a representative cross-section of 

consumer files.

There are a number of important questions about the design and the cost of a large-scale 

consumer survey. To attempt to answer some of these questions, the Commission has designed 

and proposed a pilot study to test the methodology of such a survey and to further examine 

questions about its design and feasibility.

1. Proposed pilot study

To determine the feasibility of a nationwide survey, the Commission has proposed to 

conduct a pilot study.119 The pilot study would serve both as a test of a specific methodology and 

as a way to shed light on many of the design questions outlined above. It is intended as a tool for 

better designing a larger nationwide survey, and is not an instrument from which any statistical 

inferences could or would be drawn.

The Commission is making preparations to carry out the pilot study and has begun the 

process of seeking Office of Management and Budget clearance, under the Paperwork Reduction 

116. Among other things, and as noted above, the Commission convened a roundtable of interested parties 

– including authors of some of the previous studies summarized in this report – to examine the design 

and feasibility of such a survey. The roundtable was announced in the Federal Register. The Notice of 

Roundtable to Aid Federal Trade Commission Staff in Conducting a Study of the Accuracy and Completeness 

of Consumer Reports, Pursuant to Section 319 of the Fair and Accurate Credit Transactions Act of 2003, 69 

Fed. Reg. 32,549 (2004) can be found in Appendix A to this Report. The agenda for the roundtable, the list of 

participants, and a transcript of the proceedings are available on the FTC Website at http://www.ftc.gov/be/

workshops/.

117. See generally GAO Report, supra note 95.

118. See discussion of consumer complaints and of the complaint referral system established by the FTC and 

nationwide CRAs pursuant to Section 313(a) of the FACT Act, supra notes 91-92, and text accompanying. As 

noted previously, how CRAs and furnishers handle consumer disputes is the subject of another study, which 

will be separately reported to Congress under Section 313(b) of the FACT Act. 

119. In a Federal Register Notice published in October 2004, the FTC discusses the pilot study and invites 

comment on a number of issues, including ways to enhance the quality, utility, and clarity of the information to 

be collected and ways to minimize the burden on those who participate in the study. 69 Fed. Reg. 61,675 (Oct. 

20, 2004), available in Appendix B to this Report.
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Act, for the collection of information involved in the proposed study. Some of the specific 

elements of the proposed pilot study are as follows:

• The study will consist of approximately 35 consumers having a diversity of credit scores 

that cover at least three broad categories (“poor,” “fair,” and “good”). The consumers will 

be adult members of households to whom credit has been extended in the form of credit 

cards, automobile loans, home mortgages, or other forms of installment credit. They will be 

screened through telephone interviews preceded by an official letter from the FTC regarding 

the nature and purpose of the pilot study. As consumers give consent to participate (and 

thereby give permission to obtain their credit scores), a contractor working on behalf of the 

Commission will use their credit scores to determine a final list of participants that includes 

the desired range of scores.

• The contractor will help the participants obtain their consumer reports from the three 

national CRAs (Equifax, Experian, and TransUnion). The three reports pertaining to each 

study participant will be requested on the same day; the reports pertaining to different 

participants may be requested on different days.

• The contractor will help the participants review their consumer reports by (a) clearing 

up common misunderstandings that they may have about the information in their reports 

(educating the participant wherever appropriate), (b) helping to identify errors or potential 

errors, and (c) helping to locate any material differences or discrepancies among their three 

reports, and checking whether these differences indicate inaccuracies.

• The contractor will then determine the importance of errors identified by the consumer 

by assessing the degree to which correcting such an error would improve the consumer’s 

credit score. In those cases where the alleged error causes a significant change in the 

consumer’s score, the contractor will facilitate a participant’s contact with the CRAs and 

with the furnishers of information to attempt to informally resolve items that the participant 

describes as inaccurate. 

• When items are resolved, the contractor will determine whether consumer report 

information is changed and whether any such change led to a change in the participant’s 

credit score.

• When disputes cannot be resolved informally, the contractor will guide participants through 

the dispute process provided by the FCRA. At the conclusion of this process, the contractor 

will ascertain whether consumer report information is changed and whether any such 

change led to a change in the credit score.

As noted above, the results of the pilot study will not be used for statistical projection to 

a larger population. The most important information to be obtained from the pilot study is an 

assessment of the degree of difficulty, and the types of difficulties, with which each of the above 

tasks was performed. The results of the pilot study, and the next steps taken by the Commission 

in this ongoing accuracy study, will be provided in the next interim Report to Congress.
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2. Proposed nationwide survey 

The contemplated nationwide survey would focus on consumers and their experiences in 

identifying and disputing errors in their reports. In designing the survey, the Commission would 

attempt to address many of the concerns that have been raised by the GAO and others about 

previous studies. Specifically, the proposed survey would have the following characteristics:

• It would be based on a nationally representative sample. 

• It would use a reliable method for identifying errors and omissions. As discussed below, 

simply asking consumers whether they can identify errors may lead to important biases 

in measurement. Thus, the study would use expert “coaches” to assist consumers in 

identifying and resolving errors.120

• It would categorize errors by their type and seriousness in terms of consumer harm. As 

noted above, there are several potential sources of error, and determining the sources 

of error is a necessary step in determining how to address the errors. Furthermore, it 

is important to learn what types of error have the greatest consequence for individual 

consumers.121

The main advantage of using consumer surveys is that the technique exploits a consumer’s 

knowledge about his or her own credit history. To obtain comparable information from other 

sources would require contacting many furnishers and speaking to people with no personal 

memory of the relevant events. Moreover, asking consumers to order and review their own 

reports addresses some of the privacy concerns associated with using consumer data to conduct 

research. Because the approach involves the consumer’s direct participation, researchers would 

naturally obtain a consumer’s permission before using his or her file.

Use of consumer surveys does have some important drawbacks, however, that the 

Commission would attempt to address in the survey design. One potential problem is that 

consumers may mistakenly question items that are in fact correct because they do not understand 

the report or their credit obligations. For example:

• A credit account with a retailer (for example, XYZ Department Store) may be managed by 

a large bank (for example, ABC Bank). A consumer who sees an account for ABC Bank 

may not realize that the account in fact represents her XYZ charge card and might therefore 

identify the ABC account as an error in his or her report.

• A married woman co-signs a loan with her husband. Later, they divorce, and her exhusband agrees to be responsible for paying this loan. If the ex-husband fails to make 

payments, she is still jointly responsible, and the missed payments would properly appear 

on her credit record. Therefore, the delinquency on her report would be accurate.

120. Each consumer would work with the expert coach to identify instances of inaccuracy and incompleteness in 

his or her own consumer report. The consumer and/or coach would then attempt to resolve perceived errors in 

their reports with the records of the repositories and the furnishers who supplied the information in question.

121. As a measure of the seriousness of particular errors, the survey would use the impact of errors on consumers’ 

credit scores. Mistakes in a consumer report that have large effects on the credit score are also likely to have a 

large impact on the consumer. 
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A potential solution involves the use of expert “coaches” who would help address these and 

similar problems. Such coaches would be able to inform consumers about the law and common 

practices related to consumer reporting and thereby prevent consumers from reporting errors 

inappropriately. 

In addition, some consumers might mistakenly view some accurate items as inaccurate 

because of memory lapses or failure to consult appropriate records. Consumer responses may 

also be biased, in that consumers may be more likely to confirm favorable information in their 

files than to confirm derogatory information. To protect against these problems, the study would 

attempt to confirm reported errors with the furnisher of the information that the consumer views 

as incorrect. This could be done by either asking the consumer to try to dispute the item directly 

with the furnisher, or asking the consumer to carry through a formal dispute process with the 

CRA in question. A third approach would be to have a member of the research team contact 

furnishers.

It is also likely that a consumer survey is better suited to measuring accuracy than to 

measuring completeness. Consumers may be more likely to notice information that is incorrect 

than information that is missing. Also, as discussed above, consumer reports may be incomplete 

either because the CRA did not place submitted information in the correct file, or because the 

furnisher never provided the information in the first place. Follow-up investigations might not 

succeed at identifying the reasons behind incomplete reports.

At this time, it is very difficult to give a reliable estimate of the cost of a national study. It 

is also unclear how effectively the survey design can address the challenges outlined above. 

The proposed pilot study will both allow the FTC to estimate the cost of a larger nationwide 

survey and point to potential obstacles that can then be avoided in designing a larger survey. For 

example, the pilot will tell us how much time and effort is necessary to go over each consumer’s 

report, how effective the “expert coach” approach is in helping consumers through the process, 

and how effectively consumers and researchers are able to resolve discrepancies in consumer 

reports through informal and formal means.

Depending on the outcome of the pilot study described above, further pilot studies may be 

necessary to provide a basis for a robust national survey. Further, the Commission may need to 

reassess the design of the national survey currently being considered.

IV. Data Matching 

A. Introduction

Section 318(a)(2)(A) of the FACT Act requires the FTC to study: 

the efficacy of increasing the number of points of identifying information that a 

credit reporting agency is required to match to ensure that a consumer is the correct 

individual to whom a consumer report relates before releasing the consumer report to 

a user, including (i) the extent to which [such a requirement] would (I) enhance the 
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accuracy of credit reports; and (II) combat the provision of incorrect consumer reports 

to users.

As one example, the Act proposes requiring an “exact match” on name, SSN, address, and 

zip code. The Act also asks the FTC to describe the effect of allowing CRAs to use “partial 

matches” on SSN and the use of “name recognition” software.

To understand the likely effects of such requirements, Commission staff interviewed 

representatives of consumer groups, consumer reporting agencies, and experts on data matching 

procedures. Due to the need to understand the details of CRA matching procedures, and the 

proprietary nature of these procedures, confidential discussions with CRA representatives played 

a particularly important role in this study. Responses to the Federal Register notice regarding the 

“same report” study were also useful in understanding CRA matching procedures.

This report describes what Commission staff has learned about how and why errors occur in 

the matching process, and discusses the costs and benefits of imposing requirements on the CRA 

matching procedures. The proposed requirements could affect matching at two points, in both 

the file building and file retrieval process.122 As discussed in the previous section, inaccuracy can 

result from the file building process if a CRA receives correct information, but fails to assign it to 

the correct consumer’s file (creating either a mixed file or a fragmented file). Problems in the file 

retrieval process occur when a CRA receives an inquiry requesting the file of one consumer, but 

provides a file pertaining to another consumer. Requiring CRAs to match consumer identifying 

information more closely could address either or both of these problems. This study considers 

the separate effects of the proposal on file building and file retrieval.

B. CRA Databases and the Matching Process

Although the CRAs attempt to assign accurately all incoming information to the correct 

person’s file, their systems sometimes fail to do so. As will be described in more detail below, 

the main reason for such a failure is that the identifying information provided to the CRAs is 

imperfect. Ambiguities in identifying information give rise to cases where a record cannot 

be matched with 100% certainty. If the identifying information were perfectly reliable – 

specifically, if all consumer records were linked to a unique, reliable identifier – matching would 

be straightforward.

The lack of a fully reliable identifier means that the CRAs inevitably face situations where 

records match with a high probability, but not with certainty. In such cases, a CRA must make 

a difficult choice. Accepting the match risks assigning a credit history to the wrong consumer, 

while rejecting the match risks excluding information that is legitimately part of the consumer’s 

credit history. Either outcome can hurt consumers. At the individual level, both the inclusion of 

false negative information and the exclusion of true positive information can cause a consumer 

to appear to be a worse credit risk than he or she actually is. At the market level, unreliable 

122. In considering matching requirements that would apply “before releasing a consumer report to a user,” the Act 

seems to suggest a focus on the file retrieval process. However, the fact that the Act asks the Commission to 

study “the extent to which requiring additional points of identifying information to match would. . . enhance 

the accuracy of credit reports. . .” suggests that Congress intended that the report consider file building as well. 
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consumer reports are less useful in measuring default risk and could therefore raise interest rates 

for consumer loans and reduce the amount of credit offered to consumers.

1. Why is data matching difficult?

In designing their matching procedures, the CRAs face two challenges. First, their systems 

must be able to discriminate between consumers with very similar identifying information, such 

as a father and son with the same first and last name, living at the same address. Second, their 

systems must recognize an individual consumer even when his or her identifying information 

changes significantly, such as when a woman marries and moves to a new home, changing both 

her name and address. 

Although name, address, and SSN would appear to be sufficient to uniquely identify a 

consumer, inaccuracies in the data can frustrate this process. Names and addresses may change 

over time, and spelling errors and nicknames are common. The SSN can be a very useful for 

matching; however, as explained below, it is often missing, and even when present, errors are 

quite common. In the absence of a unique, reliable identifier for each consumer, the CRAs 

employ a “matching algorithm,” or a set of rules that determine the likelihood that two sets of 

identifying information represent the same consumer. In some cases, the matching algorithm is 

straightforward – if an incoming record and an existing file both include the exact same name, 

address, and SSN, the pair clearly constitutes a correct match. Matching becomes difficult when 

some fields match, but other fields either do not match or are missing.

a. Problems at the data creation level

The CRAs compile information that is generated by third party furnishers, and they must 

use this information to link different accounts belonging to the same person. Each firm that 

sends information to a CRA may have its own unique system for collecting and maintaining 

consumer identifying information. As a result, the form and content of the updates and inquiries 

received by CRAs can be inconsistent. Further, the updates may not contain a unique identifier 

that allows all of a consumer’s accounts to be linked.123

For example, when XYZ Bank sends a CRA data on all of its auto loans, the CRA attempts 

to match each of these sets of data to the appropriate consumer files in its database. These 

files were “built” using data from other furnishers – for example, one of the auto loan accounts 

might belong to a consumer whose existing file contains only an account with ABC Electronics. 

Because the CRA does not control the identifying information that either furnisher reports 

about its customers, the information provided by XYZ Bank may be difficult to match to the 

information provided by ABC Electronics.

In addition to the challenge of linking disparate information, the CRAs must distinguish 

new credit users from individuals with an existing CRA file. Information that the CRAs receive 

123. In contrast, a credit card issuer can assign each new customer a unique account number that will be linked 

to all incoming records. This makes it relatively easy to link an in-store transaction to an individual’s credit 

account. As a result, matching problems are rare for credit card charges and it is very rare for a charge to 

person A’s credit card to show up on person B’s bill.
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does not indicate whether the individual consumer already has a file in the CRA’s database, or 

is a new consumer opening a credit account for the first time. Because they are generally not 

in direct contact with consumers, the CRAs must rely on information from furnishers to inform 

them about name or address changes.124 This makes it hard to distinguish a consumer who is 

genuinely new to the system from one who is in the system, but whose information has changed.

b. The SSN is important for data matching, but the CRAs cannot rely on it completely

To some degree, the SSN has served as a unique identification number that can be used 

to link consumer accounts. But the SSN was not designed for the purposes of data matching, 

and it is not the perfect tool for this task. There are two issues that limit the SSN’s usefulness 

for linking records in the CRAs’ systems. First, it is often missing from consumer credit 

information, largely due to concerns about privacy and identity theft. Second, errors are 

common in recording SSNs.

The CRAs do not require that subscribers submit an SSN as part of an inquiry. Although 

many creditors require consumers to provide an SSN as part of an application for credit, 

some do not. The CRAs report that between 5 and 10% of inquiries from users either do not 

contain an SSN or include an invalid SSN, and that the SSN is even less prevalent in data sent 

by furnishers.125 An inquiry may be missing an SSN because a consumer does not know or 

remember his or her SSN, or because the consumer withholds his or her SSN due to concerns 

about identity theft. Privacy concerns may also prevent furnishers from maintaining the SSN as 

part of their account data. 

To an increasing extent, public policy is also limiting the availability of the SSN. For 

example, as of December 2003, bankruptcy records available through the Public Access to 

Court Electronic Records (“PACER”) system include only the last four digits of the SSN.126 In 

addition, legislative proposals could reduce the prevalence of SSNs in company records and 

could prevent creditors and others from requiring applicants to provide their SSN.127

124. There are additional pragmatic reasons why CRAs rely on furnishers, not consumers, for this information. 

As discussed above (see note 25 supra, and text accompanying), CRAs receive an immense volume of 

information from furnishers, and the CRAs’ procedures for updating information based on that stream of 

information are already well established. The opportunity for abuse, such as “phishing” (scams specifically 

designed to deceive consumers into divulging sensitive personal information) or identity theft, might also 

increase if consumers could directly alter address information.

125. FTC staff communication with CRA representatives.

126. PACER is an electronic public access service whereby users may obtain information from federal appellate, 

district, and bankruptcy courts. There are indications that the limitations on use of SSN that PACER currently 

applies to bankruptcy records will be expanded to require that a broader range of personal data identifiers be 

removed from all public filings (or redacted when they are needed). See, e.g., http://www.nyed.uscourts.

gov/adminorder04-09.pdf and http://www.txsd.uscourts.gov/news/2004-11.htm (court orders citing the Egovernment Act of 2002 and the policy of the Judicial Conference of the US with respect to confidentiality of 

personal identifying information).

127. For example, the proposed Social Security Number Privacy and Identity Theft Prevention Act of 2003, 

introduced in the House of Representatives, would prohibit firms from refusing to do business with a consumer 

who does not provide an SSN. See H.R. 2971, 107th Cong. (2003); see also Social Security Number Privacy 

and Identity Theft Prevention Act of 2004, S. 2801, 108th Cong. (2004), a related bill introduced in the Senate 

in 2004.
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Concerns about identity theft arise from the SSN’s current use as both an identifier and 

an authenticator. As an identifier, the SSN is used to determine which records belong to a 

particular individual – i.e., who an individual claims to be. As an authenticator, the SSN is used 

to establish whether an individual really is who he or she claims to be. Whereas an identifier 

is most effective when it is easily accessible to users, an authenticator is most effective when 

it remains a secret between the holder and the validator.128 For example, in the case of bank 

accounts, the account number is the identifier, and it would be difficult for the bank to carry out 

its functions and provide appropriate customer service if bank employees were denied access to 

it. The Personal Identification Number (“PIN”), however, as the authenticator, is never provided 

to bank employees, and is used only by the account holder in confidential electronic validations. 

Thus, the problems of identity theft are aggravated because the SSN cannot be both widely 

known and kept confidential at the same time.129 Therefore, while the SSN plays an important 

role in data matching, this role must be analyzed in light of concerns about identity theft.

The SSN is also subject to error. Errors in SSNs may arise when a consumer does not 

know his or her number when filling out an application, from illegible handwriting or faulty 

transcription, or from mistyping the number when entering it into a database. Studies of 

unemployment insurance records suggest error rates in the SSN data entry process of between 

0.5% and 4%.130 The CRAs account for the possibility of errors by allowing “partial matches” 

on SSN – for example, when seven or eight of nine digits match, or when the entire number is 

shifted by one digit. Such “partial matches” are allowed when other data elements match closely 

enough; the CRAs report that this happens between 1% and 2% of the time.

The format of the SSN means that errors are not easily detected. Credit card numbers, for 

example, include a “checksum digit” that almost guarantees that a small typographical error will 

128. “Phishing” schemes and other scams are specifically designed to deceive consumers into divulging sensitive 

personal information that serves just such an authentication function. See also note 212, infra.

129. This role of the SSN has also given rise to a phenomenon that has been referred to as “SSN-only identity 

fraud.” See, e.g., Lesley Mitchell, New Wrinkle in ID Theft, Salt Lake Tribune, June 6, 2004, available at 

http://www.sltrib.com. In a Utah mortgage fraud scheme, individuals, many of whom were apparently illegal 

aliens without a valid SSN, were able to establish a credit identity using their own names, but using another 

individual’s SSN. Although acquiring a valid SSN was part of the scheme, the purpose was not to use another 

individual’s credit history to acquire credit, but rather to use the SSN to establish a completely new credit 

identity. The result was the creation of two files in the CRA databases that contained the same SSN – one 

relating to the SSN’s true owner and one relating to the perpetrator of the fraud. Further, because the CRAs 

considered the two files to belong to different consumers, the true owners of the SSNs could not view the 

second file or “correct” it through the dispute process. Although this incident caused concern among the true 

owners of the SSNs, consumers will not ordinarily be harmed by the existence of the second file. As discussed 

infra, CRAs will not include information in a file or provide a file to a user based solely on an SSN match.

130. See John M. Abowd and Lars Vilhuber, U.S. Census Bureau, The Sensitivity of Economic Statistics to Coding 

Errors in Personal Identifiers, TP-2002-17 (2003). Abowd and Vilhuber estimate an error rate of 0.5%, but 

caution that their method may underestimate actual errors. A study by the Bureau of Labor Statistics in 1997, 

in which unemployment insurance wage records were compared directly to Social Security Administration 

records, found that names and SSNs did not match in 7.8% of cases (with considerable variation across states). 

Bureau of Labor Statistics, Quality Improvement Project: Unemployment Insurance Wage Records (Oct. 

1997). If half of these cases reflect an error in the SSN (and the other half reflect an error in the name), the 

error rate for SSNs would be 3.9%.
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generate an invalid number.131 This means that the wrong person’s account will not be charged, 

and the person processing the number can be alerted immediately to the problem. Because it 

lacks a checksum digit, small typographical errors in the SSN can easily yield a number that is 

valid but belongs to the wrong individual.

Until recently, SSNs were assigned sequentially, meaning that if a parent applied for SSNs 

for multiple children at the same time, their SSNs would be very similar (possibly differing by 

only one digit). Because these siblings might have the same last name and address, the similarity 

in their SSNs makes confusion quite possible.132

Because of these problems, the CRAs do not rely exclusively on SSNs in their matching 

procedures. If 5% of inquiries include no valid SSN, and 1% include an SSN that is valid but 

incorrect, this translates to an estimated 250,000 inquiries each day for which an exact SSN 

match either could not be used or would yield the wrong consumer report.133 This leads the 

CRAs to use other identifiers, such as name and address, to aid in matching. As discussed 

above, the CRAs will rely on SSNs that do not match if the match on other data elements is 

strong enough. By contrast, if the SSN is an exact match, but other data elements do not match 

at all, the CRAs will not consider the records to match. The CRAs instead follow a policy of 

maintaining separate files for what appear to be different consumers who are using the same 

SSN.134

When a CRA maintains a second file with one consumer’s SSN but a different consumer’s 

name, the CRA will ordinarily not provide the second consumer’s file when the first consumer 

applies for credit. Unless it receives additional information that causes it to consolidate files, the 

CRA will keep the two files separate, because the SSN alone is not enough to justify merging the 

files. Further, all three nationwide CRAs state that they will not provide a credit report based 

solely on an SSN match.135

131. Incorporating a “checksum digit” is a way of designing an account number (or other identifying number) 

so that typographical errors will almost certainly yield a number that is invalid. For example, the last digit 

of a credit card number is typically derived from the preceding digits using a relatively straightforward 

mathematical formula. A small error in the data entry process – mistyping a single digit, or reversing two 

digits – will mean that the final digit no longer matches those that precede it, so that a computer will recognize 

the number as invalid.

132. An example of this is the case of Jerry Crabill, where TransUnion furnished both the plaintiff-consumer’s 

credit report and the report of his brother, whose first name started with the same letter and whose social 

security number differed by only one digit. See Crabill v. TransUnion, L.L.C., 259 F.3d 662 (7th Cir. 2001).

133. These numbers are based on an estimate of 1.5 billion inquiries per year, or about 4 million per day.

134. It appears that the CRAs do not routinely conduct investigations of such cases. A likely reason is that, because 

of the automated nature of the credit reporting system, such investigations would be very costly.

135. FTC staff communication with CRA representatives. Although no CRA will supply a full credit report in 

response to only a submitted SSN, at least two of the three nationwide CRAs do offer a product that allows 

users to retrieve limited non-credit consumer identifying information using only an SSN. For example, 

Experian offers a product known as “Social Search” that allows users to retrieve consumer identifying 

information such as name and address based solely on an SSN search. See http://www.experian.com/products/

social_search.html. TransUnion offers a similar service known as “TRACE.” See http://www.transunion.

com/Business/Solution.jsp?id=/transunion/solutions/data/FncCollections.xml&view=products.
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2. Types of data problems

The CRAs use a combination of identifying information in matching records. Matching 

is difficult when some identifying information that the CRA receives is either (1) missing; 

(2) incorrect; (3) correct, but has changed (e.g., a new address); or (4) correct, but inconsistent 

(e.g., a nickname). These problems may be caused by either the consumer or the furnisher that 

records and reports the consumer’s information. 

Problems with the information the consumer provides can arise either from error or 

deliberate choice. For example, a consumer may mistakenly reverse the first and last names on 

an application, or report the wrong SSN. A consumer might also omit some personal information 

if he or she is concerned about revealing this information to a stranger. Thus, for example, the 

consumer may choose not to record an SSN (or may record a false one), may provide only a first 

initial rather than a full first name, or may misreport or fail to report his or her age. 

Having collected information from a consumer, a creditor (or other user of consumer 

reports) may make mistakes when entering the consumer’s data into its system. Information 

from a written application must be entered into a computer, introducing the possibility of 

keystroke error and errors arising from illegible handwriting. When credit applications are made 

orally over the phone, names and addresses may be misspelled.

Reliable matching requires identifiers that are persistent, so that they do not change 

throughout a consumer’s life, and discriminating, so that they allow consumers to be 

distinguished from one another. Of the currently available identifiers, the SSN is the best 

candidate, because it is unique and persistent, but as described above, the CRAs cannot rely 

entirely on the SSN.136 Apart from the SSN, the most important fields used in matching are name 

and address.

There are a number of inherent problems in using name and address as identifiers. A 

leading problem is that both are subject to change. The Census Bureau reports that 14% of 

Americans move each year.137 Consumers change names, most frequently when a woman 

marries or divorces. CRAs typically obtain this information from furnishers, not consumers;138

therefore, the CRAs must accommodate name and address variations in order to maintain the 

continuity of consumer files. 

Even a consumer whose name and address have not changed may report this information 

inconsistently. Consumers may use nicknames, may use a middle name or initial, or use a first 

initial only. Name reversals are also common and sometimes hard to identify. For example, it is 

quite possible that a consumer listed as “Frank Howard” is actually “Howard Frank,” but that the 

first and last names were reversed in the application process.

136. In those instances where a CRA is merely updating an existing account, the CRA can use account numbers 

to match the data with the file. Account numbers are quite reliable, as they uniquely identify consumers and 

are unlikely to contain errors (both because account numbers generally include a checksum digit, and because 

they are generally not re-entered by hand each time an account is updated). Because of this, matching errors 

are unlikely when updating the consumer’s existing accounts.

137. See Jason P. Schacter, U.S. Census Bureau, Geographic Mobility: 2002 to 2003, Current Population Reports 

(2004).

138. See note 124 supra.
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The CRAs report that people often omit their apartment number from their address, making 

it difficult to distinguish people with similar names living in the same apartment building. Many 

consumers maintain multiple addresses – in addition to a residential address, a consumer might 

have a business address, a vacation home, or a Post Office Box. Addresses are often written 

down in an inconsistent manner – people may use abbreviations (Str. or St. for Street), neglect 

to use a directional suffix such as SE, misspell a street name, etc. The CRAs use address 

standardization software to accommodate these variations, but these tools do not eliminate all 

problems.

Names are not unique – for instance, the Census Bureau reports that in 1990, 1% of the U.S. 

population had the surname “Smith,” 3.3% of American males had the first name “James,” and 

2.6% of females had the first name “Mary.”139 Distinguishing individuals within a family is a 

particular problem because the combination of name and address may not provide any additional 

discriminatory power. A particular challenge is fathers and sons with the same name – when 

the generational suffix is missing, it is difficult to keep John Doe Sr.’s and John Doe Jr.’s files 

separate. SSNs can be used to distinguish individuals whose identifying information is otherwise 

similar, but, as discussed above, correct SSNs are not always available for matching.

Although telephone numbers seem to offer an additional point of identifying information, 

they often do not provide useful information not already contained in the address. If an address 

has changed, it is likely that the telephone number has changed as well. Additionally, if two 

people live at the same address, they are likely to have the same telephone number.

3. Sources of data problems

At least to some degree, the quality of identifying information received by CRAs reflects 

choices made by data furnishers. Creditors determine what information to require from 

applicants and how much care to exercise in collecting it and making sure that it is correct. They 

also decide what information to maintain in their files. Creditors and other data furnishers have 

an incentive to maintain the accuracy of their own files, but they may not have a similar incentive 

to maintain their files in such a way as to make the CRAs’ data matching process easier. For 

example, because furnishers’ own account numbers are usually very effective identifiers, 

furnishers may have less need to maintain or report SSNs, data on past addresses, or full names.

The CRAs encourage furnishers to report data in ways that make matching easier. However, 

because data furnishers provide consumer information to the CRAs on a voluntary basis, the 

CRAs have only limited influence. The CRAs have been somewhat successful in convincing 

furnishers to adopt an improved format for electronic submission of account data. The credit 

reporting industry has collaborated in developing a standard format (the “Metro” format) for data 

139. See U.S. Census Bureau, Name Files, available at http://www.census.gov/genealogy/names/. The problem 

may become even more severe in connection with a geographic region where certain names are especially 

common, and may even be linked to certain dates or time periods. For example, it is common for people 

of Irish descent to give the name Patrick or Patricia to a child born on or near St. Patrick’s Day. People 

of Mexican origin often name a girl Guadalupe if she is born on December 12th, which commemorates 

the second appearance of the Virgin of Guadalupe. Interview with Chuck Coleman, U.S. Census Bureau 

(Mar. 2004). Examples such as these demonstrate that name and birth date together may not be highly 

discriminating in some cases.
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submitted by furnishers. The CDIA reports that as of 1996, more than 95% of data received by 

the CRAs used the Metro format. A newer version of the format (“Metro 2”) was introduced in 

1997, and by 2003, more than half of all accounts were reported in this format.140 

Although a standard format makes maintaining computer files easier, effective matching 

depends on the quality of the identifying information provided. The CRAs have made efforts to 

encourage furnishers to submit more complete information. For example, one CRA described 

a program that offered its subscribers financial incentives to include an SSN with all data 

submitted.141 However, most furnishers are subscribers of only one nationwide CRA, but may 

report data to all three. Therefore, because an improvement to the data would benefit not just the 

CRA but its competitors, the incentive to offer such discounts may be limited.

Identifying information in public records and collection accounts often does not come 

directly from contact with consumers, so consumers may not have an opportunity to notice 

mistakes or to note changes in name or address. Also, furnishers that are not necessarily users 

of consumer reports (e.g., providers of public record information and some collection agencies) 

may have less incentive to ensure the accuracy of their information.

Unlike a firm that is furnishing data, a subscriber submitting an inquiry does have strong 

incentives to submit complete identifying information. If a creditor receives the wrong person’s 

file, or fails to receive a consumer report when that consumer in fact has a file in the system, 

the creditor risks making a credit decision based on faulty information. On the other hand, 

in attempting to attract new customers, creditors may have incentives to make the application 

process as easy as possible and may therefore not insist on complete, detailed information. 

This tradeoff between accuracy and convenience varies depending on the type of furnisher. 

For example, identifying information from mortgage applications is probably quite reliable. 

Given the importance of a mortgage transaction, both lenders (or brokers) and their customers 

are likely to take care in checking that an application is filled out properly and completely. 

For other transactions, the parties may be less careful. For example, in retail point-of-sale 

applications, consumers may provide much less comprehensive information. A retailer might 

also be interested in processing an application quickly, and in making the application process as 

convenient as possible for customers. Retail credit accounts also typically have relatively low 

credit limits, so the cost of an error may be lower. 

4. The CRAs’ management of data quality problems

Much of the CRAs’ business success depends on their ability to organize disparate 

information into files that are as accurate and complete as possible. To this end, the CRAs have 

all developed procedures for proper matching, within the limitations of the data they receive. 

The CRAs start by “cleaning” the data. For example, they use address standardization tools 

that translate address variations into a standard format (e.g., 1500 East Main Avenue, Suite 201 

becomes 1500 E MAIN AVE STE 201). A similar process checks for common problems with 

names (e.g., “John Smkth” might be changed to “John Smith,” and “O’Neal Kenneth” might 

140. See Statement of Stuart K. Pratt, supra note 2.

141. FTC staff communication with CRA representatives.
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be changed to “Kenneth O’Neal”). The CRAs validate SSNs by comparing the SSN to lists of 

invalid SSNs and the SSNs of people known to be dead. They also maintain information about 

variations in an individual’s identifiers – for example, former addresses, former or alternate 

names, or other SSNs that have been used by the same individual.

All three CRAs have stated that they are constantly seeking improvements in their 

matching processes. Because of their complexity and their connection to databases, however, 

the impact of changes to the data-matching protocols can be unpredictable. Therefore, before 

it is implemented, any possible change is tested carefully on actual data, side-by-side with the 

existing algorithm. The CRAs then focus on the cases where the two algorithms yield different 

matches, and, where possible, use human judgment to identify the best result. This allows the 

CRAs to evaluate whether existing problems are fixed by the change and whether new problems 

arise. A similar technique is also used to identify problems with the working algorithm – the 

CRAs analyze samples of the data to identify problems and look for opportunities to improve.

An important response to inconsistencies and gaps in consumer identifying information 

is the creation of “temporary” fragmented files. After receiving information that cannot be 

definitively matched to a file in the database, a CRA is faced with a choice. Adding an “update” 

to a file risks creating a mixed file, while not adding the update risks creating a fragmented 

file. In facing this problem, the CRAs are more tolerant of fragmented files than mixed files. 

One reason is that fragmented files are easier to correct at a later point. It is difficult to write a 

computer program that will identify and fix mixed files, and once a mixed file has been created, 

the problem can “snowball” – that is, once some information about person B has been added to 

person A’s file, it becomes more likely that future information about B is matched to A’s file.142 

In contrast, the CRAs’ computers are programmed to search for fragmented files and merge them 

when appropriate. Because of this, the CRAs are more likely to create a new file and routinely 

check whether that file can be merged with an existing file. Knowing that it has a certain number 

of fragmented files in its database, each CRA routinely re-checks for potential file merges as new 

data arrives.

Figure 2 illustrates the main steps in the matching process that relate to processing uncertain 

matches. The diagram refers to matching in the file building process, but the process for file 

retrieval is substantially the same. 

142. For instance, if the CRA’s system places an account for John B. Smith, at 123 Maple St., in the file for John A. 

Smith, at 456 Oak Lane, John B.’s address will become part of John A.’s file. This makes it more likely that 

new records related to John B. will match John A.’s file.
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As an example of how this process works, suppose that a consumer (John Doe) moves from 

New York to St. Louis and applies for credit using only his name and (new) address. As a result, 

a CRA receives an inquiry with the following identifying information:

Name: John Doe

Address: 123 Main St.

 St. Louis, MO

SSN: (missing)

Although the CRA has many files for consumers named John Doe, it does not have any 

that match this address. The CRA is therefore unable to determine whether the inquiry refers to 

a consumer with no file (most likely someone who has never before applied for credit), or to a 

consumer with an existing file who has recently moved. In this situation, all three of the major 

CRAs would create a new file for John Doe while continuing to check whether this file can be 

linked to another file in the database. As the consumer updates the address information with his 

or her existing creditors, this new information will be added to the CRA’s files. For example, the 

CRA might receive an update from credit card issuer, XYZ Bank, that includes an account with 

the following identifying information:

Name: John Doe

Address: 123 Main St.

 St. Louis, MO

SSN: 123-45-6789

XYZ Acct # 1111 2222 3333 4444

With this information, the CRA is able to match the account to the following file:

Name: John Doe

Address: 456 Elm St.

 New York, NY

SSN: 123-45-6789

XYZ Acct # 1111 2222 3333 4444

Figure 2: CRA procedures for handling uncertain matches

Furnisher 

submits new 

record

CRA uses 

algorithm 

to comapre 

record with 

existing files

CRA 

updates file 

with info 

from new 

record

CRA 

compares 

updated 

file to other 

existing files

CRA creates 

new file

CRA 

merges

files

CRA 

maintains 

file

Match

No match

Match

No match
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At this point, the CRA is able to update the address information in this consumer’s file and 

to merge this file with the small file created by the earlier record that could not be matched.

In this example, the CRA initially did not provide a report in response to the inquiry because 

information did not match closely enough. But once presented with a matching name, SSN, and 

account number, the CRA merged two files despite a non-matching address. When the CRAs 

accept a match despite variations in the data, they maintain information about these variations 

in the consumer’s file. A file will include information about a consumer’s past or alternate 

addresses and alternate names that have been used. For example, an individual’s file may contain 

multiple SSNs if that person has made occasional mistakes in filling out credit applications. 

Similarly, if a consumer changes his or her name, the CRA will maintain information about the 

former name. Retaining this type of information means that it can be used for matching if the 

variant is used in incoming records or updates. 

C. Benefits and Costs of the Proposed Matching Requirements

Section 318(a)(2)(A) of the FACT Act contemplates two types of matching requirements: 

rules on the number or type of identifiers that must match (e.g., “increasing the number of points 

of identifying information” that must match), and rules on how closely such identifiers must 

match (e.g., requiring an “exact match” or disallowing “partial matches of [SSNs] and name 

recognition software.”). Either type of requirement could establish a stricter standard than is 

currently used by CRAs to match consumer files, and would therefore have the potential benefit 

of increasing the accuracy of consumer reports. The main potential costs would include a 

decrease in the completeness of consumer reports and in the CRAs’ flexibility and efficiency in 

matching files.

Unfortunately, these benefits and costs are very difficult to quantify. As discussed in Part 

III of this report, there is currently very little reliable information available about the levels of 

accuracy and completeness in consumer reports. As a result, it would be difficult to estimate 

precisely how the proposed requirements would affect these levels. However, a variety of factors 

and likely effects are discussed below. 

1. The tradeoff between accuracy and completeness

As discussed above, the CRAs face a choice between files that are more accurate and 

files that are more complete. The CRAs often identify matches that are close, but not perfect. 

Accepting an imperfect match risks inaccuracy – either a mixed file (if a mismatch occurs in 

the file building process), or the delivery of the wrong person’s consumer report to a user (if 

a mismatch occurs in the file retrieval process). On the other hand, rejecting the match risks 

incompleteness – either a file that is missing some accounts or the failure to deliver a correct 

file to a user. The CRAs attempt to minimize both inaccuracy and incompleteness, but the 

limitations of the identifying information mean that they cannot eliminate both. If the CRA

adopts a “stricter” matching algorithm that reduces inaccuracy, the necessary result is that 

incompleteness will increase.
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When Congress passed the FCRA, it was responding in part to consumer concerns that the 

CRAs overemphasize completeness at the expense of accuracy. Many of the CRAs’ customers 

are lenders, whose main concern in consulting a consumer report is assessing the likelihood that 

a borrower will default. For many lenders, the loss incurred when a borrower defaults is much 

larger than the profit earned when a borrower repays a loan. Because of this, lenders may prefer 

to see all potentially derogatory information about a potential borrower, even if it cannot all 

be matched to the borrower with certainty. This preference could give the CRAs an incentive 

to design algorithms that are tolerant of mixed files, which could harm consumers to whom 

derogatory information is mistakenly assigned.

The FCRA addresses this issue by requiring CRAs to use “reasonable procedures” to 

ensure the maximum possible accuracy of consumer reports, giving consumers access to their 

files, and establishing a dispute process. These measures work to increase accuracy at the cost 

of completeness. Because the proposed requirements would increase accuracy even further, 

the challenge is to determine whether this increase justifies the associated reduction in the 

completeness of consumer reports.

2. Mandatory matching rules would be likely to lower match efficiency

CRAs have an incentive to make their matching processes as efficient as possible. A 

matching process is efficient if the number of incorrect matches cannot be reduced without 

also reducing correct matches, or vice-versa. For example, a process that completely ignored 

middle names would be inefficient because middle names will sometimes allow the CRA to keep 

different consumer records separated, while not preventing the CRA from matching records that 

should be matched.

An efficient matching process will be very complex, and should adapt as technology and the 

available identifying information change. Because uniform rules would be unlikely to capture 

the necessary complexity and flexibility, they are likely to lower the algorithm’s efficiency. The 

likely difficulties are described below.

a. An “exact match” is hard to define

As noted above, the Act proposes a sample rule that would require an “exact match of 

the first and last name, Social Security number, and address and ZIP code . . . .”143 Such a 

requirement would be very inefficient if it did not allow certain data variations. For example, 

if a rule did not allow common nicknames, such as “Dave” for “David,” then the system would 

return a large number of false non-matches. Similar issues arise with addresses and other 

identifiers, for example, the use of “St.” or “Str.” for “Street.” Acknowledging that variations 

like these should be allowed, however, leads to the considerable challenge of exhaustively 

defining what constitutes an “exact match.” Efficient matching demands that tolerance for 

spelling variations depend on the context. For example, “Clarence Smith” and “Clarenw Smith,” 

are likely to refer to the same person, whereas “Mary Jones” and “Mark Jones,” probably refer 

to different people. No rigid and simple rule specifying, for example, the number of mismatched 

letters allowed, can capture the subtleties required for an efficient matching algorithm. 

143. FACT Act § 318(a)(2)(A)(ii).
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b. Matching on more data elements does not always guarantee a better match

Flexibility is also important in determining what combinations of identifiers should be 

allowed as a match. Even when several elements match exactly, other elements may indicate that 

the overall match is poor. Consider the following two pairs:

Eli C. Whitney Eli W. Whitney

333 E. Main St. 333 E. Main St.

Maplewood, TX 75200 Maplewood, TX 75200

Phone: (214) 555-1234 Phone: (214) 555-1234

Birth date: 2/14/1955 Birth date: 5/27/1982

Thomas Edison Edison Thomas

4275 N. Maple St. 4275 North Maple St.

Chicago, IL 60600 Chicago, IL

Phone: (312) 555-4567 Phone: 

Birth date: 3/14/1965 Birth date: 01/01/1966

The first pair matches exactly on many points of identifying information: first name, last 

name, address, ZIP code, and phone number, but it is likely to be a bad match. The difference in 

middle initial and birth date suggest a strong possibility that this pair represents a father and son. 

Because of this, the exact match on other identifiers becomes much less important. By contrast, 

the second pair matches exactly only on address and city. However, this pair is much more likely 

to represent a good match, because the discrepancies in name and birth date are easily explained 

as the result of small errors.

c. Some identifiers are more discriminating than others

Efficient matching also requires matching algorithms that take into account how 

discriminating a particular identifier is. For instance, the CRAs may use stricter matching 

requirements for a consumer with a common name than for a consumer with an unusual one. 

Consider the following pair of records:

John Smith J. Smith

1324 Mulberry St. 210 Plum Ave.

New York, NY Yonkers, NY

SSN: 123-55-1234 SSN: 123-55-2134

This could represent the combination of a move and a typographical error in the SSN, or it 

could represent two people with similar names who have very similar SSNs. If instead of “John 

Smith,” the names were “Zbigniew Brzezinski/Z. Brzezinski,” then the likelihood that the SSN 

had been mistyped would be much larger, and one would be much more confident that these 

records should match.

It would be extremely difficult for even a carefully crafted rule to capture all of the 

complexities of an efficient matching process. Even if such a rule could be developed, it might 

inhibit innovation or prevent changes to keep pace with developments. For example, new 

identifiers could become available, or technological changes might allow improvements.
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The following two sections address more specifically the costs and benefits of the “exact” 

match proposal for the relevant use – file building and file retrieval.

3. Costs and benefits of matching rules for file building

a. Effects on accuracy and completeness

This section considers the impact of matching requirements on file building – that is, 

requirements that would govern when CRAs are allowed to add data to a consumer’s file or to 

merge files. 

The benefit of the proposed “exact” match rule would stem from a decrease in mixed files, 

serving the proposal’s purpose to enhance the accuracy of consumer reports. Mixed files are not 

always harmful to consumers,144 but when the information is harmful, a consumer may be denied 

credit or offered less favorable terms because of information that in fact belongs to someone 

else. Such a consumer may lose an important opportunity – for example, an offer on a new home 

might not be accepted. Although consumers have the right under the FCRA to correct errors 

through the dispute process, this task requires time and effort on the consumer’s part. Some 

consumers also report considerable difficulty in removing another person’s accounts from their 

files and preventing such accounts from reappearing in the future. 

The proposed “exact” match requirement would decrease the completeness of consumer 

reports, however, and this has real costs for consumers. When files are incomplete, an 

individual consumer may suffer because his or her consumer file is missing information that 

would demonstrate creditworthiness. The decrease in completeness would be most severe for 

consumers whose files are relatively difficult to link – for example, consumers who move often, 

who change their names, or whose names or other identifying information are particularly 

prone to data-entry errors. A reduction in completeness will also harm the system as a whole by 

reducing the information available for making credit decisions. Currently, a relatively positive 

credit history predicts a low default risk, making it a very valuable signal of creditworthiness. 

If creditors knew that information might be missing from a consumer report, they would find a 

good consumer report much less predictive, which could lead to higher expected default rates, 

increased interest rates, and/or a decrease in the amount of credit extended to consumers.145

It is difficult to estimate precisely the extent of these effects. As noted above, there are no 

reliable estimates of the frequency of inaccurate or incomplete files under current practices, so it 

144. When a consumer’s file includes information that pertains to someone else, the mistake can either help or hurt 

the consumer. For example, 85% of credit accounts contain no derogatory information. Adding an account 

in good standing could either help or hurt a consumer’s credit score, depending on other elements in the 

consumer’s file. See 2003 FRB Study, supra note 2.

145. This situation arises because a higher default rate would mean greater losses for lenders. To compensate, 

lenders would either have to raise interest rates or stop lending to certain borrowers.
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would be hard to estimate the likely effect of changes to these practices.146 However, the sample 

rule proposed in Section 318 – which would require an exact match on five elements: first and 

last name, SSN, address, and ZIP code147 – would likely reduce the creation of new mixed files to 

almost zero and dramatically increase the number of fragmented files. This would result because 

an individual’s records could be linked only if he or she had provided the exact same identifying 

information to every creditor, and only if all creditors had entered the information fully and 

correctly. If these conditions were not met, the records could not be linked and a new file would 

be created. For example, the CRAs report that, in the information they currently receive from 

furnishers, the SSN is present less than 90% of the time.148 Under a five-point requirement, 

information without an SSN would be lost completely, because it could never be merged with 

another file. Other updates could not be merged because of mistakes or data variations. Changes 

of address or names would be a particular concern – a five-point matching rule would leave no 

means for the CRA to link the records of an individual whose name or address had changed 

to that person’s records before the change, unless an update included both the old and new 

identifying information.149

A less stringent requirement would have less impact on completeness but would still 

decrease it. For example, a rule might specify a list of four identifiers (such as name, address, 

birth date, and SSN), and require that at least three match to a “reasonable degree of certainty.”150 

This would not eliminate all the mixed files that would be eliminated by the stricter five-point 

rule considered in the Act, but it would have a less dramatic effect on incompleteness. It is hard 

to determine the extent of these effects in advance of implementing the requirement.

The FACT Act also asks the FTC to consider the effects of allowing CRAs “to use partial 

matches on social security numbers and name recognition software,” which the FTC interprets as 

techniques that identify two names or SSNs as similar even when they are not exactly the same. 

As discussed above in section IV.B.1.b., the CRAs already allow partial matches on SSNs and 

names because of the large numbers of errors and spelling variations in the data they receive. 

146. In discussions with FTC staff, the CRAs stated that they have difficulty estimating the extent of mixed and 

fragmented files. Through the dispute process, they have estimated the fraction of disputes that lead to the 

discovery of a mixed file, but these estimates vary considerably among CRAs, from less than 0.2% to almost 

5%. (It is not clear whether this reflects significant differences in the number of mixed files, or differences in 

the way the CRAs classify consumer disputes.) As discussed above, because the CRAs tolerate a substantial 

number of fragmented files to prevent mixed files, the number of fragmented files is likely to be far greater. 

Indeed, the CRAs have tens of millions more files in their databases than there are credit-using consumers in 

the U.S. One CRA reports that the number of files in its system is typically more than 1.5 times greater than 

the number of actual consumers.

147. In considering this rule, the FTC interpreted an “exact match” strictly, assuming for example, that every 

character in a name must match, so that “Tom” and “Thomas” are not considered an exact match. Further, if 

information were missing (for example, no SSN is provided), an exact match would be impossible.

148. FTC staff communication with CRA representatives.

149. The CRAs estimate that about 50% of inquiries would not meet the five-point matching rule for providing a 

file. See infra note 155 and text accompanying. The number of new records that could not be added under the 

proposed five-point rule could be in the same range.

150. The quoted language is from the California statute that somewhat parallels the FACT Act proposed 

requirements on matching; see notes 156-157 infra. An approach specifying a minimum number of matching 

elements is also analogous to one taken in the FTC’s consent agreement with Equifax. See Equifax Credit 

Info. Services, Inc, 120 F.T.C. 577 (1995).
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b. Matching proposal would facilitate “file segmentation” abuses

Another cost of the proposed matching requirement would be to make “file segmentation” 

strategies easier. Because of the serious consequences of a bad credit history, some consumers 

currently attempt to manipulate the system to escape their existing credit history. File 

segmentation is a strategy in which the consumer attempts to establish a new credit identity 

by applying for credit using identifying information that will not be matched to the customer’s 

existing file.151 Requiring a match on a minimum number of points of identifying information 

would make such abuse easier. For example, if a match on address were necessary before an 

account could be added to a file, then by simply moving (or applying for credit using an address 

not previously used, such as a P.O. Box), a consumer could establish a new credit profile.

An increase in file segmentation would be particularly harmful to consumers with relatively 

little credit history. Because lenders cannot distinguish such consumers from bad credit risks 

who have managed to establish a new “segmented” file, an increase in segmented files would be 

likely to make lenders hesitant to extend credit to a consumer with a “thin” file.

4. Costs and benefits of matching requirements for file retrieval

This section considers the effect of requirements that apply to file retrieval, but not file 

building. 

The potential benefit of the proposed “exact” match requirement would be to decrease the 

provision of the wrong consumer’s file to users and to impede identity theft, thereby meeting the 

proposal’s goal to combat the provision of incorrect consumer reports to users.152 The potential 

costs would be an increase in the frequency with which a user’s request does not return any file, 

which would, at a minimum, cause confusion, inconvenience, and delay for some consumers 

seeking credit. Also, consumers would likely be forced to provide more information when 

applying for credit. Although this might create additional challenges for identity thieves, it 

could also be costly for consumers who are reluctant to provide personal information because of 

concerns about privacy or identity theft.153

a. Matching rules would increase no-hits

A stricter matching rule for file retrieval would make it more likely that a file that exists in 

the CRA’s system is not provided when that consumer applies for credit. Currently, between 

five and eight percent of inquiries result in a “no-hit,” that is, a reply from the CRA that no such 

151. See supra note 44 and accompanying text.

152. On the other hand, changes to the file retrieval process would not affect the content of the files themselves, and 

thus would have no direct impact on accuracy.

153. It should be noted that another section of the FACT Act may further the same goals intended by the stricter 

matching for file retrieval proposal. Section 315 requires CRAs to notify the user of a consumer report when 

the address provided by the user “substantially differs” from the addresses on file for the consumer. Although 

the main goal of this provision is to create a “red flag” pointing to possible identity theft, such a notice would 

also notify the user of the possibility of an error. The proposed matching rule would go further, in that it 

would cover more identifiers than the address, and it would prevent the consumer report from being sent in the 

first place, rather than relying on the user to further investigate the source of the discrepancy.
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consumer file exists in the system.154 In many cases, this means that the applicant in fact has 

no file because he or she has no credit history. In other cases, the application contains too little 

identifying information for the CRA to find a confident match. A stricter rule would increase 

the no-hit rate by increasing the number of times that a file is in the CRA’s system but cannot be 

provided. In fact, the CRAs estimate that 50% or more of the files they currently provide could 

not be provided under the requirement of an exact match on first and last name, address, ZIP 

code, and SSN.155

In 1997, California passed amendments to its Consumer Credit Reporting Agencies 

Act, targeted at reducing identity theft, that somewhat parallel the proposed requirements 

on matching.156 One provision of the California law requires that when a retailer requests 

a consumer report for an applicant, the CRA may provide the consumer report only if the 

application matches the credit file on at least three points of identifying information.157 The three 

nationwide CRAs estimate that, as a result of this rule, a large number of consumer reports that 

would otherwise be provided to retailers in California cannot be provided. Each CRA estimated 

somewhat different numbers, but on average the number of reports that could not be provided to 

retailers in California as a result of the requirement was over 10%.158

The economic impact of the increase in California in no-hits is difficult to gauge, in 

part because it is not apparent how retailers and consumers respond to these no-hits. When a 

consumer’s application is rejected because of a no-hit, the consumer may simply reapply with 

more complete information, in which case the costs to the consumer are frustration and delay. 

If the applicant is turned down for a credit account but does not reapply, the applicant and the 

retailer lose whatever joint benefits the account would have generated. 

Some no-hits presumably reflect cases where identity theft is in fact being prevented 

because the identity thief is unable to provide enough identifying information about the victim to 

effect a match. Although this is a benefit to consumers when it in fact frustrates identity theft, in 

most cases a no-hit does not provide a benefit, but rather prevents a consumer’s application from 

being approved.

b. For file retrieval, matching requirements are essentially application requirements

As discussed previously,159 because data are furnished to the CRAs on a voluntary basis, 

matching requirements for file building would be unlikely to have a direct effect on the quality 

of the identifying information that the CRAs receive. In contrast, for file retrieval any firm 

that wanted to receive a consumer report would be forced to conform to rules specifying what 

identifying information must match. The proposed rules could lead creditors to collect more 

complete information from consumers or to check applications more carefully for errors. For 

154. FTC staff communication with CRA representatives.

155. FTC staff communication with CRA representatives.

156. Act of October 7, 1997, Cal. Stat. Ch. 768.

157. See Cal. Civ. Code § 1785.14(a)(1). The points of identifying information include, but are not limited to, 

name, address, SSN, and birth date.

158. FTC staff communication with CRA representatives.

159. See supra page 41.
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example, if the law required a match on SSN, creditors would understand that no inquiry without 

a valid SSN would yield a consumer report. This would presumably lead them to insist that 

applicants provide SSNs with credit applications. 

Thus, a rule requiring an exact match on SSN would be tantamount to requiring the SSN as 

part of any credit application. Errors in the provision of SSNs would still exist, but they would 

be caught more frequently; indeed, if an application yields a no-hit because of an error in the 

SSN, the unexpected outcome might lead the consumer to double-check the number. In addition 

to increasing the likelihood that the report a creditor receives is the correct match, the additional 

identifying information would mean that CRA files were more complete, improving the quality 

of future matches.

c. Impact of requiring an exact SSN match

As noted above, a stricter matching rule for file retrieval would make it more likely that 

even an appropriate file that exists in the CRA’s system is not provided when that consumer 

applies for credit. On the other hand, matching rules for file retrieval would increase the 

accuracy of the “match” when a file is, in fact, retrieved. Because of these competing 

considerations, it is not clear that any potential benefits that might flow from absolute matching 

rules would improve upon the existing voluntary system. 

Considering whether it might make sense to “require” provision of an exact match to a SSN 

provides a good illustration of the tradeoffs involved. The SSN’s primary utility is as a unique 

identifier. Errors in the provision and recording of SSNs always will exist, but they would be 

caught more frequently if an exact match were required. Nonetheless, if an application were to 

yield a no-hit because of an error in the SSN, remedying the error would require some additional 

expenditure on the part of the consumer or user. Balanced against this extra expenditure is the 

benefit that would flow from the greater likelihood that the correct file will be retrieved. 

Any impact on preventing and deterring identity theft also should be considered. Identity 

theft stems in part from the SSN’s current use as both an identifier and authenticator.160 Thus, 

simply requiring the SSN is not likely to prevent identity theft. Nonetheless, requiring the 

SSN to match would necessitate that an identity thief obtain that additional piece of identifying 

information, which may prevent or deter some thieves. At the same time, requiring the consumer 

to provide his SSN to the creditor creates another opportunity for the identity thief to intercept 

and misuse the SSN. Other mechanisms, however, such as information security measures and 

alternative methods of authentication, can minimize that risk. Again, given these competing 

considerations, it is unclear what impact mandatory SSN use would have on identity theft. 

D. Conclusion

This study has examined whether the accuracy of consumer reporting would be enhanced 

by adding a requirement that certain points of identifying information match before a consumer 

report is furnished to a user. It has considered two possible approaches to implementing such a 

requirement: (1) requiring a stricter match before adding information to a consumer’s file (file 

160. See supra section IV.B.1.b.
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building), and (2) requiring a stricter match before providing a file in response to an inquiry 

(file retrieval). Both approaches would address important concerns, but they would also entail 

significant costs. Although it is difficult to quantify both the benefits and costs, the Commission 

is concerned that the costs could outweigh the potential benefits.

If the requirement were imposed in the matching process for file building, the result would 

be a reduction in mixed files. Mixed files are costly for consumers, but their cost, and therefore 

the benefit of the proposed requirement, may be mitigated by the dispute process already 

provided in the FCRA. A consumer who is harmed because another consumer’s derogatory 

credit history has been assigned to him has the opportunity to dispute and correct the error so 

that it will not be an obstacle in the future, although the consumer incurs the costs of time and 

resources necessary to pursue the dispute.161 

At the same time, the stricter match proposal for file building would likely lead to an 

increase in fragmented, incomplete files, and thus a decrease in the informativeness of consumer 

reports. If this occurred, the result might be a significant increase in costs of credit for 

consumers generally, because lenders would need to hedge against potentially greater uncertainty 

in assessing their customers’ creditworthiness.

The implications are less substantial when considering the effect of the proposed 

requirement on the matching process for file retrieval, both in terms of benefits and costs. There 

are two potential benefits: (1) a reduction in the number of times a CRA supplies the wrong 

file in response to an inquiry, and (2) an increase in the amount and quality of identifying 

information that users submit when requesting a consumer’s file. 

Still, the incidence of creditors receiving the wrong consumer’s file appears to be quite 

small. When the creditor does receive the wrong file, it is most likely to be one among 

multiple files, which should signal the creditor that one or more of the files may not pertain to 

the applicant. The system might improve if users were required to collect more complete and 

accurate information from applicants, because this would improve the quality of information in 

CRA files. For example, if CRAs were required to match the SSN before providing a consumer 

report, then more consumer files would include SSNs, which would make them more effective 

in matching CRA records. However, such requirements would impose real costs on credit 

applicants – both those who seek to protect their privacy, and those who experience delay and 

frustration in the application process because their application information does not meet the 

matching requirements. 

In sum, there are considerable uncertainties in calculating the costs and benefits of requiring 

several matching points, and it is unclear whether the benefits to consumers would outweigh the 

costs. Moreover, several of the new provisions of the FACT Act – including the requirement that 

a CRA alert a user of a credit report when an address that the user has provided for a consumer 

differs from the address in the CRA’s file – could help ameliorate the problems that the matching 

requirement is intended to solve. The FTC’s ongoing study of accuracy may shed light on the 

frequency with which matching errors occur, and whether the new provisions reduce these errors. 

161. The consumer may also lose an opportunity for a specific transaction, particularly if the dispute takes much 

time to resolve. As noted previously, how CRAs and furnishers handle consumer disputes is the subject of 

another study, which will be separately reported to Congress under Section 313(b) of the FACT Act. 
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For these reasons, requiring several points of matching, as suggested by section 318(a)(2)(A) of 

the FACT Act, appears premature at this time.

V. Same Credit Report

A. Introduction

Section 318(A)(2)(C) of the FACT Act requires the FTC to study the effects of:

requiring that a consumer who has experienced an adverse action based on a credit 

report receives a copy of the same credit report that the creditor relied on in taking the 

adverse action, including – (i) the extent to which providing such reports to consumers 

would increase the ability of consumers to identify errors in their credit reports; and 

(ii) the extent to which providing such reports to consumers would increase the ability 

of consumers to remove fraudulent information from their credit reports.

The proposed requirement is meant to address the situation where a report provided to a 

consumer subsequent to an adverse action notice does not disclose the same information that 

was provided to the creditor. Consumers cannot exercise their rights to identify and correct any 

inaccuracies if they do not see the information that is inaccurate. By requiring that the consumer 

receive the same report used by the creditor, the proposal seeks to ensure that the consumer can 

spot and dispute inaccurate information that would otherwise go undetected.162

To understand the implications of the proposed requirements, Commission staff relied on 

discussions with representatives of consumers, CRAs, and creditors who use consumer reports. 

The Commission also issued a Federal Register Notice that requested input from interested 

parties on a number of specific questions. The notice yielded 63 responses from consumers and 

industry representatives, and these responses were helpful in preparing the study.

Based on this information, the study first discusses the circumstances under which a “same 

report” requirement would be useful to consumers, and then describes the costs and benefits of 

the requirement for consumers and industry. These costs and benefits could vary substantially, 

depending on how the requirement is implemented. As a basis for analysis, this report considers 

two possible approaches. 

• Under the first approach, the CRA that provided the report to the creditor would provide 

the “same report” to the consumer. In this case, the requirement would essentially amend 

consumers’ existing right to receive a copy of their reports following an adverse action. 

Under this arrangement the “same report” would be sent only when a report is explicitly 

requested by a consumer who has experienced an adverse action. 

162. As specified in the FACT Act, this study is limited to situations when a consumer obtains a credit report 

following an adverse action taken by a creditor. Section 603(k)(1)(A) of the FCRA states: “The term ‘adverse 

action’ has the same meaning as in Section 701(d)(6) of the Equal Credit Opportunity Act” (“ECOA”). 15 

U.S.C. § 1681a(k)(1)(A). Under the ECOA and its implementing Regulation B, “adverse action” is defined to 

include denials of credit and, in some instances, charging a higher price or less favorable terms (for example, if 

the creditor makes a counteroffer that is not accepted by the consumer, or if the creditor makes an unfavorable 

change in the terms of a particular consumer’s account). See 12 C.F.R. § 202.2(c)(1).
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• Under the second approach, the creditor who took the adverse action would provide the 

“same report” to the consumer. This approach would be similar to the current requirement 

regarding employers who take adverse actions.163 In this case, the consumer would receive 

a copy of his or her report along with the adverse action notice, without having to request it 

explicitly. 

These approaches are not the only ways that the proposal could be implemented, and 

different choices could lead to different costs and benefits. Where appropriate, this report 

discusses how alternative policy choices would affect the costs and benefits of the measure. 

B. Background

1. How consumers and creditors might see different reports

Currently, the CRAs add information to consumer files when it arrives from furnishers. 

At any given time, the information contained in a particular consumer file is the same whether 

a request to access the file comes from a consumer or a subscriber. If a consumer and a user 

see consumer reports derived from the same file at the same time, the consumer will see all the 

information that a creditor sees.164 This leaves two possible ways that a consumer might not see 

information that the creditor sees: 

(1) the two reports were generated at different times, and 

(2) the consumer’s disclosure request does not identify and supply the same file, or all of the 

files, that were provided to the creditor.

Differences based on timing are probably quite common. Information is constantly being 

added to consumer files or updated as it is received from furnishers, and deleted from files 

when it becomes obsolete. For example, if a user requests a report on April 1 and then rejects a 

consumer’s application, the consumer would not receive his or her free disclosure until a later 

date, perhaps April 20. Any information that has changed between April 1 and April 20 would 

appear on the consumer’s disclosure, but not the earlier report received by the user. 

If the consumer were to receive the historical document that the creditor had relied on, 

it might sometimes help alleviate any confusion about why a credit decision was made. For 

example, suppose a creditor receives a consumer report showing high credit card balances. 

These balances might be lower by the time the consumer receives a disclosure. Seeing the “same 

report” would give the consumer a clearer picture of what had caused the creditor’s decision. On 

the other hand, informing the consumer of historical information might be less likely to further 

163. Section 604(b)(3)(A)(i) of the FCRA requires employers, before taking any adverse action based in whole or 

in part on a consumer report, to provide the employee or job applicant with a copy of the report. 15 U.S.C. § 

1681b(b)(3)(A)(i).

164. The FCRA prohibits CRAs from including certain information in reports to users. For example, inquiries that 

were not initiated by the consumer (e.g., inquiries associated with prescreening) are prohibited by Section 

604(c)(3), and furnishing medical information is restricted to certain circumstances by Section 604(g). 15 

U.S.C. §§ 1681b(c)(3) and (g), respectively. Such information appears in consumer disclosures.
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the primary aim of the proposal, which is to help consumers identify errors and fraud. For this 

purpose, the most recent information is most relevant.

Receiving the “same report” could be much more valuable when a creditor receives a 

consumer report based on a totally different file than the report that would otherwise be disclosed 

to the consumer. There are two situations in which this could occur. First, the creditor could 

receive a report consisting of a single file pertaining to the wrong consumer. Second, the creditor 

could receive multiple reports, while the consumer receives only one of these reports.

Either result can be caused by problems in the identifying information provided by the 

creditor. For instance, suppose Jane A. Smith applies for credit, and that there is another 

consumer with similar identifying information (Jane B. Smith). If the creditor provides incorrect 

or incomplete identifying information to the CRA, it might receive a report on Jane B. Smith 

only, or two consumer reports pertaining respectively to Jane A. and Jane B. In either case, it is 

possible that information pertaining to Jane B. will adversely affect Jane A.

If Jane A. requests a copy of her own consumer report, it is less likely that she will see Jane 

B.’s file. CRAs generally require consumers who seek file disclosure to provide more complete 

identifying information than subscribers who make an inquiry; thus, a consumer request is 

more likely than a user inquiry to screen out files belonging to someone else.165 Even if the 

consumer’s request does initially match another consumer’s file, the requesting consumer might 

still not get to see it because when a consumer’s request matches more than one file, the CRA 

generally requests additional information from the consumer in an attempt to determine whether 

the additional file or files belong to him or her.166 Any files found not to belong to the consumer 

will be excluded from the report that is provided. Although the consumer may end up with the 

correct report, he or she will not have access to the incorrect report used by the creditor, making 

it more difficult for the consumer to determine what went wrong and to correct it.

Some consumers, however, currently do see the same report that the creditor sees as part 

of the credit granting process. Particularly in mortgage lending, some creditors discuss the 

reports directly with the applicants. Also, resellers of “merged” credit reports – typically used by 

mortgage lenders – will retain these merged reports and provide them to consumers when they 

request a disclosure.167

165. One reason for this is that, in providing reports to consumers, the CRAs must establish that the requesting 

consumer is indeed who he or she claims to be, in order to prevent fraudulent access to consumer information 

by others. Requiring sufficient information for authentication purposes means this information is also 

available for matching. When a creditor requests a file, the creditor is in a better position than the CRA to 

verify the consumer’s identity – for example, the creditor may request a copy of a driver’s license or other 

identification. In responding to creditor inquiries, the CRA requires information only for matching, and not for 

authentication.

166. FTC staff communication with CRA representatives.

167. Even if they have provided two separate reports relating to a particular consumer (e.g., because of requests 

from two different mortgage lenders), industry sources indicate that these resellers can and do ask follow-up 

questions to ensure that the report sent to the consumer is the one that was sent to the mortgage lender that 

took the adverse action.
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2. How often do creditors see files that consumers do not see?

As noted above, a consumer and a creditor could see different reports if (1) the creditor 

received a single report based on the wrong consumer’s file, or (2) the creditor received multiple 

reports and consumer received only one. As described in section III, the first scenario appears 

to be uncommon, and generally involves incorrect identifying information being entered in the 

request.168 This situation could occur if two people share some identifying information, and the 

creditor makes an error entering information that is not common to both. It is also possible if a 

creditor requests a report relating to a consumer who is new to the credit system, and therefore 

does not have a file or has a file with only limited information, that the CRA will supply a report 

on an existing file that is the “closest match.”

As to the second scenario, two of the three major CRAs report that they currently do 

not send multiple reports to their subscribers. The other CRA states that, depending on the 

subscriber’s preference, it sometimes supplies reports containing more than one file.169 In these 

cases, the CRA presents each file as a separate report and scores each report separately. 

It appears that in many instances when multiple files are identified in response to a single 

inquiry, one file contains the bulk of the consumer’s credit history, and one or more “secondary” 

files contain relatively little data, perhaps a single account.170 These secondary files contain 

information that the CRA has not been able to assign to this consumer, or any other, with what it 

considers a sufficient degree of certainty to cause it to merge the information. Yet, the CRA may 

still consider the information likely to pertain to the same consumer.

A sample of recent reports obtained by the FTC independently indicates that, for the CRA 

that does provide multiple reports, about four percent of inquiries match to more than one file.171 

However, this CRA has stated that many of its subscribers choose not to receive multiple files 

and request to receive only the single file that best matches their request. The CRA states that it 

supplies multiple files in response to fewer than one percent of subscriber requests.172

168. As discussed in section III, the CRAs report that they receive a small number of complaints from subscribers 

about receiving a single wrong report. See discussion supra page 15.

169. In order to comply with Section 607(a) of the FCRA, a CRA that furnishes multiple files (including 

fragmentary files) in response to an inquiry on a single individual must have reasonable procedures to assure 

that the information it furnishes pertains only to that consumer. In other words, a CRA cannot furnish multiple 

files unless it has reasonable procedures to ensure that each file contains information pertaining to the same 

consumer.

170. FTC staff communication with CRA representatives.

171. Data provided to the FTC by Fiserv/Chase Credit Research.

172. The CRA also states that, over time, it continues to refine the accuracy of its matching software and to reduce 

the incidence of reports containing multiple files.
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This CRA also has stated that most of the multiple files it sends out apply to the correct 

consumer.173 On the other hand, the fact that the CRA has not merged the files suggests that it 

believes there is a non-trivial probability that the files belong to different people. If so, and if the 

creditor does not recognize the error, then the creditor may evaluate the consumer’s application 

based on information that does not pertain to him or her, but the consumer may have no way to 

discover the problem by requesting his or her report from the CRA.

3. What do creditors do when they receive multiple reports?

As noted above, many users of consumer reports choose not to receive multiple reports, and 

ask to receive only the report based on the “best match.” When a creditor chooses to receive 

multiple reports, the creditor is likely to recognize that multiple reports signal greater than 

normal uncertainty about whether all the reports in fact apply to the consumer in question. The 

effect of any “secondary” reports on the consumer depends on what the creditor does in this 

circumstance.

There is evidence that some creditors take steps to verify whether multiple reports indeed 

apply to the consumer in question, particularly in the mortgage industry. A creditor may attempt 

to verify the applicability of a report either directly or by using a reseller. One service a reseller 

provides is to investigate whether the file or files furnished actually pertain to the applicant. 

Creditors can also resolve questions by manually reviewing the files or by taking the additional 

step of contacting the consumer. The benefit to the creditor of verifying the applicability of the 

file is that the creditor could avoid rejecting a loan that would, in fact, meet its standards. The 

greater the potential revenue associated with making a loan, the more likely a creditor would be 

to bear the costs associated with such steps.

According to the Mortgage Bankers Association, the general practice in the mortgage 

industry is to discuss any significant derogatory credit item with the consumer before a final 

credit decision is made. Mortgage lenders make this effort because mortgage loans typically 

involve greater revenue and because compensation for loan officers and mortgage brokers 

typically depends on the loan closing.

Similarly, a credit union officer stated that credit unions generally follow this practice, 

not only for mortgage loans, but for all loans.174 Moreover, Boeing Employees’ Credit Union 

indicated that the first step for any creditor is to determine if there is an obvious reason why 

there are multiple “in-files,” such as a generation issue (Junior and Senior), married/maiden/

hyphenated name issue, or some other logical issue. Boeing also pointed out that in processing 

173. As a basis for this claim, the CRA cites two sources of information. One source is feedback from creditors. 

As discussed below, there are a number of creditors who, when they receive a report containing multiple files, 

attempt to verify the applicability of the files to the consumer by contacting the consumer and obtaining more 

information. Such creditors might be expected to inform the CRA if they found that most “secondary” files 

pertain to the wrong person. Another source is research that the CRA has done on the accuracy of its matching 

procedures, the details of which were not disclosed by the CRA.

174. Telephone conversation with Beverly Rutherford, Vice President/Compliance, Virginia Credit Union, Inc. 

(Sept. 16, 2004).
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loan applications, multiple “in-files” are screened out of automated decision and require manual 

review by an underwriter, who can ask for additional information from the consumer.175

When creditors take steps to verify the applicability of any files they receive, the “credit 

report that the creditor relied on” is the report or reports that the creditor determined in fact 

pertains to the consumer, rather than all the reports that the CRA sent. However, it is not clear 

whether this practice is common among creditors as a general matter. For example, for creditors 

who use automated loan approval systems, it is costly to subject files to additional manual 

review. When such creditors choose to receive multiple reports, it is unclear how often they 

perform any “check” on the applicability of the files they receive. 

C. Benefits and Costs of a “Same Report” Requirement

As noted above, this study addresses two ways to implement the proposed requirement: 

(1) requiring CRAs to provide a copy of the same report that they furnished to a creditor 

when the consumer subsequently requests a consumer disclosure, and (2) requiring creditors 

themselves to provide a copy of the report they used in making a decision. The discussion below 

focuses first on the benefits and costs to consumers, regardless of who provides the report, and 

then on the benefits and costs that are specific to how the requirement is implemented.

1. Benefits to Consumers

The proposed “same report” requirement is intended to ensure that consumers always know 

what information was used by creditors in taking an adverse action. Consumer groups have 

argued that this is important both so that consumers can “discover and correct any inaccuracies 

that may be contained in credit reports received by creditors,” and so that when consumers 

dispute information with creditors, both parties “refer to the same information to ensure that they 

are reviewing and discussing the same report or information . . . .”176 

The proposal would provide these benefits in situations in which a report provided to a 

consumer following an adverse action does not include information that was contained in the 

report furnished to the creditor. To assess the likely benefits of the proposal, it is important to 

know how often this situation arises and to what extent the proposal would help consumers 

address it.

At present, it is unclear how often creditors base decisions on information from a report 

that is not disclosed to the consumer, or how often these cases result in adverse actions. In order 

to estimate the extent of these errors, one would need a random sample of consumer files relied 

on by creditors in taking an adverse action, the correct consumer files at the time of the adverse 

actions, and input from the creditors or some other means of evaluating whether the adverse 

175. Comment of Boeing Employees’ Credit Union, at 2. Comments received in response to the FTC’s Request 

for Public Comments on the “same report” proposal are available at: http://www.ftc.gov/os/comments/

factaadverseactstudy/index.htm.

176. Comment of The National Consumer Law Center, the Consumer Federation of America, Consumer’s 

Union, The Electronic Privacy Information Center, The Identity Theft Resource Center, Privacy Rights 

Clearinghouse, Privacy Times, and U.S. Public Interest Research Group, at 3.
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actions would have been reversed if the correct file had been used. This information could not be 

obtained within the time frame of the study, and it is unclear whether it could be obtained even 

with a longer time frame. 

The problem could occur in particular when a creditor receives multiple consumer reports 

and takes an adverse action based on negative information contained in a report that does not 

belong to a consumer. Multiple reports are sent in less than one percent of cases by one of the 

three nationwide CRAs, but this could still translate into a significant number of reports each 

year. Even in these cases, however, the benefits of the proposed “same report” requirement are 

unclear.

The CRA that sends multiple reports argues that in most cases, the “secondary files” that 

are sent do pertain to the correct consumer.177 In these cases, the CRA says that the consumer 

will see the same information the creditor sees. Sometimes, a consumer’s disclosure request will 

provide enough information for the CRA to merge the files, and so the consumer will receive all 

the information in the form of a single file. If the CRA is not confident enough to merge the files, 

but cannot confirm that the “secondary” files belong to another consumer, then the CRA says it 

will send the multiple files to the consumer as well.

If the secondary file in fact contains negative information that pertains to a different 

consumer, the problem is potentially more serious. When this occurs, the harm to consumers 

– and the benefits of the proposed requirement in addressing this harm – depend on how the 

creditor processes the reports it receives. For example, receipt of multiple reports should act 

as a signal that the creditor should take care to check that the information in fact applies to the 

applicant. For mortgage transactions, where stakes are arguably the highest, further review in the 

case of multiple reports appears common. Other creditors, particularly those who use automated 

systems for credit approval, may not take extra steps to evaluate multiple reports.

The benefits of the proposal would also depend on the actions taken by consumers in 

response to the information shown in the “same report” and the likely outcome of such actions. 

For example, if a secondary file had been created as the result of identity theft, the “same 

report” requirement could bring the fraudulent activity to the victim’s attention. Learning about 

the file would enable the consumer to file an identity theft report and dispute the fraudulent 

information.178

When the CRA has sent a secondary file that is not created by identity theft, but in fact 

belongs to a different consumer, fixing the problem could be more difficult. Even if the CRA 

learns that a particular file does not belong to a consumer, it may be difficult to guarantee that 

a future inquiry will not match that same file. The CRA cannot delete the information because 

it presumably pertains to some legitimate consumer. Further, it may be costly for the CRA to 

redesign its matching procedures to prevent any possibility of this occurring.

There are other steps that a consumer could take, apart from informing the CRA, after 

discovering that the CRA had sent a creditor the wrong consumer’s file. The consumer could 

make sure to provide more complete identifying information when applying for credit. He or she 

177. See supra note 173.

178. However, as discussed below, there is also some risk that the “same report” proposal could make it easier for 

identity thieves to operate and thus increase the incidence of fraud.
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can also warn creditors that there is the possibility they will receive a file belonging to the wrong 

consumer. The effectiveness of such steps depends on how the creditor responds. For example, 

if a creditor uses automated systems, it may have limited ability to act on a consumer’s warning 

that the wrong file might be supplied by the CRA.

2. Costs to consumers

Many of the costs of implementing the same report requirement would fall on industry, and 

these costs depend substantially on whether CRAs or creditors provide the reports. Consumers 

would also bear some costs, regardless of who provided the report. 

One cost to consumers results from receiving a report that may be several months old. By 

the time a creditor processes the consumer’s application, informs the consumer of a decision and 

the consumer’s right to obtain disclosure from the CRA, and the consumer requests a report, the 

data in the consumer’s file are likely to have changed. If the data in question are out of date, or 

have been corrected, the consumer might waste time and effort disputing data that are no longer 

inaccurate. The consumer might also fail to uncover inaccuracies that currently exist, but are not 

reflected in the historical document.179

Second, if the same report proposal were to require that reports be sent even to consumers 

who had not affirmatively requested one, the proposal might increase the incidence of identity 

theft.180 Many parties noted that identity thieves might exploit the requirement as a means to 

gain access to another party’s consumer report.181 An increased volume of reports in the mail and 

trash could also enable identity thieves to gain increased access to consumer reports.182 These 

179. As noted by MasterCard International: “[p]roviding consumers with an outdated consumer report can therefore 

provide consumers with a false sense of concern if negative or erroneous information is no longer in the 

consumer’s file, or a false sense of security if the consumer’s file has been damaged more recently than would 

be reflected in the historical consumer report.” Comment of MasterCard International, at 3.

180. A related issue is that the requirement could raise privacy concerns. If the creditor mistakenly relied on a 

consumer report that actually pertained to a different person, the “same report” requirement could mean that a 

consumer would receive another person’s consumer report.

181. This point was made in numerous comments. For example, the American Financial Services Association 

noted:

lenders could inadvertently send credit reports or similar information to identity thieves if lenders 

were required to provide declined applicants with such information ... To require a creditor to send a 

credit report with the adverse action notice could provide perpetrators of identity theft with additional 

information about the consumer that may enable the perpetrator to be more successful on the next 

application for credit in the victim’s name. 

 Comment of American Financial Services Assoc., at 2. See also Comment of the American Bankers 

Association, at 2, Comment of MasterCard International, at 4, and Comment of Background Investigations, 

Inc., at 6.

182. For example, the Boeing Employees Credit Union noted that a requirement to provide a copy of the consumer 

report whenever an adverse action notice is given 

potentially exposes more consumers to fraud or identity theft risk by forcing creditors or CRAs to 

provide a large volume of credit reports to consumers. That volume will travel through channels 

that ultimately put the consumer at risk. If fraudsters are able to use a monthly credit card statement 

to do significant damage to consumers, what will they be able to do with an entire credit report? 
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concerns would be substantially reduced if the “same report” were sent only when a consumer 

explicitly requested one.

3. Costs if the CRA provides the report

The three nationwide CRAs would incur substantial costs from the proposed requirements 

due to the need to design, build, and maintain systems to store historical data. These systems 

would be required to store consumer files regardless of whether an adverse action is taken. A 

CRA would not know in advance which data requests would result in adverse actions, so they 

would need to assume that any report provided might need to be disclosed to a consumer at a 

future date.

As an estimate of this effect, one of the three nationwide CRAs noted that the “same report” 

requirement could eventually swell its database from its current 210 million credit files to 5 

billion records because of the multiple reports retained for consumers. It further stated that the 

increased costs of data retrieval and error correction in such a system “would be passed on in 

higher report prices to creditors.”183 The other two nationwide CRAs each estimate the cost of 

additional equipment and staff necessary for such a system to be in the in tens of millions of 

dollars.184

Given current law, an unintended consequence of the proposal would be to substantially 

increase the quantity of information that a CRA would provide as part of a consumer disclosure. 

Section 609 of the FCRA requires CRAs to disclose all information in the consumer’s file 

at the time of the consumer’s request. Because all information in the consumer’s file would 

consist of every historical document that is being saved, the consumer could receive much more 

information than is needed after requesting a copy of the file.185 One CRA noted that under the 

. . . Our members do not like us mailing their confidential information unless they specifically 

requested it, as mail is not secure. This proposal takes that consumer right away. Additionally many 

consumers just throw this type of information in the unsecured trash can. We believe this is putting 

those individuals at risk for dumpster divers and identity theft and fraud. 

 Comment of Boeing Employees Credit Union, at 5-6. The American Bankers Association made a similar 

point, noting that 

Unlike the case where the consumer has specifically ordered a report and is expecting it, consumers 

denied loan applications will not be expecting or necessarily wanting a credit report. Accordingly, they 

will be less likely to dispose of it properly, either because they overlook it or are not interested. 

 Comment of American Bankers Assoc., at 2. See also Comment of Mortgage Bankers Association, at 3.

183. See Comment of Equifax Information Services LLC, at 4.

184. See Comment of Experian, at 2; Comment of TransUnion LLC, at 4.

185. There may also be other unintended costs associated with the proposed requirement. For example, the 

Independent Community Bankers of America noted that 

if consumer loan applicants were required to receive the same credit report on which an adverse action 

was based, the need to streamline operations and reduce costs might force creditors to use a single 

credit report. This would reduce the amount of information available for underwriting decisions, 

potentially affecting borderline loan applicants particularly, since the reduced information might 

increase the number of loan denials.

 Comment of Independent Community Bankers of America, at 3.
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proposal, consumers would be likely to receive “an enormous disclosure package of multiple 

credit reports issued over a long period of time in addition to the current disclosure copy of their 

credit file.”186

An alternative policy that would avoid the costs associated with the CRAs’ storage of 

historical data would be to simply require CRAs to mail consumers a copy of their consumer 

report at the same time that the creditor is sent a copy of the consumer’s report. This would 

result in all consumers who apply for credit being sent a copy of their consumer report regardless 

of whether an adverse action was taken. However, it is far from clear how consumers would 

react to such a policy. In any given year, some people may apply several times for credit. For 

consumers who are not denied credit, the benefit of receiving all these reports appears limited, 

and it seems likely that they would object to it both as a nuisance and as something that 

increased the risk of identity theft. Moreover, as discussed below, CRAs often provide creditors 

only a credit score or other form of summarized data that would not be readily understood by 

consumers.

This alternative approach would also increase the number of files sent to consumers in a 

year from the tens of millions to the billions.187 The associated costs could increase the cost of 

credit substantially and potentially eliminate the use of consumer reports for certain lending 

decisions.

4. Costs if the creditor provides the report

An alternative way to implement a “same report” requirement would be to require creditors 

to provide each consumer with a copy of the consumer report that the creditor used to evaluate 

the consumer’s application. The creditor could provide this information at the same time 

it provides the triggering adverse action notice to the consumer, obviating the need for the 

consumer to go through the extra step of requesting a disclosure from the CRA.188 The consumer 

would receive the report directly from the creditor and would thus benefit from the timeliness of 

receipt of the report and the ability to immediately interact with the creditor. This approach has 

several drawbacks that could offset consumer benefits, however. 

One drawback of this approach is that the information the creditor receives may be 

considerably less detailed than the information in the CRA’s files. Another concern is that 

sending consumers an unsolicited report might raise privacy concerns and increase the risk of 

identity theft.

In order to comply with such a requirement, creditors at a minimum would have to build 

systems to create a consumer-friendly version of the file that they access and employ personnel 

to respond to inquiries from consumers about their consumer reports. Many creditors use 

186. Comment of Equifax Information Services LLC, at 14.

187. The CDIA estimates that two billion credit reports are sold each year, and that there are fewer than 20 million 

consumer disclosures each year. See Statement of Stuart Pratt, supra note 2.

188. Alternatively, the consumer might be required to request a copy of the report from the creditor during a short 

period after he or she receives the adverse action notice. This would mitigate some of the costs below, but 

would require creditors to retain files containing consumer reports for a longer period of time.
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automated systems and do not receive or keep paper reports. As noted by the American Financial 

Services Association, 

[l]enders receive raw data that they cannot typically print out in consumerfriendly format. The data feeds from credit bureaus are designed for computers to 

communicate with each other. Today’s systems will not allow the typical lender to 

generate a readable credit report from their files.189 

Requiring creditors to provide the “same report” could also result in consumers receiving 

less information than they receive if they seek file disclosure from the CRA under the current 

system. For example, it is common for a creditor to use a credit score or another form of 

summarized data from the CRA in lieu of a complete consumer report. Consumer groups have 

pointed out that the report is only effective if it includes “the specific information that forms the 

basis for the adverse action.”190 If the creditor provided only summarized information to the 

consumer, the consumer could not observe the underlying data that generated the report. In this 

case, the notice might not serve its fundamental purpose, because the summary data might not 

inform the consumer about the specific negative information that led to the adverse action. 

However, consumers might not always need to see all of the specific information. For 

example, if a report contained two scores and it was obvious to the consumer from the identifiers 

that one score belonged to someone else and was the reason for the denial, the scores would be 

sufficient to inform the consumer of what had happened. Even if a consumer did not receive the 

same report, the adverse action notice supplied pursuant to the Equal Credit Opportunity Act, 

which is typically supplied concurrently with the FCRA adverse action notice and requires that 

the consumer be informed of the “specific reasons” for the adverse action,191 may itself alert the 

consumer to inaccuracies in the underlying consumer report – for example, if one reason for 

adverse action were “too many finance company loans” and the consumer knew that he or she 

had no finance company loans. 

The proposal could be implemented in such a way as to require creditors to supply the 

underlying information that had generated the score, but this would impose additional costs on 

creditors. Creditors would need to purchase, store, and process information that they do not 

otherwise need in order to make it available to consumers who experience adverse action and 

189. Comment of American Financial Services Association, at 4. Similarly, Wells Fargo noted that “[t]he 

overwhelming majority of consumer reports used by credit grantors – more than 90% – are obtained in 

electronic format and never converted to paper. In most cases, the contents of the report are analyzed by an 

automated decision system, and even if a ‘manual’ review of the decision is performed, only certain aspects of 

the report will be converted to a human-readable form. Even when a consumer report is provided to a creditor 

on paper, or converted to human-readable form by the creditor, the information is displayed in a highly 

condensed form using codes and abbreviations that would be meaningless to most consumers.” Comment of 

Wells Fargo & Company, at 1. See also Comment of MasterCard International, at 5; Comment of Coalition to 

Implement the FACT Act, at 1-2.

190. Comment of The National Consumer Law Center, the Consumer Federation of America, Consumer’s 

Union, The Electronic Privacy Information Center, The Identity Theft Resource Center, Privacy Rights 

Clearinghouse, Privacy Times, and U.S. Public Interest Research Group, at 5.

191. See 12 CFR § 202.9(a)(2)(i). Section 202.6(b)(6)(ii) of Regulation B, which implements the Equal Credit 

Opportunity Act, also provides a vehicle for a consumer to bring to the attention of a creditor “. . . any 

information the applicant may present that tends to indicate the credit history being considered by the creditor 

does not accurately reflect the applicant’s creditworthiness . . . .” 12 CFR § 202.6(b)(6)(ii).
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request it. Also, creditors would need to purchase this extra information for all consumers, 

because they have no way of knowing in advance which consumers will be turned down on the 

basis of information in the report.192

D. Conclusion

When a consumer disclosure does not include information that led a creditor to take 

an adverse action, the consumer protections provided by the FCRA can be significantly 

compromised. The proposed requirement seeks to address this situation by ensuring that the 

consumer receives the “same report” as that provided to the creditor. Because there may be 

substantial costs associated with the proposal, and given the uncertainty and limited nature of 

its benefits, together with the possibility that new duties under the FACT Act will reduce the 

problem addressed by the proposal, the Commission does not recommend adopting the same 

report proposal at this time. 

This requirement may benefit consumers when a creditor has relied on a report regarding 

the wrong consumer in lieu of, or in addition to, a report regarding the correct consumer. In 

such cases, the consumer would be able to quickly determine what had gone wrong and begin 

to take steps to address the problem. As discussed above, this benefit is most likely when a 

creditor’s inquiry identifies multiple reports, but a consumer’s request identifies only one. If 

the “secondary” report or reports contain negative information, the consumer’s disclosure may 

not reveal the cause of an adverse action. We do not at this time have data that allows us to 

determine how often this occurs. However, multiple reports are provided in less than 1% of 

cases, and many creditors take extra steps to determine whether multiple reports all pertain to the 

consumer in question. Therefore, the harm caused in these instances, and the presumed benefits 

of the proposed requirement, are not clear. 

At the same time, the same report proposal would impose substantial costs on consumers 

and industry. The costs to consumers include (1) costs associated with reliance on a historical 

document rather than a current report; (2) privacy concerns raised by receiving a report that 

belongs to someone else; and (3) a possible increase in identity theft if the proposal led to an 

increase in the volume of reports circulating. Although the benefits, if any, would be realized 

in less than 1% of cases, these costs would be imposed every time a consumer is sent a file 

disclosure.

The costs to industry would likely be substantial because: 

• If the CRA were required to provide the “same report,” it would have to build systems to 

store historical documents, even though only a small fraction of these would ever be sent to 

a consumer. This would be expensive, and the higher costs could be passed on to users of 

consumer reports.

• If creditors were required to provide the “same report,” they would have to build systems 

to create and store consumer-friendly versions of these documents. Further, because many 

192. Although the requirement could be fashioned to allow creditors to obtain this information later, after they 

decide to take an adverse action, this would not be consistent with the proposal, because it would not provide 

consumers with the same report that had led to the creditor’s negative decision.
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creditors currently receive only summary or partial data, their disclosure to consumers could 

be missing key information or the creditors would need to supplement their data. 

Because the same report proposal would impose substantial costs to obtain uncertain 

(and likely limited) benefits, it may be more appropriate to develop a response that focuses 

on instances in which the creditor may be using a report that pertains to the wrong consumer. 

Certain provisions of the FACT Act, which are designed to address identity theft and are still 

being implemented, provide such a response. Section 315 requires CRAs to notify the user of a 

consumer report when the address provided by the user “substantially differs” from the addresses 

on file for the consumer, and requires creditors to develop procedures for responding to this 

notification. Section 114 requires users of consumer reports to implement procedures to identify 

and respond to identity theft “red flags.” Such procedures are intended to help creditors spot 

possible instances of identity theft and then to act to prevent the possible identity theft.

Both measures will impose extra responsibilities on creditors to determine that a credit 

applicant is indeed the person to whom a consumer report pertains. Thus, they appear to 

address the problems described in this study more directly than would the proposed same 

report requirement. For example, if the creditor receives two consumer reports, including a 

“secondary” report that pertains to the wrong consumer, it is likely that the secondary report will 

contain an address that does not match that of the applicant. This will trigger a notification under 

section 315. Although the creditor’s obligations under the FACT Act have not yet been finalized, 

it is likely that they will increase the chance that the creditor or consumer will discover whether 

the secondary file in fact pertains to the consumer.

If these measures succeed in ensuring that credit decisions are based on the right applicant’s 

file, the benefits of imposing an additional same report requirement would be reduced 

considerably. Given the substantial costs associated with the proposal, the uncertainty and 

limited nature of its benefits, and the possibility that new duties under the FACT Act will reduce 

the problem addressed by the proposal, the Commission does not recommend adopting the same 

report proposal at this time. 

VI. Negative Information Notices

A. Introduction

Section 318(a)(2)(B) of the FACT Act requires the Commission to study:

the effects of requiring notification to consumers when negative information 

has been added to their credit reports, including – (i) the potential impact of such 

notification on the ability of consumers to identify errors on their credit reports and 

(ii) the potential impact of such notification on the ability of consumers to remove 

fraudulent information from their credit reports.

To understand the effects of the proposed notice, Commission staff consulted the relevant 

literature and conducted interviews with representatives of consumers, CRAs, and furnishers 

of credit information. Based on these sources, the study describes current reporting of negative 
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information and existing negative information notices, and discusses what the Commission has 

learned about the costs and benefits of the proposed requirement.

The goal of a negative information notice would be to give consumers a chance to identify 

and correct any errors in their consumer reports before the errors caused harm. Currently, 

the FCRA requires creditors to notify consumers when they take “adverse action” based on 

information in a consumer report.193 By the time a consumer receives this notification, however, 

it may be too late for the consumer to salvage the transaction by correcting any inaccuracies in 

the report. The idea behind the proposed notice is that consumers would learn about negative 

information in their reports before they apply for credit, when there could be sufficient time to 

remedy any errors. 

The proposed notice could also fill any “gaps” that remain when consumers obtain their 

free file disclosures under the FACT Act.194 The FACT Act now gives consumers the right to 

obtain a free consumer report from each nationwide CRA once a year. This right should help 

consumers spot inaccuracies in their consumer reports and thereby avoid injury. However, some 

consumers might not order reports that they assume will be accurate. Further, even consumers 

who check their consumer reports every year might be harmed if inaccurate information is added 

shortly after they examine the report. 

There are many ways that the proposed notice requirement might be implemented. Some 

of the main issues to consider include: what information would trigger the notice; what form the 

notice should take; and who would send the notice. In order to focus the discussion, the study 

makes the following assumptions:

• The notice would be triggered when a furnisher reports payment delinquencies, collection 

accounts, or public records. The elements that would trigger notification are consistent 

with Section 217 of the FACT Act, which defines “negative information” as “information 

concerning a customer’s delinquencies, late payments, insolvency, or any form of 

default.”195 Other information could lower a consumer’s credit score, but would not 

generally be considered “negative information.”196

• The notice would be required the first time that a particular account delinquency appears 

on a consumer’s report. For example, if a furnisher reports that a consumer is 30 days late 

in paying an account, and the consumer does not pay within the following 30 days, the 

193. See FCRA § 615, 15 U.S.C. § 1681m. See also discussion of risk-based pricing notice infra note 199.

194. FACT Act § 211.

195. As discussed below, Section 217 of the FACT Act requires creditors to notify consumers when they report 

negative information about the consumers to a CRA. 

196. Many types of credit-related activities, such as opening a new credit account, applying for credit, or using 

a high percentage of available credit, can have a negative effect on a consumer’s credit score. However, 

attempting to include any event that lowers a consumer’s credit score would entail sending notices in response 

to relatively innocuous events (such as a change in the balance of a credit card) and would risk reducing the 

impact of the notices by overloading consumers with too much information. This seems well beyond the 

purpose of the proposal. The proposed approach is also consistent with the language of the FACT Act, which 

refers to “negative information [that] has been added to [consumers’] credit reports,” not “information that has 

a negative effect on consumers’ credit scores.” See FACT Act § 318(a)(2)(B).
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furnisher will typically report that the consumer is 60 days late. This study assumes that 

the required notice would be triggered only by the first appearance of a delinquency or 

other negative information on a consumer’s report. Additional notices regarding the same 

event would have sharply diminishing additional benefits in terms of alerting consumers to 

possible inaccuracies.197

• The notice would be specific enough to allow the consumer to dispute the information. For 

example, the notice might state that “This is to inform you that [Creditor] has reported 

that payment on your account ending in [#1234] is 90 days late. This information will be 

included in your consumer report whenever it is provided by [CRA]. If you believe this 

information to be in error, you may contact [CRA]/[Creditor] as follows . . . .”

Either the CRA or the company that furnishes the negative information to the CRA could 

send the notice. Each approach has unique costs and benefits. For example, many creditors 

could provide the notice at relatively little cost, because they are already in regular contact with 

consumers. On the other hand, a notice provided by CRAs could alert consumers to some types 

of error, such as those arising from mixed files, that consumers could not discover directly from 

furnishers. In considering the benefits and costs of the proposal, this report discusses each of 

these approaches.

B. Background

1. Existing notice requirements

The law already requires that consumers in certain situations be notified when negative 

information in their consumer reports has caused them harm. As noted above, an “adverse action 

notice” must be given to any consumer who suffers adverse action based in whole or in part 

on the consumer’s report.198 The FACT Act also amends the FCRA to require that consumers 

receive a “risk-based pricing notice” from creditors that offer credit on terms that are materially 

less favorable than the terms available to a substantial proportion of the creditor’s other 

customers.199 These existing notices seek to alert consumers that information in their consumer 

reports could be affecting them. The proposed notice would notify consumers of negative 

information earlier, which would allow consumers to take steps to address any inaccuracy before 

it causes harm.

Another provision of the FACT Act (Section 217) requires that consumers be notified when 

a creditor reports negative information about them to a CRA. The law provides, however, that 

197. It may be more costly, however, to determine whether each report of negative information is the “first” one 

than to simply send negative information notices whenever negative information is reported.

198. See FCRA § 615 (a), 15 U.S.C. § 1681m(a).

199. Section 311 of the FACT Act amends FCRA Section 615 by requiring that “if any person uses a consumer 

report in connection with an application for, or a grant, extension, or other provision of, credit on material 

terms that are materially less favorable than the most favorable terms available to a substantial proportion 

of consumers from or through that person, based in whole or in part on a consumer report, the person shall 

provide an oral, written, or electronic notice to the consumer . . . .”
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creditors may notify consumers before negative information is reported, including through 

a generic notice in routine statements to customers.200 Therefore, although the Section 217 

notice could educate consumers generally about the consumer reporting implications of account 

defaults, it is unlikely to alert consumers to the need to check for specific potential errors.

2. Sources of inaccurate information

There are three main sources of inaccuracies in consumer reports. Depending on how the 

proposed notice is implemented, it could help address all three, to varying degrees.

• Mistakes in existing accounts. When a furnisher’s records contain errors, the information 

provided to the CRA will also contain errors. When such an error is harmful, the notice 

would call it to the consumer’s attention. As discussed below, consumers already are likely 

to learn about such errors when they have an ongoing relationship with the furnisher.

• Mixed files. When a CRA places one consumer’s information in another consumer’s file, 

the consumer will typically be unaware of the event until the consumer examines his or her 

own consumer report. If the inaccurate information is negative, the proposed notice could 

provide the consumer with early notice of the problem.

• Identity theft. When an identity thief opens new accounts using the victim’s name, the 

fraudulent accounts will appear on the victim’s consumer report. The notice requirement 

could alert consumers to the theft after at least one such account becomes delinquent, 

potentially enabling the consumer to limit the damage.

3. How much negative information is currently reported?

The recent Federal Reserve Board studies (discussed in more detail in Part III of this report) 

provide some insight into how often negative information is reported. These studies use large 

samples from one CRA to estimate the proportion of consumer reports and credit accounts in 

those reports that have various characteristics.201

There are three categories of negative information that would trigger the proposed notice: 

credit account information (such as a late payment or default on a credit card); collections 

information (such as an unpaid utility or medical bill that has been sent to a collection agency); 

and public records (such as a bankruptcy).

200. As required by the FACT Act, the Federal Reserve Board has provided model language for furnishers to use in 

the notice. The model allows for the following language: “We may report information about your account to 

credit bureaus. Late payments, missed payments, or other defaults on your account may be reflected in your 

credit report.” 69 Fed. Reg. 33,281, 33,285 (June 15, 2004) (amending 12 C.F.R. part 222).

201. See 2003 FRB Study, supra note 2; 2004 FRB Study, supra note 38.
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The studies showed the following:

• Three percent of actively reported credit accounts were delinquent (based on data 

collected in 1999).202 In most cases, this figure does not represent the first report of that 

particular delinquency. For example, current payment delinquencies include 90 or 120-day 

delinquencies that typically would have been first reported as delinquencies of shorter time 

periods, such as 30 or 60 days. A reasonable estimate is that, in any given month, about 

one percent of all accounts are being reported as delinquent for the first time, although the 

number could be as low as one-half of one percent.203 A one percent rate would translate 

into over 132 million notices sent each year.204

• 36.5% of files had at least one collection action reported by a collection agency, mostly 

related to unpaid medical and utility bills.205 Such information could be quite old, and it is 

difficult to translate this into an estimate of how often collections information is added. 

• 12% of the sampled consumer reports contained at least one public record item.206 These 

include bankruptcies, tax liens, foreclosures, and civil judgments. 

It should be noted that these estimates reflect only one CRA’s files. Because most large 

creditors report to all three nationwide CRAs, the total number of negative reports could be up to 

three times higher.

202. “Credit accounts” include revolving, nonrevolving, mortgage, and installment loan accounts from financial 

institutions, major retailers, and other businesses such as oil and gas companies. Some utility and medical 

companies also report on their accounts. “Actively reported” refers to credit accounts for which the latest 

report was within the prior two months. Many of these accounts are closed. Overall, 26% of the accounts 

analyzed were not currently reported while 74% were, with 57% of the latter being closed accounts. Thus, 

much of the derogatory information on credit accounts is associated with closed accounts that are still being 

reported.

203. Payment status as of the most recent report is distributed among all credit accounts (currently reported as 

well as not currently reported) as follows: no derogatory, 94.6%; 30-59 days late, 0.5%; 60-89 days late, 

0.3%; 90-119 days late, 0.2%; 120-149 days late, 0.5%; and “other major derogatory,” 3.8%. See 2003 FRB 

Study, supra note 2, at 62 (table 7). Assuming that the “other major” derogatories relate to accounts that are 

not currently reported, it is likely that the negative information underlying these reports has previously been 

conveyed to the consumer. Some creditors, however, do not report delinquencies of less than 60 days, and 

some do not report minor derogatories (delinquencies up to 119 days) at all, which means that some portion 

of 60 plus day delinquencies as well as of the “other” major derogatories may reflect the first appearance of 

delinquency.

204. This figure is based on estimates that, as of 1999, records on about 1.1 billion credit accounts were actively 

reported to the three national CRAs. See 2003 FRB Study, supra note 2, at 52 (derived from information in 

table 2). The number of notices could be roughly 20-25% higher because the Federal Reserve data adjust for 

joint accounts and co-signers so that each account is counted only once. See id. at 54, note 14. Under the 

proposal, notices would be sent to each individual on whose report the negative information appears.

205. See 2004 FRB Study, supra note 38, at 303 (table 1).

206. See id.
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4. Current examples of negative information notices

a. Notification in Colorado

The Colorado Consumer Credit Reporting Act requires CRAs to notify a consumer by 

mail and provide him or her with the ability to request a copy of her consumer report, whenever 

either of the following events occurs within a 12-month period: (1) the CRA receives eight credit 

inquires pertaining to the consumer or (2) the CRA receives a report that would add negative 

information to the consumer’s file.207 Thus, Colorado has already imposed one specific form of a 

negative information notification requirement on CRAs.208

The CDIA reports that, over a typical one-year period in Colorado, CRAs on average sent 

2.6 million of these notices to consumers. As a result of these notices, an average of 180,000 

consumer reports were sent to consumers by each CRA, which in turn generated an average of 

9,000 calls or inquiries (including disputes) by consumers. Thus, 5% of consumer reports sent 

pursuant to the Colorado requirement were associated with a call to a CRA, and about 0.34% of 

the original notices were ultimately associated with a CRA contact. These numbers indicate a 

low contact rate for the CRA notice of negative information required in Colorado.209

b. Market-provided credit monitoring services

Recently, a market has developed for credit monitoring services offered by the nationwide 

CRAs and others. These services offer consumers notification, often by electronic mail, when 

certain types of information are added to their credit files.210 Consumers must sign up for 

these fee-based services in order to receive the notices. This market is only just emerging 

and is in flux; it is currently not known how much the market may grow or how effectively it 

will function. However, the development of this market provides evidence that notification of 

negative information is valued by at least some consumers, and that the market is providing one 

type of response.

207. Colo. Rev. Stat. Ann. § 12-14.3-104(2) (2004). The Colorado law provides generally that consumers may 

obtain one consumer report annually from each CRA at no cost, but the notification provision does not provide 

the right to an additional free report.

208. The Colorado law, however, requires that consumers be notified, at most, only once per year. This means that 

a number of distinct pieces of negative information could be added to a consumer’s consumer report before the 

consumer is notified of any of them. See id. § 12-14.3-104(2)(b). Note also that the law requires notification 

of a substantial number of inquiries, as well as of the addition of negative information. See id. § 12-14.3-

104(2)(a). A spike in inquiries can indicate the presence of fraudulent activity, similar to a spike in new 

accounts opened.

209. It is unclear what proportion of the Colorado notices are sent only because negative information was added 

to a consumer report, or because the CRA received eight or more inquiries about the consumer. Another 

qualification of the Colorado data is that consumers are notified about information added to their consumer 

reports over the entire previous year, rather than only very recent information, and this may reduce the contact 

rate.

210. All three nationwide CRAs sell credit monitoring services directly to consumers. Some other firms offer the 

service, either selling directly to consumers (as with Fair Isaac) or through credit card companies (as with 

Intersections, Inc.). See Lavonne Kuykendall, Young Credit Monitoring Firm Gets Cap One Feather in Cap,

American Banker, Sept. 15, 2004, at 7. The article also reports that the top six firms that offer monitoring 

services have over 20 million subscribers.
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C. The Benefits and Costs of Negative Information Notices

1. Benefits to consumers of early notification

Currently, consumers often discover harmful errors only after experiencing an adverse 

action. In some cases, learning about the error earlier would have had considerable benefits. 

For example, suppose a consumer makes an offer to buy a house, but the consumer’s mortgage 

application is turned down because of an error in his or her report. It will take some time to 

correct the information with the CRA, and in the meantime the seller may find another buyer for 

the house. Moreover, there is no guarantee that the consumer will be able to convince the lender 

to reconsider his or her mortgage application. The proposed notice would give consumers a 

better chance to correct errors before they create these obstacles.

For victims of identity theft, early notification could provide the opportunity to prevent the 

thief from causing further damage. However, when it comes to identity theft, notification after 

negative information has been added to a consumer’s file may be “too little, too late.” Among 

other things, many victims would receive the notice only after the fraudulently opened account 

had become delinquent. The Commission’s study of identity theft indicates that many victims 

discover the identity theft within 30 days of the theft, and most victims discover the theft within 

60 days.211 It would generally be at least 30 days, and probably much longer, before the resulting 

negative information would be reported to a CRA. Consumers would gain more from a notice 

that occurs earlier, such as at the time the thief first opens an account in the victim’s name. 

Such notification is offered with some credit monitoring services, and this is the motivation 

for Colorado’s inclusion of inquiries as a source of notices. Other measures in the FACT Act 

will require creditors to look for “red flags” identifying potential identity theft, such as address 

changes.212

2. The cost of additional disputes

To the extent that the negative information notice would increase consumers’ detection 

and disputing of possibly inaccurate information in their reports, that benefit would come with 

an associated cost. It is costly for consumers, CRAs, and furnishers to generate and process 

disputes. These costs, however, are a necessary part of the dispute resolution mechanism 

prescribed by the FCRA. In other words, the FCRA reflects a congressional judgment that the 

cost of resolving disputes (including invalid disputes) is generally justified by the benefits of 

211. FTC’s Identity Theft Survey Report is available at http://www.ftc.gov/os/2003/09/synovatereport.pdf (the 

data cited, however, were obtained from the survey results and were not included in the published report). 

For the purposes of the Identity Theft Survey, “identity theft” includes fraudulent use of an existing account. 

Victims may discover fraud sooner in those cases because the fraudulent activity will appear on regular billing 

statements.

212. See FACT Act § 114. Another provision under the FACT Act will require CRAs to notify potential credit 

grantors when an application for credit carries an address significantly different from the one that the CRA has 

on file for that consumer. See FACT Act § 315. If the creditor notes multiple addresses for the applicant, and 

sends a negative information notice to both addresses, victims would be more likely to learn about negative 

information caused by identity theft. More importantly, the provision should improve the ability of creditors 

to detect attempted identity theft in the first place, decreasing the number of inaccuracies that arise from it.
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correcting erroneous information. However, without data indicating whether disputes generated 

by negative information notices are more or less likely to lead to invalid disputes than are 

disputes under the current system, it is not possible to assess additional costs and benefits from 

the notices’ potential to generate more disputes. 

3. Provision of notice by furnishers

Requiring furnishers to provide the proposed notices would generate costs for furnishers, 

and at the same time might not achieve all of the benefits intended by the proposal. Although 

most furnishers are already in regular contact with consumers, they likely would need to revise 

their systems and procedures to add the notice. For example, if furnishers were to provide 

the notice to consumers through a regular billing statement, they would need to link their 

billing systems with their information furnishing systems – that is, the system that generates 

regular statements to consumers of amounts due would also have to notify consumers of what 

information was furnished to CRAs.

Where there is no monthly statement, it would not be possible for the furnisher to notify 

consumers through a regular statement, in which case a new mailing would have to be made to 

the consumer. For instance, creditors may not provide consumers with regular statements for 

certain types of accounts – e.g., some closed-end credit accounts. In addition, some creditors 

may not send a statement if there was no billing activity during a given period.

Although furnisher notices could benefit consumers by enabling them to correct erroneous 

information, those benefits would be limited in certain respects. Furnishers are not in a position 

to notify consumers about every type of negative information that might be added to their files. 

For example, most public record information is not “furnished” by the entity that generates the 

information (e.g., county courthouses) but is gathered by independent contractors who in turn 

supply it to CRAs.

Further, to the extent furnishers do know about the negative information, they may 

already be informing consumers about it. There are three types of records that could contain 

negative information: credit accounts, collection accounts, and public records. When negative 

information is added to credit records, consumers generally learn about it directly from the 

creditor (i.e., the furnisher). The creditor usually sends the consumer a regular billing statement, 

and will often make further efforts to notify consumers about any delinquency. This means that 

if a creditor mistakenly adds negative information to a consumer’s account, the consumer will 

already have a chance to discover it and incentives (such as avoiding added interest or fees) to 

dispute it. In this circumstance, a separate notice would not be useful in alerting consumers that 

negative information has been added to their accounts.213 

213. Under the proposed requirement, the creditor would also have to inform the consumer that the information 

will be reported to a CRA. This might be helpful to some consumers. For example, if a creditor mistakenly 

records a consumer as being 30 days late in making a payment, the late fees for this delinquency may be quite 

minor. The consumer may be content with confirming with the creditor that the account is now current, and 

not bother to dispute the accuracy of the past delinquency. But if the consumer knows that his or her credit 

record will be affected, the consumer may be more likely to dispute and correct the reported delinquency.
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For collection accounts, the notice may be somewhat more useful. Although collection 

agencies do not have established relationships with consumers, they contact consumers in 

order to collect payments and often inform them that negative information will be reported to a 

CRA.214 Some debt collectors, however, do not notify consumers that they are reporting negative 

information to a CRA.215 Moreover, the collector may not be licensed to do business in the state 

in which the consumer resides, and therefore collectors believe that they could not legally initiate 

contact with the consumer through a negative information notice.216

For public records, a furnisher notice is not likely to be useful at all. Indeed, public records 

are not “furnished” to CRAs in the way that credit and collection accounts are. Rather, each 

CRA must collect them itself (or hire another firm to do so). Thus, only CRAs are in the position 

to notify consumers when public records are added to their files. The benefits and costs of a 

CRA notice requirement are discussed in the next section.

In addition, when an inaccuracy stems from a mixed file or identity theft, a furnisherprovided notice is likely to fail because it probably will be sent to the wrong consumer.

217

In sum, requiring furnishers to provide negative reporting notices would have some benefits 

to consumers, although those benefits might be limited. At the same time, such a requirement is 

likely to have costs for furnishers that might outweigh any benefits.

4. Provision of the notice by the CRAs 

Requiring CRAs to provide negative information notices would more directly address 

the goals of the proposal. There are certain types of errors that can be detected only through 

the CRAs’ data: mixed files, errors in transmission, errors in public records, and negative 

information due to identity theft. As a result, there is reason to believe that CRAs would be the 

best source of a negative information notice.

 The size of this benefit is unclear, however. First, creditors already have an incentive to notify consumers that 

negative information is likely to hurt their credit ratings because this information helps to motivate consumers 

to pay their bills on time. Second, many consumers are generally aware that failure to pay bills on time is 

recorded in one’s credit history. Third, much of the negative information that is inaccurate will be challenged 

by the consumer simply because the consumer wants to avoid penalties for delinquency, regardless of any 

additional notice required by the FCRA.

214. One reason is that doing so increases a consumer’s incentives to repay the debt.

215. In recent years the Commission, along with consumer groups, has received complaints from consumers that 

collection account information was sent to a CRA without the consumer ever being notified by the collection 

agency.

216. See Comment Letter on Matter No. R411013, ACA International, at http://www.ftc.gov/os/comments/FACTAsummaries/511461-0016.pdf (stating that debt collectors may furnish information to credit bureaus about 

consumers residing in states in which the collector is not licensed to do business, and that any direct contact 

with the consumer might be an “attempt to collect a debt” in violation of state law).

217. For mixed files, if consumer A’s account is placed in consumer B’s file, the furnisher will not realize this 

and will send the notice to consumer A. For identity theft, the victim will be unaware of the theft if billing 

statements are being sent to a false address (a common element in identity theft). In this case, the negative 

information notice would go to the false address as well.
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On the other hand, CRA provision of the notices could entail much higher costs. Every 

year, a considerable amount of negative information is added to consumer reports from a variety 

of different sources. Although much of this information is correct, the CRAs would incur 

substantial expense if they were required to send a notice each time such information is added.218 

The most obvious costs come from processing the notices and mailing them to consumers. 

In addition, the CRAs argue that many consumers are not familiar with the CRAs and it is 

thus not clear how consumers would respond to the proposed notices, especially when they do 

not recognize the sender. Some would not read the notice, or would ignore it if they did read it. 

Furthermore, the CDIA has argued (citing its experiences with the Colorado law) that consumers 

do not like being reminded about negative information of which they are already aware, and that 

many of them, particularly the elderly, find unsolicited notices offensive and even threatening. 

The situation may also open avenues for fraud. In particular, unscrupulous entities posing 

as CRAs might be able to trick consumers into providing personal information under the pretense 

of confirming negative information in a consumer report.219 Furthermore, unsolicited CRA 

notices could provide additional opportunities for identity thieves to acquire consumers’ personal 

information. Since a consumer would not necessarily be expecting a notice, he or she might 

simply throw it away without opening it, unaware that it contains information that could be used 

to open a fraudulent account in the consumer’s name.

Many of these concerns arise from the fact that the CRAs would be sending the notices 

to consumers who are not expecting them. These concerns could be addressed by having 

consumers “opt in” to a system that would notify them when negative information has been 

added to their reports. Such systems are essentially what the market has begun to provide in the 

form of credit monitoring services.

The provision of credit monitoring services requires that consumers pay for a service that 

provides notices relating to changes in their consumer reports. Consumers frequently receive the 

notices by electronic mail, reducing delivery costs substantially. Unlike recipients of unsolicited 

notices, consumers who purchase credit monitoring services are not only familiar with the CRAs, 

but expect to receive notices from them and are willing to pay for them. Because the notices 

are expected, consumers are also less likely to be susceptible to “phishing” and other fraudulent 

schemes. Another advantage of the market approach is that CRAs have incentives to determine 

what products are most useful – for example, some monitoring services notify consumers about 

new accounts, address changes, and significant changes in account balances. 

218. The experience with Colorado’s notices, for example, shows that almost 300 negative information notices 

were sent for every item that was disputed. See discussion supra page 72.

219. The CDIA relates that the Colorado Attorney General’s office discovered that a letter had been sent to 

consumers ostensibly from a CRA complying with the Colorado law. The letter asked consumers to provide a 

host of personal and financial information. No CRA had sent the letter. The practice of “phishing,” whereby 

a party uses a pretext to request personal or financial information from consumers to be used in perpetrating 

credit fraud or identity theft, has raised concerns at the FTC, which has addressed it through enforcement and 

education. See, e.g., FTC v. Zachary Keith Hill, Civ. Action No. H 03-5537 (S. D. Tex. 2004) (final order) 

http://www.ftc.gov/opa/2004/03/phishinghilljoint.htm; see also How Not to Get Hooked by a “Phishing” 

Scam, FTC Consumer Alert, available at http://www.ftc.gov/bcp/online/pubs/alerts/phishingalrt.htm.
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Overall, a market-based notice may be the most efficient one available for improving 

accuracy at minimal cost and ensuring that consumers get notices that they want and will read. 

Consumers have shown that they are willing to pay for such notices, but the market is new and 

evolving, so it is probably too soon to tell whether the benefits to consumers outweigh their 

costs.220 This is particularly true in light of the fact that free reports will become available to 

consumers beginning in 2005. As the market develops, the costs and benefits of these types of 

notices should become more clear. 

D. Conclusion

A negative information notice would encourage consumers to check the accuracy of 

information in their consumer reports when the potential benefits from doing so are the highest, 

enabling them to correct errors before they become an obstacle to obtaining credit, employment, 

insurance, or other services. However, this requirement would also have substantial costs. 

A requirement that data furnishers provide the notice would be costly even when they have 

relationships with consumers, and such a notice would not alert consumers to many important 

inaccuracies, including mixed files, inaccuracies in public records, and accounts generated by 

fraud. A CRA notice could address these limitations, but could be associated with higher costs 

for both consumers and industry. 

An opt-in system in which consumers elect to receive negative information notices would 

avoid many of these costs. The market already provides such a service, for a price. These 

services are new, and are being offered at a time when consumers are becoming more and more 

aware of consumer reports and their importance. Moreover, implementation of free annual 

file disclosures will make an important difference in consumer access to consumer reports. 

Accordingly, the Commission believes that imposing on furnishers or CRAs a requirement to 

notify consumers when negative information is reported is premature at this time. 

VII. Common Unreported Transactions

A. Introduction

Sections 318(a)(2)(D) and (E) of the FACT Act require the Commission to study:

any common financial transactions that are not generally reported to the consumer 

reporting agencies, but would provide useful information in determining the credit 

worthiness of consumers; and 

any action that might be taken within a voluntary reporting system to encourage 

the reporting of [these] types of transactions. . . .

220. Some consumer groups have expressed concern that credit monitoring services may be too expensive for some 

consumers to afford, and that internet-based services would not be accessible to all consumers.
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The concern prompting this request is that many Americans may be missing out on 

the benefits associated with the consumer reporting system even though they may have a 

demonstrable history of financial responsibility. For example, if someone has made mortgage 

payments consistently and on time for many years, this typically will be reflected in his or her 

file in nationwide CRA databases. On the other hand, if someone has paid rent consistently and 

on time for many years, it probably will not. Although both types of payments may be evidence 

of financial responsibility, rental information is generally not reported to the nationwide CRAs 

and thus will not be conveyed to creditors evaluating the renter’s creditworthiness. 

This study differs from the others mandated in section 318 because the Commission has not 

been asked to consider any specific proposal. The goal of the study is to describe the main types 

of transactions that could provide valuable information about the creditworthiness of consumers 

who are not well represented in the consumer reporting system. 

In gathering information for this study, Commission staff contacted a wide variety of 

individuals and groups with an interest in these issues, including consumer representatives, 

CRAs, users of credit information, and organizations attempting to gather and report the types 

of information described in this section of the Act. The study describes what Commission staff 

learned about the obstacles to reporting such “non-traditional” credit information, recent privatesector initiatives to make this information available to creditors, and some measures that could 

be taken to encourage greater reporting of this information.

B Background

1. Who would benefit from the reporting of additional payment information?

Fair Isaac Corporation estimates that of the roughly 215 million non-incarcerated adults in 

the United States, 22 million have no credit files at all.221 An additional 32 million have “thin 

files,” meaning files that do not contain sufficient information to calculate a standard credit 

score.222 Creditors find it difficult to predict performance for consumers with little or no credit 

history, and are therefore reluctant to extend them credit. A lack of credit history information can 

stand in the way of obtaining a credit card, buying a car on credit, or purchasing a home. 

There are a variety of reasons why someone might have little or no credit history. Of the 

54 million Americans without a file that can be scored, about 10 million are recent immigrants. 

Others include young people living on their own for the first time; people who established credit 

through a spouse or other family member and not in their own names; and people who have 

either not used credit or who rely on credit sources, such as pay-day loans, that do not report to 

the major CRAs.

Minorities are over-represented among persons with limited or no credit histories. African 

Americans represent 6.0% of persons with a credit score based on four or more accounts, but 

14.6% of persons without a credit history or with a history too thin to be scored by traditional 

221. Information with respect to Fair Isaac came from the company’s website, http://www.myfico.com, and from 

interviews with Fair Isaac executives.

222. See http://www.fairisaac.com/Fairisaac/Solutions/FICO+Expansion+Score/Value+to+Lenders/.
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models. Hispanics represent 8.5% of those with a credit score based on four or more accounts, 

but 24.5% of those with no credit history or a credit history too thin to be scored.223

The mandate for this study is to determine whether there are transactions that consumers 

with limited or no credit histories undertake that could be reported and would be useful in 

predicting creditworthiness. For some groups, such as young people moving out on their own 

for the first time, the existence of such transactions is unlikely. For the same reasons they do not 

have credit histories, they are unlikely to have histories of other non-traditional transactions that 

could be useful in evaluating creditworthiness. Identifying such transactions is more feasible for 

people who have engaged in repeated non-traditional credit transactions for an extended period 

of time, but who do not participate in mainstream credit markets.

2. The importance of “scoreable” credit files in automated underwriting 

Automated underwriting is a tool that allows lenders to accept applicants based on 

automated decisions, rather than relying on more expensive and time consuming manual 

underwriting. It has become particularly important in the mortgage market – for example, 

Desktop Underwriter is a program provided by Fannie Mae that will tell a lender if Fannie Mae 

will purchase the loan without full manual underwriting.224 According to industry sources, the 

percentage of mortgage loans that are made through automated underwriting has stabilized at 

about 75%. In 2003, 94% of lenders had implemented at least one automated underwriting 

system, up from 83% in 2001 and 91% in 2002.225

 Credit scores are an increasingly important component of many credit transactions, and 

are of particular importance in automated underwriting. Frequently, consumers whose files 

contain insufficient information to calculate a score are not considered in systems that rely on 

automated underwriting. For example, a 2003 survey of mortgage lenders found that “no credit 

score” was the single most important reason why loan applications were not submitted to an 

automated underwriting system.226 Thus, for consumers who currently have no file or insufficient 

information in their file, the potential to build a file through data that are not now reported is of 

heightened value.

223. See Presentation by Eric Rosenblatt, Automated Underwriting for Non-Traditional Credit Borrowers: Where 

Mission, Market Opportunity and the American Dream Converge, Presentation at the Fifth Annual Fannie Mae 

Fair Lending Conference, Washington, DC (Sept. 29, 2004) [hereinafter Rosenblatt Presentation].

224. Information in this section is based on the Rosenblatt Presentation. See id.

225. See id. Automated underwriting has a number of advantages both for lenders and borrowers. A major 

advantage to lenders is that automated underwriting can save them $1,000 per loan versus manual 

underwriting. Automated underwriting streamlines origination and frees up underwriting staff to focus on 

more complex loans. It also facilitates point-of-sale underwriting decisions and allows lenders to expand 

their product offerings using statistically based and validated underwriting models. For borrowers, automated 

underwriting allows them to provide less documentation than traditional underwriting, can carry lower 

origination fees, and can lead to quicker lending decisions.

226. Cited in Rosenblatt Presentation, supra note 223.
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3. Possible additional sources of data

Users of consumer reports have identified several things that they would look for in a 

consumer report system based on non-traditional credit information: (a) the system must cover 

a large number of people without traditional credit files; (b) the data must be predictive of loan 

default, that is, it must provide useful information about whether or not the borrower is likely 

to make timely payments; (c) the system’s effectiveness at predicting creditworthiness must be 

explained and well-supported; and (d) the value of the information must be worth the cost of 

collecting and evaluating it.

In order for data to be a useful supplement or substitute for traditional credit history 

information, the data must be predictive of credit behavior. The most likely data candidates are 

rent payment history and utilities payments.227 These types of payments, as well as remittances 

from recent immigrants to their families abroad, are discussed below. 

a. Rental payment information

In principle, payments for rental housing would appear to be a useful source of information 

for determining whether or not an individual would be responsible in making credit payments, 

particularly mortgage payments. Although rent is not technically credit, because it is paid 

in advance, it is like a mortgage payment in that it is typically a routine, regularly scheduled 

payment. For most people, rent is a major expense relative to income.228

 Given its potential value, the question arises – why is rental information not typically 

included in a consumer report? The most likely answer is the diffuse nature of the rental market. 

Ninety percent of rental units are owned by individual investors, who may own a small number 

of units. Although approximately 35 to 40 million households rent their homes, the top 50 

landlords own only 2.5 million units, less than 8% of the total rental properties. Even these top 

50 landlords would face serious barriers to reporting to the CRAs because they do not typically 

centralize their payment information, but rather maintain it at the rental location. To report their 

tenants’ payment information to the CRAs, landlords would either need to completely revamp 

their recordkeeping systems or submit data from 12,000 different locations. 

One CRA explained that all of the account data it receives from banks and credit unions 

is furnished via approximately 9,500 collection points.229 In contrast, the CRA would have to 

collect data from 12,000 locations in order provide payment information for only 8% of renters. 

This means that collecting rental data covering a substantial portion of renters would be much 

more expensive than collecting data from all banks and credit unions. These substantial costs are 

the biggest barrier to using rental payments to determine creditworthiness.

227. Without collecting and testing the data, one cannot determine with any certainty which types of information 

would actually be predictive of credit performance. Nevertheless, this report discusses various considerations 

and possible effects.

228. Consumers might be expected to perform better on mortgage payments than rental payments. This is because 

mortgage payments are typically a repayment of principal, in part, and therefore a mortgage payment builds 

equity. Further, the costs associated with failing to pay a mortgage – the potentially high costs of foreclosure 

– are probably greater for most people than the costs of eviction.

229. FTC staff conversation with CRA representatives.
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b. Utility payment information 

Utility payment history also appears to be a good candidate for providing information about 

a consumer’s creditworthiness. Utilities’ services are provided on credit, as they are paid for 

after services are provided. Utility payments are sometimes secured by a security deposit, and 

because most utilities have the power to withhold future services, there can be strong incentives 

for customers to pay.

Utilities do not face the same type of problem as landlords in reporting data. There are far 

fewer utility companies in the country, and they have centralized billing systems that could be 

used to generate data for CRA files. Utilities, however, currently provide only limited reporting 

to the CRAs. To the extent that they do report, the information reported tends to be only negative 

information, such as when unpaid utility bills are sent for collection. Although partial reporting 

such as this has some benefits for the system as a whole, it provides no way for a consumer to 

demonstrate consistent on-time payment of utility bills to other potential creditors.

There are a number of reasons why utilities may be reluctant to report their customers’ full 

credit information to the CRAs. Some utilities may face regulatory barriers to reporting. For 

example, one California law forbids telephone companies from revealing payment information 

without the express permission of the customer.230 Further, some state regulatory schemes may 

create disincentives to reporting. Theoretically, utilities should have an incentive to report data 

to the CRAs because reporting such data might encourage consumers to pay their bills on time.231 

However, under certain state rate-setting systems,232 any reductions in cost (including those 

associated with more timely payment by customers) may lead state regulators to lower the rate 

utilities can charge for their services, thereby reducing the incentives for utilities to report. 

Another barrier to reporting may be the costs that the FCRA imposes on data furnishers. 

If utilities reported to the CRAs, they would be required to devote resources to responding 

to consumer disputes concerning information contained in consumer reports.233 CRAs 

and furnishers express particular concern234 about the new requirement for free annual file 

disclosure,235 because they expect that, as more consumers examine their consumer reports, 

more consumers will dispute information contained in them. In addition, one CRA said that it 

230. See Cal. Pub. Util. Code § 2891(a) (2004). . However, such an approach – in which consumers with negative 

information could effectively “opt-out” of reporting their utility payment history – would differ from that 

used in the reporting system in general, which seeks to report comprehensively both positive and negative 

information.

231. As an example, Nicor Gas, a Midwestern utility, experienced a 20% reduction in bad debts over three years 

after it started full-file reporting. TransUnion LLC, TransUnion Case Study: How Reporting Helped Nicor 

Gas Reduce Bad Debt (May 2002), at 2.

232. For example, a “rate of return” regulatory system specifies the rate of return that a utility can earn on its 

capital. Because a reduction in costs would imply a higher rate of return, it will lead to a rate adjustment that 

could eliminate the benefit of the cost reduction. Many states use other regulatory strategies that do maintain 

incentives to reduce costs.

233. In the Nicor Gas example, the annual customer dispute rate was less than 1%. TransUnion LLC, supra note 

231.

234. FTC staff communication with CRA and utility representatives.

235. FACT Act § 211.
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experienced a decrease in reporting by utilities following the 1996 FCRA amendments, which 

imposed liability on furnishers of data.236 

Finally, cellular phone companies rarely provide full-file reporting to CRAs. This appears 

to be at least in part a strategic decision. Because the market is very competitive, with customers 

frequently switching carriers, companies are reluctant to provide information to CRAs which 

may facilitate competitors’ marketing efforts through prescreened offers.237 Because of the value 

of credit data, it is possible that these companies would benefit from providing full-file reports 

to the CRAs; nevertheless, the incentives facing each individual company causes them to choose 

not to report.

c. Other potential sources of information

There may be other information, not currently reported, that would be useful in assessing 

consumers’ eligibility for credit. Most sources of such data have various pragmatic or other 

barriers to traditional reporting.238 At this time, the Commission does not have specific 

information regarding other sources of information or the likely value of their utilization in 

existing credit reporting. As discussed above, several innovative products have recently been 

introduced to address the needs of consumers who lack traditional reported credit experience. At 

this point it is important to gain more experience with the implementation, possible effectiveness, 

and potential benefits of these products.

C. Possible Approaches to Increase Reporting of Non-Traditional 

Credit Data

1. Commercial efforts to supplement existing consumer report data

Approximately 160 million consumers have consumer files that contain enough information 

from which to calculate a credit score.239 The provision of financial services to these consumers 

is considered to be a mature market. In contrast, providing services to the remaining 54 million 

consumers who have no files or whose files currently lack sufficient information for a score 

236. FACT Act § 312.

237. This is similar to the decision by some credit card issuers not to furnish credit limit information to the CRAs, 

which is discussed in Section III of this report.

238. An example is remittances by recent immigrants, many of whom send money to their families in their 

countries of origin. Each year, $70 billion is sent out of the country in this manner. Remittances to Mexico 

alone exceed $13 billion. Although these types of payments do not arise from a business transaction, 

some businesses are exploring whether remittances could be used as evidence of financial responsibility 

and the ability to make regular payments. There are many questions, however, about how a reporting 

scheme for remittances would work. For example, the equivalent of centralized billing records do not exist, 

and these payments do not translate naturally into existing concepts of on-time or delinquent payments. 

Despite these hurdles, several companies are exploring these payments as a possible source of information 

on creditworthiness, including PayRentBuildCredit, Experian, Fannie Mae, and others. See Rosenblatt 

Presentation, supra note 223. See also “A Bid to Cuts Cost [sic] Of Money Transfers For Immigrants,” 

Washington Post, November 29, 2004, E 1.

239. See https://www.ficoexpansionscore.com/Content/LenderValue.aspx (Fair Isaac “Expansion” score website).
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represents an opportunity for growth.240 Credit firms therefore have an interest in products that 

can aid them in assessing the creditworthiness of these consumers. 

One example can be seen in the mortgage market. In a 2003 survey of lenders, respondents 

identified allowing non-traditional credit as the most important change to automated 

underwriting that would allow more loans to be made to under-served groups.241

In response to the demand for information that can be used to estimate the creditworthiness 

of consumers with thin or no credit files, several firms have recently introduced products that rely 

on other sources of payment information. Development of these products is very recent, and in 

some cases the products have been launched during the time this study was being completed. In 

general, however, these developments suggest that the market is rapidly developing mechanisms 

to meet a need. It remains to be seen how successful these efforts will be in expanding 

the benefits of consumer reporting. Thus, we believe it is premature to consider additional 

legislative recommendations at this time.

a. PayRentBuildCredit 

PayRentBuildCredit (“PRBC”) is a new for-profit firm, based in Annapolis, MD, that 

was publicly launched on December 10, 2003. It has introduced one private sector response to 

lack of payment information. The firm is in the process of gathering rental and other payment 

information for the purpose of determining creditworthiness, and considers itself to be a CRA

regulated by the FCRA.242 The firm has also obtained letters from the Federal Reserve Board 

and other government entities stating that lenders will receive credit under the Community 

Reinvestment Act for using PRBC’s services.

In an interview with FTC staff, the firm’s founder and CEO, Michael Nathans, stated that he 

recognizes the difficulties that the major CRAs have had in collecting payment information from 

landlords, and says that he does not believe that this would be easier for his start-up firm. He has 

therefore focused on getting consumers to voluntarily report their rental payment information 

through third parties. As of this writing, these third parties, called “Verification Partners,” consist 

of a dozen firms, including mortgage brokers, realtors, and an insurance company (State Farm). 

The verification partners examine paper records (such as cancelled checks and bank statements), 

verifying that consumers have made rental payments, utility payments, insurance payments, day 

care payments, etc. The consumer and the verification partner jointly enter this information into 

PRBC’s database. Consumers are not charged to enroll or enter their data. Creditors are charged 

a fee to access a consumer’s PRBC consumer report.

240. See notes 221-222 supra and text accompanying.

241. Cited in Rosenblatt Presentation, supra note 223.

242. Information about PayRentBuildCredit is based upon the firm’s website, available at http://www.

payrentbuildcredit.com and FTC staff’s interview with founder Michael G. Nathans.
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b. Expansion 

“Expansion” is a new product from Fair Isaac, introduced in July of 2004.243 It is a credit 

score specifically designed to evaluate those with thin or no traditional credit files. In order to 

sell this product, Fair Isaac has established a CRA subsidiary, which will combine payment data 

derived primarily from non-traditional credit sources, such as payday loan payments and product 

purchase payment plans.244 These data will be maintained in consumer files, which can be used 

to calculate the Expansion score. 

c. NTreport (Non-Traditional Credit Report)

NTreport is a new product from First American CREDCO, a large reseller of consumer 

reports. The company introduced the product in September 2004.245 NTreport is sold as a 

supplement to First American CREDCO’s Instant Merge consumer report. The Instant Merge 

report is created by combining information from an applicant’s consumer reports from the three 

nationwide CRAs. For loan applicants with thin or no consumer reports, NTreport supplements 

the Instant Merge report with “alternative credit sources (e.g., rent payments, gas bills, phone 

bills, etc.).” First American CREDCO has stated that the supplemental information is then 

“researched and verified.”246 The FTC does not have information on the sources of data First 

American CREDCO is using.

2. Possible steps to encourage greater voluntary reporting of non-traditional 

data

Given the diffuse nature of the market for rental housing, the barriers to widespread 

reporting of rental payment information appear to be largely based on cost. For some 

individuals, however, such as people with limited credit histories who wish to buy a home, the 

benefits of credibly demonstrating a good rent payment history may well outweigh the costs. 

Several third-party verification firms, such as PayRentBuildCredit, are trying to provide that 

service. It remains to be seen whether this will be a successful business model.

It may be more feasible to increase the voluntary reporting of utility payment information. 

Data on utility payments are much more centralized than rent payment information, and some 

utilities are already providing full-file reports to CRAs. To the extent that state regulations 

create barriers to reporting, these regulations would need to be addressed at the state level. For 

example, states might actively encourage utilities to report. They might also be able to change 

the way cost savings are treated in the rate setting process. As noted above, current rate-setting 

schemes may create disincentives for the utilities to promote timely payments through reporting. 

243. See https://www.ficoexpansionscore.com/Content/LenderValue.aspx.

244. The National Community Reinvestment Coalition has expressed concern about the product because of the 

use of payday lending data. See Comment of John Taylor, President and CEO of the National Community 

Reinvestment Coalition, RE: FACT Act Scores Study, Matter No. P044804 (Aug. 10, 2004), available at http://

www.ftc.gov/os/comments/creditscoresstudy/index.html.

245. The product is described at First American CREDCO’s website, at http://www.credco.com/emergingmarkets.

246. Id.
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D. Conclusion 

As discussed above, there is a sizeable portion of the population that is difficult to evaluate 

for credit purposes because they have thin credit files or no credit history. At the same time, 

there is a growing interest among providers of credit to serve these customers, and certain nontraditional credit transactions may be useful in evaluating their creditworthiness. These include 

rent and utility payment information. 

Many of the barriers to reporting this information appear to be based on cost. Others may 

be tied to state regulatory systems. Despite these barriers, certain private efforts are underway 

to collect and report this data. These efforts are still at their beginning stages. As they develop, 

the FTC will continue to monitor these effects to determine whether they succeed in providing 

greater access to common, unreported transactions. At this time, however, it appears premature 

to make legislative recommendations to address an issue that is the subject of developments in 

the marketplace that may provide responsive remedies more rapidly and efficiently than statutory 

approaches.

VIII. Conclusion

This report has examined a variety of issues related to the accuracy and completeness of 

consumer reports. It serves as the FTC’s interim Report to Congress under Section 319 of the 

FACT Act, which mandates an ongoing study of accuracy and completeness, and the FTC’s 

Report to Congress under Section 318, which mandates a study of four possible ways to improve 

operation of the FCRA. 

Section III of this report discusses the Commission’s research and findings thus far in 

its ongoing accuracy and completeness study. Among other things, the report discusses the 

history and current practices of the consumer reporting industry; the potential sources of error 

in consumer reports; the accuracy and completeness requirements of the FCRA, as well as FTC 

efforts to promote compliance with them; and the studies conducted to date on consumer report 

accuracy and completeness. The FTC’s review of the studies, which included a roundtable with 

a diverse group of experts, showed that none of the prior studies provided a comprehensive view 

of consumer report accuracy and completeness, and many had methodological problems that 

limit their usefulness as a “baseline” measure. As discussed in the report, the Commission plans 

to conduct a pilot study to determine the feasibility and cost of conducting a more comprehensive 

survey of consumer report accuracy and completeness. 

The Section 318 part of the report assesses the benefits and costs of three specific proposals 

to improve accuracy and completeness – stricter data matching, “same report” disclosures, and 

negative information notices – and examines whether there are common, unreported financial 

transactions that would be useful in determining creditworthiness. Given the lack of a reliable 

baseline to gauge current levels of accuracy and completeness, it is difficult to quantify the 

precise effects of the three proposals. Nevertheless, the studies were able to identify the likely 

benefits and costs and draw certain conclusions. In particular, they concluded that each of the 

proposals addresses important concerns and could benefit some consumers in certain situations, 

but that the costs to consumers and industry as a whole could be substantial. As to common 
86

Federal Trade Commission

unreported transactions, the study concluded that there are such transactions – most notably, 

rental and utility payment information – and that some private sector efforts are underway to 

collect and provide this data to potential creditors.

Based on its findings and conclusions, the Commission is not making legislative or 

administrative recommendations at this time. In addition to concluding that the costs of specific 

proposals examined in the studies could outweigh benefits to consumers, the Commission 

believes that it is premature to enact alternative requirements of this nature. As discussed in 

Part III of this report, the FACT Act imposed a host of new requirements that should further 

enhance the accuracy and completeness of consumer reports, including measures to strengthen 

the dispute and reinvestigation process, a new consumer right to obtain a free annual file 

disclosure, measures designed to reduce identity theft, and new requirements on those who 

furnish information to the CRAs. Many of these requirements are still being implemented, and 

their precise effects on accuracy and completeness are yet to be seen. However, when fully 

implemented, these new requirements are likely to improve accuracy and completeness and 

should also address some of the specific concerns underlying the proposals in Section 318. For 

example, consumers’ new right to obtain a free annual disclosure should help consumers spot 

negative information before it causes harms, consistent with the goals of the negative information 

notice proposal. Also, the FACT Act now requires CRAs to notify users of consumers reports 

when the address provided for a consumer substantially differs from the address in the CRA’s file 

– a requirement that coincides with the proposed matching requirements. 

In addition, the consumer reporting industry is in a period of rapid change, due not only 

to the FACT Act reforms but also to the increasing prominence of consumer reports in today’s 

economy. Once limited to credit transactions, consumer reports are now used, for example, 

to screen job applicants and price insurance. Consumers are also increasingly aware of the 

importance of consumer reports and the need to check their accuracy. In the midst of these 

changes, the market appears to be responding to some of the problems highlighted in the 

Section 318 proposals. For example, the industry now provides credit monitoring services 

that, for a fee, alert consumers when certain information is added to their files. Although these 

services are fairly new, and consumer groups have expressed concerns about their cost, they 

could fulfill some of the same goals as the negative information notice. Further, new products 

have been introduced that attempt to gather information on rental payments, utility payments, 

and other common unreported transactions. The success of these products remains to be seen, 

but they could help ensure that this data is considered in evaluating consumers for credit. The 

combination of new requirements under the FACT Act and recent market developments lead the 

Commission to conclude that additional legislation is not called for at this time.

Finally, the ongoing study that the Commission is considering, beginning with the pilot 

study, should help shed light on the continuing concerns about accuracy and completeness that 

are addressed in this report. As the Commission pursues the study, it will attempt to identify any 

areas where further reform is needed, as well as any improvements observed due to the FACT 

Act or the ongoing changes in the marketplace. 
Federal Trade Commission

Appendix A: Roundtable Federal Register Notice
Federal Trade Commission
Federal Register / Vol. 69, No. 112 /Thursday, June 10, 2004 / Notices 32549

FEDERAL RESERVE SYSTEM

Formations of, Acquisitions by, and 

Mergers of Bank Holding Companies

The companies listed in this notice 

have applied to the Board for approval, 

pursuant to the Bank Holding Company 

Act of 1956 (12 U.S.C. 1841 et seq.)

(BHC Act), Regulation Y (12 CFR Part 

225), and all other applicable statutes 

and regulations to become a bank 

holding company and/or to acquire the 

assets or the ownership of, control of, or 

the power to vote shares of a bank or 

bank holding company and all of the 

banks and nonbanking companies 

owned by the bank holding company, 

including the companies listed below.

The applications listed below, as well 

as other related filings required by the 

Board, are available for immediate 

inspection at the Federal Reserve Bank 

indicated. The application also will be 

available for inspection at the offices of 

the Board of Governors. Interested 

persons may express their views in 

writing on the standards enumerated in 

the BHC Act (12 U.S.C. 1842(c)). If the 

proposal also involves the acquisition of 

a nonbanking company, the review also 

includes whether the acquisition of the 

nonbanking company complies with the 

standards in section 4 of the BHC Act 

(12 U.S.C. 1843). Unless otherwise 

noted, nonbanking activities will be 

conducted throughout the United States. 

Additional information on all bank 

holding companies may be obtained 

from the National Information Center 

website at www.ffiec.gov/nic/.

Unless otherwise noted, comments 

regarding each of these applications 

must be received at the Reserve Bank 

indicated or the offices of the Board of 

Governors not later than July 6, 2004.

A. Federal Reserve Bank of New 

York (Jay Bernstein, Bank Supervision 

Officer) 33 Liberty Street, New York, 

New York 10045–0001:

1. Rhinebeck Bancorp, MHC,

Poughkeepsie, New York; to become a 

bank holding company by acquiring 100 

percent of the voting shares of 

Rhinebeck Savings Bank, Rhinebeck, 

New York.

B. Federal Reserve Bank of Chicago

(Patrick Wilder, Assistant Vice 

President) 230 South LaSalle Street, 

Chicago, Illinois 60690–1414:

1. Wintrust Financial Corporation,

Lake Forest, Illinois; to acquire 100 

percent of the voting shares of 

Northview Financial Corporation, 

Northfield, Illinois, and thereby 

indirectly acquire voting shares of 

Northview Bank & Trust, Northfield, 

Illinois.

C. Federal Reserve Bank of St. Louis

(Randall C. Sumner, Vice President) 411 

Locust Street, St. Louis, Missouri 

63166–2034:

1. First Centralia Bancshares, Inc.,

Centralia, Kansas, and Morrill 

Bancshares, Inc., Merriam, Kansas; to 

acquire directly and indirectly up to 

36.8 percent of the voting shares of 

Century Capital Financial, Inc., Kilgore, 

Texas, and thereby indirectly acquire 

voting shares of Century Capital 

Financial–Delaware, Inc., Wilmington, 

Delaware, and City National Bank, 

Kilgore, Texas.

2. Davis Bancorporation, Inc., Davis 

Oklahoma; to acquire up to 17.90 

percent of the voting shares of Century 

Capital Financial–Delaware, Inc., 

Wilmington, Delaware, and Century 

Capital Financial, Kilgore, Texas, and 

thereby indirectly acquire voting shares 

of City National Bank of Kilgore, 

Kilgore, Texas.

Board of Governors of the Federal Reserve 

System, June 4, 2004.

Robert deV. Frierson,

Deputy Secretary of the Board.

[FR Doc. 04–13148 Filed 6–9–04; 8:45 am]

BILLING CODE 6210–01–S

FEDERAL RESERVE SYSTEM

Notice of Proposals to Engage in 

Permissible Nonbanking Activities or 

to Acquire Companies that are 

Engaged in Permissible Nonbanking 

Activities

The companies listed in this notice 

have given notice under section 4 of the 

Bank Holding Company Act (12 U.S.C. 

1843) (BHC Act) and Regulation Y (12 

CFR Part 225) to engage de novo, or to 

acquire or control voting securities or 

assets of a company, including the 

companies listed below, that engages 

either directly or through a subsidiary or 

other company, in a nonbanking activity 

that is listed in § 225.28 of Regulation Y 

(12 CFR 225.28) or that the Board has 

determined by Order to be closely 

related to banking and permissible for 

bank holding companies. Unless 

otherwise noted, these activities will be 

conducted throughout the United States.

Each notice is available for inspection 

at the Federal Reserve Bank indicated. 

The notice also will be available for 

inspection at the offices of the Board of 

Governors. Interested persons may 

express their views in writing on the 

question whether the proposal complies 

with the standards of section 4 of the 

BHC Act. Additional information on all 

bank holding companies may be 

obtained from the National Information 

Center website at www.ffiec.gov/nic/.

Unless otherwise noted, comments 

regarding the applications must be 

received at the Reserve Bank indicated 

or the offices of the Board of Governors 

not later than July 6, 2004.

C. Federal Reserve Bank of St. Louis

(Randall C. Sumner, Vice President) 411 

Locust Street, St. Louis, Missouri 

63166–2034:

1. First Centralia Bancshares, Inc.,

Centralia, Kansas, and Morrill 

Bancshares, Merriam, Kansas; to acquire 

up to 77.7 percent of FBC Financial 

Corporation, and thereby indirectly and 

indirectly acquire 1st Bank Oklahoma, 

both of Claremore, Oklahoma, and 

thereby engage in operating a savings 

association, pursuant to section 

225.28(b)(4)(ii) of Regulation Y.

Board of Governors of the Federal Reserve 

System, June 4, 2004.

Robert deV. Frierson,

Deputy Secretary of the Board.

[FR Doc. 04–13149 Filed 6–9–04; 8:45 am]

BILLING CODE 6210–01–S

FEDERAL TRADE COMMISSION

Notice of Roundtable To Aid Federal 

Trade Commission Staff in Conducting 

a Study of the Accuracy and 

Completeness of Consumer Reports, 

Pursuant to Section 319 of the Fair and 

Accurate Credit Transactions Act of 

2003

AGENCY: Federal Trade Commission.

ACTION: Notice of roundtable meeting.

SUMMARY: The Federal Trade 

Commission (the ‘‘Commission’’ or 

‘‘FTC’’) is conducting a study of the 

accuracy and completeness of consumer 

reports, as mandated by section 319 of 

the Fair and Accurate Credit 

Transactions Act of 2003 (‘‘the Act’’ or 

‘‘FACT Act’’). The Commission’s Bureau 

of Economics is holding a roundtable 

with scholars, researchers, and other 

relevant parties on a review of 

methodologies pertinent to testing the 

accuracy and completeness of consumer 

reports.

DATES: The roundtable will take place 

on June 30, 2004.

ADDRESSES: The roundtable will be held 

at the Federal Trade Commission, 601 

New Jersey Avenue, NW., Washington, 

DC 20580.

FOR FURTHER INFORMATION CONTACT:

Persons seeking to attend the roundtable 

should contact Marie Tansioco at (202) 

326–3613 (Federal Trade Commission, 

Bureau of Economics, 601 New Jersey 

Avenue, NW., Washington, DC 20580) 

by June 18, 2004. Please include in your 

request an explanation or statement 

32550 Federal Register / Vol. 69, No. 112 /Thursday, June 10, 2004 / Notices 

1Commission Rule 4.2(d), 16 CFR 4.2(d). The 

comment must be accompanied by an explicit 

request for confidential treatment, including the 

factual and legal basis for the request, and must 

identify the specific portions of the comment to be 

withheld from the public record. The request will 

be granted or denied by the Commission’s General 

Counsel, consistent with applicable law and the 

public interest. See Commission Rule 4.9(c), 16 CFR 

4.9(c).

setting forth expertise in or knowledge 

of methodologies pertinent to assessing 

the accuracy and completeness of 

consumer reports. As a reminder, the 

roundtable will not be dealing with 

policy matters. 

The FTC Act and other laws the 

Commission administers permit the 

collection of information concerning 

persons seeking to attend the roundtable 

to consider and use in this proceeding 

as appropriate. More information, 

including routine uses permitted by the 

Privacy Act to the extent applicable, 

may be found in the FTC’s privacy 

policy, at http://www.ftc.gov/ftc/

privacy.htm.

SUPPLEMENTARY INFORMATION: The FACT 

Act was signed into law on December 4, 

2003. Fair and Accurate Credit 

Transactions Act of 2003, Public Law 

108–159 (2003). In general, the Act 

amends the Fair Credit Reporting Act 

(‘‘FCRA’’) to enhance the accuracy of 

consumer reports and to allow 

consumers to exercise greater control 

regarding the type and amount of 

marketing solicitations they receive. To 

promote increasingly efficient national 

credit markets, the FACT Act also 

establishes uniform national standards 

in key areas of regulation regarding 

consumer report information. The Act 

contains a number of provisions 

intended to combat consumer fraud and 

related crimes, including identity theft, 

and to assist its victims. Finally, the Act 

requires a number of studies to be 

conducted on consumer reporting and 

related issues. 

Section 319 of the Act mandates that 

the Federal Trade Commission shall 

conduct an ongoing study of the 

accuracy and completeness of 

information contained in consumer 

reports prepared or maintained by 

consumer reporting agencies and 

methods for improving the accuracy and 

completeness of such information. The 

time horizon for the mandated study, 

inclusive of a series of biennial reports 

to Congress, runs eleven years. The first 

report is due in early December 2004. 

The roundtable has a limited purpose: 

it is a review of various methodologies 

pertinent to testing the accuracy and 

completeness of consumer reports (also 

known as ‘‘credit reports’’). This review 

is not part of any rule-making procedure 

and does not address any FTC policy 

matter. Also, in reference to the 

language of the Act, the roundtable 

discussion is solely a forum for review 

of methodologies applicable exclusively 

to the accuracy and completeness aspect 

of the section 319 study and will not 

address methods for improving accuracy

and completeness, nor the costs and 

benefits of requirements, or potential 

requirements, pertaining to credit 

reports.

By direction of the Commission. 

Donald S. Clark, 

Secretary.

[FR Doc. 04–13081 Filed 6–9–04; 8:45 am] 

BILLING CODE 6750–01–P

FEDERAL TRADE COMMISSION

[File No. 031–0201]

Itron, Inc., et al.; Analysis To Aid 

Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

SUMMARY: The consent agreement in this 

matter settles alleged violations of 

Federal law prohibiting unfair or 

deceptive acts or practices or unfair 

methods of competition. The attached 

Analysis to Aid Public Comment 

describes both the allegations in the 

draft complaint that accompanies the 

consent agreement and the terms of the 

consent order—embodied in the consent 

agreement—that would settle these 

allegations.

DATES: Comments must be received on 

or before July 2, 2004.

ADDRESSES: Comments should refer to 

‘‘Itron, Inc., et al., File No. 031 0201,’’

to facilitate the organization of 

comments. A comment filed in paper 

form should include this reference both 

in the text and on the envelope, and 

should be mailed or delivered to the 

following address: Federal Trade 

Commission/Office of the Secretary, 

Room H–159, 600 Pennsylvania 

Avenue, NW., Washington, DC 20580. 

Comments containing confidential 

material must be filed in paper form, as 

explained in the SUPPLEMENTARY

INFORMATION section. The FTC is 

requesting that any comment filed in 

paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments filed in 

electronic form (except comments 

containing any confidential material) 

should be sent to the following e-mail 

box: consentagreement@ftc.gov.

FOR FURTHER INFORMATION CONTACT:

Matthew Reilly, FTC, Bureau of 

Competition, 600 Pennsylvania Avenue, 

NW., Washington, DC 20580, (202) 326–

2350.

SUPPLEMENTARY INFORMATION: Pursuant

to section 6(f) of the Federal Trade 

Commission Act, 38 Stat. 721, 15 U.S.C. 

46(f), and section 2.34 of the 

Commission’s Rules of Practice, 16 CFR 

2.34, notice is hereby given that the 

above-captioned consent agreement 

containing a consent order to cease and 

desist, having been filed with and 

accepted, subject to final approval, by 

the Commission, has been placed on the 

public record for a period of thirty (30) 

days. The following Analysis to Aid 

Public Comment describes the terms of 

the consent agreement, and the 

allegations in the complaint. An 

electronic copy of the full text of the 

consent agreement package can be 

obtained from the FTC Home Page (for 

June 3, 2004), on the World Wide Web, 

at http://www.ftc.gov/os/2004/06/

index.htm. A paper copy can be 

obtained from the FTC Public Reference 

Room, Room 130–H, 600 Pennsylvania 

Avenue, NW., Washington, DC 20580, 

either in person or by calling (202) 326–

2222.

Public comments are invited, and may 

be filed with the Commission in either 

paper or electronic form. Written 

comments must be submitted on or 

before July 2, 2004. Comments should 

refer to ‘‘Itron, Inc., et al., File No. 031 

0201,’’ to facilitate the organization of 

comments. A comment filed in paper 

form should include this reference both 

in the text and on the envelope, and 

should be mailed or delivered to the 

following address: Federal Trade 

Commission/Office of the Secretary, 

Room H–159, 600 Pennsylvania 

Avenue, NW., Washington, DC 20580. If 

the comment contains any material for 

which confidential treatment is 

requested, it must be filed in paper 

(rather than electronic) form, and the 

first page of the document must be 

clearly labeled ‘‘Confidential.’’ 1 The

FTC is requesting that any comment 

filed in paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments filed in 

electronic form should be sent to the 

following e-mail box: 

consentagreement@ftc.gov.

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. All timely and responsive 

Federal Trade Commission

Appendix B: Pilot Study Federal Register Notice
Federal Trade Commission
Federal Register / Vol. 69, No. 202 /Wednesday, October 20, 2004 / Notices 61675

1Commission Rule 4.2(d), 16 CFR 4.2(d). The 

comment must be accompanied by an explicit 

request for confidential treatment, including the 

factual and legal basis for the request, and must 

identify the specific portions of the comment to be 

withheld from the public record. The request will 

be granted or denied by the Commission’s General 

Counsel, consistent with applicable law and the 

public interest. See Commission Rule 4.9(c), 16 CFR 

4.9(c).

Bank Holding Company Act (12 U.S.C. 

1843) (BHC Act) and Regulation Y (12 

CFR Part 225) to engage de novo, or to 

acquire or control voting securities or 

assets of a company, including the 

companies listed below, that engages 

either directly or through a subsidiary or 

other company, in a nonbanking activity 

that is listed in § 225.28 of Regulation Y 

(12 CFR 225.28) or that the Board has 

determined by Order to be closely 

related to banking and permissible for 

bank holding companies. Unless 

otherwise noted, these activities will be 

conducted throughout the United States.

Each notice is available for inspection 

at the Federal Reserve Bank indicated. 

The notice also will be available for 

inspection at the offices of the Board of 

Governors. Interested persons may 

express their views in writing on the 

question whether the proposal complies 

with the standards of section 4 of the 

BHC Act. Additional information on all 

bank holding companies may be 

obtained from the National Information 

Center website at www.ffiec.gov/nic/.

Unless otherwise noted, comments 

regarding the applications must be 

received at the Reserve Bank indicated 

or the offices of the Board of Governors 

not later than November 3, 2004.

A. Federal Reserve Bank of Boston

(Richard Walker, Community Affairs 

Officer) 600 Atlantic Avenue, Boston, 

Massachusetts 02106–2204:

1. Boston Private Financial Holdings, 

Inc., Boston, Massachusetts; to acquire 

KLS Professional Advisors, LLC, New 

York, New York, and thereby engage in 

financial and investment advisory 

activities, pursuant to sections 

225.28(b)(6) and (b)(6)(vi) of Regulation 

Y.

B. Federal Reserve Bank of Cleveland

(Cindy C. West, Banking Supervisor) 

1455 East Sixth Street, Cleveland, Ohio 

44101–2566:

1. Wesbanco, Inc., Wheeling, West 

Virginia; to acquire Winton Financial 

Corporation, Cincinnati, Ohio, and 

thereby indirectly acquire The Winton 

Savings and Loan Company, Cincinnati, 

Ohio, and thereby engage in owning and 

operating a savings and loan 

association, pursuant to section 

225.28(b)(4)(ii) of Regulation Y.

Comments regarding this application 

must be received at the Reserve Bank or 

the office of the Board of Governors not 

later than November 15, 2004.

Board of Governors of the Federal Reserve 

System, October 14, 2004.

Robert deV. Frierson,

Deputy Secretary of the Board.

[FR Doc. 04–23421 Filed 10–19–04; 8:45 am]

BILLING CODE 6210–01–S

FEDERAL RESERVE SYSTEM

Sunshine Act Meeting

AGENCY HOLDING THE MEETING: Board of 

Governors of the Federal Reserve 

System.

TIME AND DATE: 11:30 a.m., Monday, 

October 25, 2004.

PLACE: Marriner S. Eccles Federal 

Reserve Board Building, 20th and C 

Streets, N.W., Washington, D.C. 20551.

STATUS: Closed.

MATTERS TO BE CONSIDERED:

1. Personnel actions (appointments, 

promotions, assignments, 

reassignments, and salary actions) 

involving individual Federal Reserve 

System employees.

2. Any items carried forward from a 

previously announced meeting.

FOR FURTHER INFORMATION CONTACT:

Michelle A. Smith, Director, Office of 

Board Members; 202–452–2955.

SUPPLEMENTARY INFORMATION: You may 

call 202–452–3206 beginning at 

approximately 5 p.m. two business days 

before the meeting for a recorded 

announcement of bank and bank 

holding company applications 

scheduled for the meeting; or you may 

contact the Board’s Web site at http://

www.federalreserve.gov for an electronic 

announcement that not only lists 

applications, but also indicates 

procedural and other information about 

the meeting.

Board of Governors of the Federal Reserve 

System, October 15, 2004.

Robert deV. Frierson,

Deputy Secretary of the Board.

[FR Doc. 04–23544 Filed 10–15–04; 4:43 pm]

BILLING CODE 6210–01–S

FEDERAL TRADE COMMISSION

Notice of a Pilot Study to Aid Federal 

Trade Commission Staff in Conducting 

a Study of the Accuracy and 

Completeness of Consumer Reports, 

Pursuant to Section 319 of the Fair and 

Accurate Credit Transactions Act of 

2003

AGENCY: Federal Trade Commission.

ACTION: Notice of pilot study and 

request for comment. 

SUMMARY: Pursuant to section 319 of the 

Fair and Accurate Credit Transactions 

Act of 2003 (‘‘the Act’’ or ‘‘FACT Act’’),

the Federal Trade Commission (the 

‘‘Commission’’ or ‘‘FTC’’) is evaluating 

ways to study the accuracy and 

completeness of consumer reports. The 

purpose of the current pilot study is to 

evaluate the feasibility of a methodology 

that involves direct review by 

consumers of the information reported 

in their consumer reports. Due to the 

small size of the study group, statistical 

conclusions will not be drawn from this 

pilot study. Comments will be 

considered before the FTC submits a 

request for Office of Management and 

Budget (‘‘OMB’’) review under the 

Paperwork Reduction Act.

DATES: Public comments must be 

received on or before December 20, 

2004.

ADDRESSES: Interested parties are 

invited to submit written comments. 

Comments should refer to the 

‘‘Accuracy Pilot Study: Paperwork 

Comment’’ to facilitate the organization 

of the comments. A comment filed in 

paper form should include this 

reference both in the text and on the 

envelope, and should be mailed or 

delivered to the following address: 

Federal Trade Commission/Office of the 

Secretary, Room H–159 (Annex Y), 600 

Pennsylvania Avenue, NW., 

Washington, DC 20580. Comments 

containing confidential material must be 

filed in paper (rather than electronic) 

form, and the first page of the document 

must be clearly labeled ‘‘Confidential.’’ 1

The FTC is requesting that any comment 

filed in paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments filed in 

electronic form (except comments 

containing any confidential material) 

should be sent to the following e-mail 

box: AccuracyPilotStudy@ftc.gov.

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. All timely and responsive 

public comments, whether filed in 

paper or electronic form, will be 

considered by the Commission, and will 

be available to the public on the FTC 

Web site, to the extent practicable, at 

http://www.ftc.gov. As a matter of 

discretion, the FTC makes every effort to 

remove home contact information for 

individuals from public comments it 

receives before placing those comments 

on the FTC Web site. More information, 

including routine uses permitted by the 

61676 Federal Register / Vol. 69, No. 202 /Wednesday, October 20, 2004 / Notices 

2A credit score is a numerical summary of the 

information in a credit report and is designed to be 

predictive of the risk of default. Credit scores are 

created by proprietary formulas that render the 

following general result: the higher the credit score, 

the lower the risk of default. The designated 

contractor for the pilot study plans to use the 

‘‘FICO’’ credit score, which is a commonly used 

score in credit reporting that is developed by the 

Fair Isaac Corporation.

3Participants will use the Web site http://

www.myfico.com to request credit reports. For 

participants who do not have Internet access, the 

contractor will provide it.

Privacy Act, may be found in the FTC’s

privacy policy, at http://www.ftc.gov/

ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT:

Peter Vander Nat, Economist, (202) 326–

3518, Federal Trade Commission, 

Bureau of Economics, 601 New Jersey 

Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: The Fair 

and Accurate Credit Transactions Act of 

2003, Pub. L. 108–159 (2003), among 

other purposes, amends the Fair Credit 

Reporting Act (‘‘FCRA’’) to enhance the 

accuracy of consumer reports. The 

FACT Act requires the FTC to conduct 

a number of studies on consumer 

reporting and related issues. 

Section 319 of the FACT Act requires 

the FTC to study the accuracy and 

completeness of information in 

consumers’ credit reports and to

consider methods for improving the 

accuracy and completeness of such 

information. The Act requires the 

Commission to issue a series of biennial 

reports to Congress over a period of 

eleven years. The first report is due in 

December 2004. 

As the first step in conducting the 

accuracy and completeness study, the 

FTC is conducting a pilot study which 

will evaluate the feasibility of a 

methodology that directly involves 

consumer review of the information 

contained in their credit reports. The 

pilot study does not rely on the 

selection of a nationally representative 

sample of consumers, and statistical 

conclusions will not be drawn from the 

pilot study. The FTC has designated a 

contractor with high-level expertise in 

credit reporting and related issues, 

subject to OMB clearance for the study 

under the Paperwork Reduction Act. 

The pilot study will involve a small 

group of consumers who give the 

contractor permission to review their 

credit reports. The contractor will help 

the consumers to understand their 

reports and to discern inaccuracies or 

incompleteness in them.

The FTC invites comments on: (1) 

Whether the proposed collection of 

information is necessary for the proper 

performance of the functions of the 

agency, which includes the duties 

provided by the FACT Act, and whether 

the information will have practical 

utility; (2) the accuracy of the agency’s

estimate of the burden of the proposed 

collection of information, including the 

validity of the methodology and 

assumptions used; (3) ways to enhance 

the quality, utility, and clarity of the 

information to be collected; and (4) 

ways to minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology, 

e.g., permitting electronic submission of 

responses. The FTC will submit the 

proposed information collection 

requirements to OMB for review, as 

required by the Paperwork Reduction 

Act, 44 U.S.C. 3501–3520.

Description of the Collection of 

Information and Proposed Use: 

The design elements of the study are 

the following: 

1. The study will consist of 

approximately 35 consumers having a 

diversity of credit scores covering at 

least three broad categories: poor, fair, 

and good.2 The study group will consist 

of adult members of households to 

whom credit has been extended in the 

form of credit cards, automobile loans, 

home mortgages, or other forms of 

installment credit. The study group will 

be constructed by using list-assisted 

random digit telephone numbers with 

associated addresses. The FTC will send 

an official letter from the FTC regarding 

the nature and purpose of the pilot 

study to potential study participants. 

The study contractor then will screen 

consumers through telephone 

interviews. As various consumers give 

consent to participate (and thereby give 

the contractor permission to know their 

credit scores), if the respective 

categories of credit scores have an 

unequal distribution of consumers, then 

an array will be chosen to favor 

consumers with the relatively lower 

credit scores.

2. The contractor will help the 

participants obtain their credit reports 

from the three national repositories 

(‘‘credit bureaus’’): Equifax, Experian, 

and Trans Union.3 Each study 

participant will request his or her three 

credit reports on the same day; although 

different participants will generally 

request their reports on different days.

3. The contractor will help the 

participants review their credit reports 

by (a) resolving common 

misunderstandings that they may have 

about the information in their reports 

(this will involve educating the 

participant wherever appropriate), (b) 

helping to identify errors or potential 

errors, and (c) helping to locate any 

material differences or discrepancies 

among their three reports, and checking 

whether these differences indicate 

inaccuracies.

4. The contractor will facilitate a 

participant’s contact with the credit 

bureaus and with the furnishers of 

information to help resolve items on the 

credit report the participant views as 

inaccurate. After the completion of the 

review, the contractor will determine 

whether the credit report information 

has changed, and whether any such 

change on the credit report led to a 

change in the participant’s credit score.

5. To the extent necessary, the 

contractor will guide participants 

through the FCRA dispute process (by 

law, this process is limited to 30 days, 

but may be extended to 45 days if the 

consumer submits relevant information 

during the 30-day period). Specifically, 

participants who have issues that could 

not be resolved informally will use the 

dispute process provided by the FCRA. 

At the conclusion of this process, the 

contractor will ascertain whether the 

credit report information has changed, 

and whether any such change led to a 

change in the credit score. 

The most important information to be 

obtained from the study is an 

assessment of the degree of difficulty 

with which each of the above tasks was 

performed by the participants, including 

the average amount of time needed for 

the respective tasks. The contractor also 

will provide an opinion on the 

feasibility of a national survey of credit 

reports using a methodology similar to 

that of the pilot study. 

Estimated Hours of Burden 

Consumer participation involves the 

initial screening and any subsequent 

time spent to understand, to review, and 

if deemed necessary, to dispute 

information in credit reports. The FTC 

staff estimates that up to 225 consumers 

may need to be screened through 

telephone interviews and that each 

screening interview may last up to 10 

minutes, resulting in approximately 38 

hours (225 contacts × (1/6) hour per 

contact).

With respect to the hours spent by 

study participants, in some cases, the 

relative simplicity of a credit report may 

render little need for review, and the 

consumer’s participation may only be 

an hour. For reports that involve 

difficulties, it may require a number of 

hours for the participant to be educated 

about the report and to resolve any 

disputed items. For items that are 

Federal Register / Vol. 69, No. 202 /Wednesday, October 20, 2004 / Notices 61677

4From testimony before Congress by the 

Consumer Date Industry Association (see Statement

of Stuart K. Pratt, CDIA, Before the Committee on 

Banking, Housing and Urban Affairs of the United 

States Senate, July 9, 2003), there were 

approximately 16 million consumer-requested 

credit reports across the three major credit bureaus 

for year 2003. Roughly 50% of these reports did not 

lead to any further response from the consumer 

(such as a call to, or dispute with, the credit 

bureaus). Regarding the remaining reports, about 

half of these (i.e., about 4 million reports) involved 

questions or clarifications; the other half (roughly 

another 4 million reports) involved some type of 

dispute. These data, although approximate, can be 

used to help create an estimate of the average time 

spent by participants in reviewing their credit 

reports.

The following estimates are for the purpose of 

calculating burden under the Paperwork Reduction 

Act. The estimates are conservative and likely 

overestimate the amount of time that will be spent 

by study participants. For reports that do not 

require the participants to pose any questions to a 

credit bureau about their report (estimated to be 

50% of reports), staff estimates the participants’s

time spent to be an hour or less. For reports that 

involve questions to a credit bureau but not a 

formal dispute (estimated to be 25% of reports), 

staff estimates the participant’s time spent to be 2 

to 3 hours. For reports that involve a formal dispute 

(estimated here to be 25% of consumer-requested 

reports), there may be significant differences for 

time spent by the participants, and this variation is 

itself one element to be discerned by the pilot 

study. Staff believes that, as a preliminary estimate, 

a formal dispute would not involve more than 15 

hours of the participant’s time, particularly in light 

of the fact that the participants will have expert 

assistance available to them, including guidance 

through the FCRA dispute process. Overall, the staff 

has calculated the average time per participant by 

using the weighted average over the three categories 

of reports: (.50 × 1 hour) + (.25 × 3 hours) + (.25 

× 15 hours) = 5 hours.

disputed formally, the participant must 

submit a dispute form, identify the 

nature of the problem, present 

verification from the participant’s own 

records to the extent possible, and, upon 

furnisher response, perhaps submit 

follow-up information. All participants 

will have expert assistance available to 

them, and staff estimates that, on 

average, approximately 5 hours would 

be spent per participant, resulting in a 

total of 175 hours (5 hours × 35

participants).4 Total burden hours are 

thus in a neighborhood of 200 hours (up 

to 38 hours for screening plus 

approximately 175 hours for study 

participants, then rounded to the 

nearest 50 hours).

Estimated Cost Burden 

Participation by the consumer is 

voluntary. All participants will benefit 

by receiving assistance from the 

contractor in reviewing their credit 

reports, and identifying and resolving 

any errors. No monetary costs are 

involved for the consumer; specifically, 

participants will not pay for their credit 

reports.

John D. Graubert, 

Acting General Counsel.

[FR Doc. 04–23453 Filed 10–19–04; 8:45 am] 

BILLING CODE 4750–01–P

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

National Committee on Vital and Health 

Statistics: Meeting 

Pursuant to the Federal Advisory 

Committee Act, the Department of 

Health and Human Services (HHS) 

announces the following advisory 

committee meeting.

Name: National Committee on Vital and 

Health Statistics (NCVHS). 

Time and Date: November 4, 2004, 9 a.m.–

3 p.m., November 5, 2004, 10 a.m.–3:15 p.m. 

Place: Hubert H. Humphrey Building, 200 

Independence Avenue, SW., Eisenberg 

Room—Room 800, Washington, DC 20201. 

Status: Open.

Purpose: At this meeting the Committee 

will hear presentations and hold discussions 

on several health data policy topics. On the 

morning of the first day the Committee will 

hear updates and status reports from the 

Department on topics including Clinical Data 

Standards, the Consolidated Health 

Informatics Initiative, and the HIPAA Privacy 

Rule. There will also be updates on activities 

of the National Center for Health Statistic’s

(NCHS) Board of Scientific Counselors and 

on the National Health Information 

Infrastructure (NHII). In the afternoon the 

Committee will hear a presentation on the 

Census Bureau’s American Community 

Survey and will discuss various materials 

prepared by NCVHS Subcommittees. 

On the second day the Committee will be 

briefed on the National Institutes of Health’s

(NIH) Roadmap for the Future plan and the 

Clinical Trial Research Agenda. The 

Committee will also discuss plans for its 

annual report to Congress and there will be 

reports from the Subcommittees and a 

discussion of agendas for future Committee 

meetings.

The times shown above are for the full 

Committee meeting. Subcommittee breakout 

sessions are scheduled for late in the 

afternoon of the first day and in the morning 

prior to the full Committee meeting on the 

second day. Agendas for these breakout 

sessions will be posted on the NCVHS Web 

site (URL below) when available. 

For Further Information Contact:

Substantive program information as well as 

summaries of meetings and a roster of 

committee members may be obtained from 

Marjorie S. Greenberg, Executive Secretary, 

NCVHS, National Center for Health Statistics, 

Centers for Disease Control and Prevention, 

3311 Toledo Road, Room 2402, Hyattsville, 

Maryland 20782, telephone (301) 458–4245.

Information also is available on the NCVHS 

home page of the HHS Web site: http://

www.ncvhs.hhs.gov/, where further 

information including an agenda will be 

posted when available. 

Should you require reasonable 

accommodation, please contact the CDC 

Office of Equal Employment Opportunity on 

(301) 458–4EEO (4336) as soon as possible.

Dated: October 12, 2004. 

James Scanlon, 

Acting Deputy Assistant Secretary for Science 

and Data Policy, Office of the Assistant 

Secretary for Planning and Evaluation.

[FR Doc. 04–23412 Filed 10–19–04; 8:45 am] 

BILLING CODE 4151–05–M

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

National Committee on Vital and Health 

Statistics: Meeting 

Pursuant to the Federal Advisory 

Committee Act, the Department of 

Health and Human Services (HHS) 

announces the following advisory 

committee meeting.

Name: National Committee on Vital and 

Health Statistics (NCVHS), Workgroup on the 

National Health Information Infrastructure 

(NHII).

Time and Date: November 12, 2004, 9 

a.m.–5 p.m. 

Place: Hubert H. Humphrey Building, 200 

Independence Avenue, SW., Room 705A, 

Washington, DC 20201. 

Status: Open.

Purpose: The Workgroup will hold the first 

in a series of hearings to gather information 

about personal health records, including key 

issues and current approaches. Subsequent 

hearings will be scheduled early in 2005. 

For Further Information Contact:

Substantive program information as well as 

summaries of meetings and a roster of 

committee members may be obtained from 

Mary Jo Deering Ph.D., Lead Staff Person for 

the NCVHS Workgroup on the National 

Health Information Infrastructure, NCI Center 

for Strategic Dissemination and NCI Center 

for Bioinformatics, National Cancer Institute, 

National Institutes of Health, 6116 Executive 

Boulevard—Room 4087, Rockville, MD 

20852, telephone (301) 594–8193, or Marjorie 

S. Greenberg, Executive Secretary, NCVHS, 

National Center for Health Statistics, Centers 

for Disease Control and Prevention, 3311 

Toledo Road, Room 2402, Hyattsville, 

Maryland 20782, telephone (301) 458–4245.

Information also is available on the NCVHS 

home page of the HHS Web site: http://

www.ncvhs.gov/, where an agenda for the 

meeting will be posted when available. 

Should you require reasonable 

accommodation, please contact the CDC 

Office of Equal Employment Opportunity on 

(301) 458–4EEO (4336) as soon as possible.

Dated: October 12, 2004. 

James Scanlon, 

Acting Deputy Assistant Secretary for Science 

and Data Policy, Office of the Assistant 

Secretary for Planning and Evaluation.

[FR Doc. 04–23413 Filed 10–19–04; 8:45 am] 

BILLING CODE 4151–04–M

Federal Trade Commission
Federal Trade Commission

Appendix C: “Same Report” Federal Register Notice
Federal Trade Commission
Federal Register / Vol. 69, No. 114 /Tuesday, June 15, 2004 / Notices 33387

The proposed order’s specific 

provisions are as follows: 

Paragraph II.A prohibits respondents 

from entering into or facilitating any 

agreement between or among any 

physicians: (1) To negotiate with payors 

on any physician’s behalf; (2) to deal, 

not to deal, or threaten not to deal with 

payors; (3) on what terms to deal with 

any payor; or (4) not to deal 

individually with any payor, or to deal 

with any payor only through an 

arrangement involving the respondents. 

Other parts of Paragraph II reinforce 

these general prohibitions. Paragraph 

II.B prohibits the respondents from 

facilitating exchanges of information 

between physicians concerning 

whether, or on what terms, to contract 

with a payor. Paragraph II.C bars 

attempts to engage in any action 

prohibited by Paragraph II.A or II.B, and 

Paragraph II.D proscribes inducing 

anyone to engage in any action 

prohibited by Paragraphs II.A through 

II.C.

As in other Commission orders 

addressing providers’ collective 

bargaining with health care purchasers, 

certain kinds of agreements are 

excluded from the general bar on joint 

negotiations. First, respondents would 

not be precluded from engaging in 

conduct that is reasonably necessary to 

form or participate in legitimate joint 

contracting arrangements among 

competing physicians, whether a 

‘‘qualified risk-sharing joint 

arrangement’’ or a ‘‘qualified clinicallyintegrated joint arrangement.’’ The 

arrangement, however, must not 

facilitate the refusal of, or restrict, 

physicians from contracting with payors 

outside of the arrangement. 

As defined in the proposed order, a 

‘‘qualified risk-sharing joint 

arrangement’’ possesses two key 

characteristics. First, all physician 

participants must share substantial 

financial risk through the arrangement, 

such that the arrangement creates 

incentives for the physician participants 

jointly to control costs and improve 

quality by managing the provision of 

services. Second, any agreement 

concerning reimbursement or other 

terms or conditions of dealing must be 

reasonably necessary to obtain 

significant efficiencies through the joint 

arrangement.

A ‘‘qualified clinically-integrated joint 

arrangement,’’ on the other hand, need

not involve any sharing of financial risk. 

Instead, as defined in the proposed 

order, physician participants must 

participate in active and ongoing 

programs to evaluate and modify their 

clinical practice patterns in order to 

control costs and ensure the quality of 

services provided, and the arrangement 

must create a high degree of 

interdependence and cooperation 

among physicians. As with qualified 

risk-sharing arrangements, any 

agreement concerning price or other 

terms of dealing must be reasonably 

necessary to achieve the efficiency goals 

of the joint arrangement. 

Also, because the order is intended to 

reach agreements among horizontal 

competitors, Paragraph II would not bar 

agreements that only involve physicians 

who are part of the same medical group 

practice (defined in Paragraph I.E). 

Paragraph III, for a period of three 

years, bars Ms. Gomez and Ms. Ray from 

negotiating with any payor on behalf of 

SENM or any SENM member, and from 

advising any SENM member to accept or 

reject any term, condition, or 

requirement of dealing with any payor. 

This temporary ‘‘fencing-in’’ relief is 

included to ensure that the alleged 

unlawful conduct by these respondents 

does not continue. 

Paragraph IV, for three years, requires 

respondents to notify the Commission 

before entering into any arrangement to 

act as a messenger, or as an agent on 

behalf of any physicians, with payors 

regarding contracts. Paragraph IV sets 

out the information necessary to make 

the notification complete. 

Paragraph V, which applies only to 

SENM, requires SENM to distribute the 

complaint and order to all physicians 

who have participated in SENM, and to 

payors that negotiated contracts with 

SENM or indicated an interest in 

contracting with SENM. Paragraph V.B 

requires SENM, at any payor’s request 

and without penalty, or within one year 

after the Order is made final, to 

terminate its current contracts with 

respect to providing physician services. 

Paragraph V.C requires SENM to 

distribute payor requests for contract 

termination to all physicians who 

participate in SENM. Paragraph V.D.1.b 

requires SENM to distribute the 

complaint and order to any payors that 

negotiate contracts with SENM in the 

next three years. 

In the event that SENM fails to 

comply with the requirements of 

Paragraph V.A or Paragraph V.D.1.b, 

Paragraph VI would require Ms. Ray to 

do so. 

Paragraphs VII and VIII generally 

require Ms. Gomez and Ms. Ray to 

distribute the complaint and order to 

physicians who have participated in any 

group that has been represented by Ms. 

Gomez or Ms. Ray since August 1, 2001, 

and to each payor with which Ms. 

Gomez or Ms. Ray has dealt since 

August 1, 2001, for the purpose of 

contracting.

Paragraphs V.E, V.F, VIII.B, IX, and X 

of the proposed order impose various 

obligations on respondents to report or 

provide access to information to the 

Commission to facilitate monitoring 

respondents’ compliance with the order.

The proposed order will expire in 20 

years.

By direction of the Commission. 

Donald S. Clark, 

Secretary.

[FR Doc. 04–13483 Filed 6–14–04; 8:45 am] 

BILLING CODE 6750–01–P

FEDERAL TRADE COMMISSION

Public Comment To Aid Staff in 

Preparing the FACT Act Section 

318(a)(2)(C) Study

AGENCY: Federal Trade Commission.

ACTION: Notice and request for public 

comment.

SUMMARY: The Federal Trade 

Commission (the ‘‘Commission’’ or 

‘‘FTC’’) is conducting a study of the 

effects of requiring that a consumer who 

has experienced an adverse action based 

on a credit report receives a copy of the 

same credit report that the creditor 

relied on in taking the adverse action, as 

required by the Fair and Accurate Credit 

Transactions Act of 2003 (FACT Act or 

the Act). The Commission is requesting 

public comment on a number of issues 

to assist in preparation of the study.

DATES: Public comments must be 

received on or before July 16, 2004.

ADDRESSES: Interested parties are 

invited to submit written comments. 

Comments should refer to ‘‘FACT Act 

section 318(a)(2)(C) Study, Matter No. 

P044804’’ to facilitate the organization 

of comments. A comment filed in paper 

form should include this reference both 

in the text and on the envelope, and 

should be mailed or delivered to the 

following address: Federal Trade 

Commission/Office of the Secretary, 

Room H–159 (Annex M), 600 

Pennsylvania Avenue, NW., 

Washington, DC 20580. Comments 

containing confidential material must be 

filed in paper form, as explained in the 

SUPPLEMENTARY INFORMATION section.

The FTC is requesting that any comment 

filed in paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments filed in 

electronic form (except comments 

containing any confidential material) 

should be sent to the following e-mail 

box: FACTAStudy@ftc.gov.

33388 Federal Register / Vol. 69, No. 114 /Tuesday, June 15, 2004 / Notices 

1The exceptions have to do with interstate 

truckers [section 604 (b) (3) (C) of the FCRA, 15 

U.S.C. 1681b(b)(3)(C)] and investigations of 

workplace misconduct [section 603(x) of the FCRA, 

15 U.S.C. 1681a(x)].

2Section 318 (b) notes that ‘‘Not later than 1 year 

after the date of enactment of this Act, the 

Chairman of the Commission shall submit a report 

to the Committee on Banking, Housing, and Urban 

Affairs of the Senate and the Committee on 

Financial Services of the House of Representatives 

containing a detailed summary of the findings and 

conclusions of the study under this section, 

together with such recommendations for legislative 

or administrative actions as may be appropriate.’’

3FCRA section 604(a)(3); 15 U.S.C. 1681b(a)(3).

4FCRA section 604(a)(3)(F); 15 U.S.C. 

1681b(a)(3)(F).

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. All timely and responsive 

public comments, whether filed in 

paper or electronic form, will be 

considered by the Commission, and will 

be available to the public on the FTC 

Web site, to the extent practicable, at 

www.ftc.gov. As a matter of discretion, 

the FTC makes every effort to remove 

home contact information for 

individuals from public comments it 

receives before placing those comments 

on the FTC Web site. More information, 

including routine uses permitted by the 

Privacy Act, may be found in the FTC’s

privacy policy, at http://www.ftc.gov/

ftc/privacy.htm.

FOR FURTHER INFORMATION CONTACT:

Carolyn Cox, Economist, (202) 326–

3434, Federal Trade Commission, 

Bureau of Economics, 601 New Jersey 

Avenue, NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION:

I. Background 

A. Current Requirements Under the Fair 

Credit Reporting Act 

Section 615 of the Fair Credit 

Reporting Act currently requires parties 

who take an adverse action on the basis 

of information contained in a consumer 

report to provide consumers with an 

adverse action notice that, among other 

things, contains the name, address, and 

telephone number of the consumer 

reporting agency that furnished the 

report, that notifies the consumer of his 

or her right to receive a free copy of a 

consumer report from the consumer 

reporting agency, and explains his or 

her right to dispute with the consumer 

reporting agency the accuracy or 

completeness of any information in that 

report. Section 615 provides no time 

limit within which the notice must be 

supplied. As a practical matter, 

however, most creditors who are 

required to supply an adverse action 

notice by the Equal Credit Opportunity 

Act [section 202.9 of Regulation B, 12 

CFR 202.9] , which requires notification 

within 30 days [section 202.9(a)(1) of 

Regulation B, 12 CFR 202.9(a)(1)], 

combine the FCRA and ECOA notices.

A consumer who requests a copy of 

his or her credit report subsequent to 

receiving an adverse action notice may 

receive a credit report that looks 

different than the one that the creditor 

relied on in making its decision. For 

example, the report that the consumer 

receives may contain more up-to-date 

information or be in a more consumerfriendly format. In addition, if the 

creditor and the consumer each 

provided different identifying 

information to request a copy of the 

report, then the reports received by the 

two parties may differ. This difference 

could, for example, be due to errors in 

transcription by clerks or differences in 

the amount of the identifying 

information provided. In some 

instances, the creditor may even receive 

multiple reports from a single consumer 

reporting agency on an individual 

consumer, while the consumer only 

receives one report. Thus, the report 

that the consumer receives and the 

report that the creditor receives and 

relies on may differ. 

In contrast, a consumer who 

experiences an adverse action regarding 

employment obtains a copy of the same 

consumer report that the party taking 

the adverse action relied on. Section 604 

(b) (3) (A) of the FCRA notes that, except 

under certain circumstances, ‘‘in using 

a consumer report for employment 

purposes, before taking any adverse 

action based in whole or in part on the 

report, the person intending to take such 

adverse action shall provide to the 

consumer to whom the report relates—

(i) a copy of the report; and (ii) a 

description in writing of the rights of 

the consumer under this subchapter, as 

prescribed by the Federal Trade 

Commission, under section 609 (c)(1) 

[section 1681g(c)(1) of this title].’’ 1

B. Study Required by the FACT Act 

The FACT Act was signed into law on 

December 4, 2003. Pub. L. 108–159, 117 

Stat. 1952. Section 318 (a) (2) (C) of the 

Act requires the FTC to examine ‘‘the

effects of requiring that a consumer who 

has experienced an adverse action based 

on a credit report receives a copy of the 

same credit report that the creditor 

relied on in taking the adverse action, 

including—(i) the extent to which 

providing such reports to consumers 

would increase the ability of consumers 

to identify errors in their credit reports; 

and (ii) the extent to which providing 

such reports to consumers would 

increase the ability of consumers to 

remove fraudulent information from 

their credit reports.’’ Section 318 (a) (3) 

specifies that the Commission ‘‘shall

consider the extent to which such 

requirements would benefit consumers, 

balanced against the cost of 

implementing such provisions.’’ 2

We believe it is significant that the 

Act requires the FTC to study only the 

effects of a consumer receiving a copy 

of the ‘‘same credit report that the 

creditor relied on’’ following an adverse

action. Although ‘‘credit report’’ is a 

commonly-used non-technical term for 

‘‘consumer report,’’ because the 

provision refers also to ‘‘creditors,’’ we 

interpret the study to encompass only 

the use of consumer reports in credit 

transactions. Of course, consumer 

reports are not only used to determine 

credit eligibility; they may also be used 

for the purposes of reviewing an 

account or making decisions involving 

insurance, employment, or government 

benefits.3 Consumer reporting agencies 

may also provide reports to persons who 

have a ‘‘legitimate business need’’ for 

the information, such as a landlord 

deciding whether to rent an apartment 

to a consumer.4 The scope of the study, 

however, would not include situations 

in which these other users of consumer 

reports rely on a consumer report in 

taking an adverse action.

Although the FACT Act requires the 

FTC to study ‘‘the effects of requiring 

that a consumer * * * receives a copy 

of the same credit report * * * relied 

on’’ following an adverse action, it does 

not specify who would be responsible 

for supplying a copy of the credit report 

or the manner in which it would be 

supplied. In particular, the Act does not 

specify whether the consumer reporting 

agency or the creditor would be 

required to supply the consumer with a 

copy of ‘‘the same credit report’’ or the 

manner by which they should fulfill the 

requirement. For example, a creditor 

could send a copy of the credit report 

or a notification of the consumer’s right 

to receive a credit report from them, 

along with each adverse action notice. 

Alternatively, a consumer reporting 

agency could comply with a 

requirement to supply the same report 

relied on by a creditor in taking an 

adverse action to consumers who 

experience an adverse action by sending 

a copy of the report to consumers 

(regardless of whether they will 

experience an adverse action) at the 

same time that they send a copy to the 

creditor, or by responding to requests of 

consumers who experience an adverse 

action related to credit and request a 

copy of their report. 

Federal Register / Vol. 69, No. 114 /Tuesday, June 15, 2004 / Notices 33389

5The term ‘‘in file’’ credit report refers to a set 

of information that a party (e.g., creditor or reseller) 

receives from a credit reporting agency in response 

to a request for information about an individual.

The Act also does not define ‘‘the

same credit report that the creditor 

relied on,’’ and it is not clear in all 

situations what the term means. For 

example, in the case of a creditor who 

uses a credit score to evaluate a 

consumer’s creditworthiness, the 

‘‘same’’ report could consist of only the 

score itself or it could also include all 

of the information that was used to 

derive the score. Likewise, if a creditor 

received multiple scores concerning an 

individual, the ‘‘same’’ report could 

mean only the score or scores that the 

creditor chose to use or all of the scores 

the creditor received. In addition to 

issues regarding the content of the 

report, providing the ‘‘same’’ report to 

consumers as to creditors also raises 

issues concerning the format of the 

report. If the report that the creditor 

relies on is received in an electronic file 

that can only be understood using 

queries made through a specialized 

software package, would the ‘‘same’’

report consist of the unintelligible 

electronic files, or might it consist of a 

reporting of the information contained 

in the files in some new, more consumer 

friendly format? The costs and benefits 

associated with providing the consumer 

a copy of ‘‘the same report’’ depend on 

what one means by the term ‘‘the same 

report.’’

II. Request for Public Comments 

The Commission is seeking comment 

on all aspects of the proposed 

requirement that a consumer who has 

experienced an adverse action based on 

a credit report receives a copy of the 

same credit report that the creditor 

relied on in taking the adverse action. 

The Commission specifically requests 

comment on the questions noted below, 

but these questions are intended to 

assist the public and should not be 

construed as a limitation on the issues 

on which public comment may be 

submitted. Responses to these questions 

should cite the numbers and subsection 

of the questions being answered. For all 

comments submitted, please submit any 

relevant data, statistics, or any other 

evidence upon which those comments 

are based. 

The Commission requests that, as a 

threshold matter, parties explain how 

they define ‘‘the same report that the 

creditor relied on.’’ In addition, in 

answering the questions please use both 

the most restrictive and the most 

expansive definition possible and feel 

free to comment on how your answer 

would change if an alternative 

definition were used. For example, in 

instances where a creditor used a credit 

score, under the most restrictive 

definition, the ‘‘same report’’ would 

consist of only the score, while under 

the most expansive definition, the 

‘‘same report’’ would include the score

and the underlying data in a consumerfriendly format. Thus, in instances 

where a creditor used a credit score, the 

Commission seeks comment on the 

benefits and costs under these two 

scenarios, but welcomes comment on 

additional scenarios that might arise if 

an alternative definition were used. 

The Commission notes that the term 

‘‘adverse action’’ has a specific 

definition under the FCRA. In 

particular, in terms of credit, the term 

adverse action ‘‘has the same meaning 

as in section 701(d)(6) of the Equal 

Credit Opportunity Act [Section 

1691(d)(6)] of this title * * *.’’ Thus, 

the term adverse action means ‘‘(i) a 

refusal to grant credit in substantially 

the amount or on substantially the terms 

requested in an application unless the 

creditor makes a counteroffer (to grant 

credit in a different amount or on other 

terms) and the applicant uses or 

expressly accepts the credit offered; (ii) 

a termination of an account or an 

unfavorable change in the terms of an 

account that does not affect all or 

substantially all of a class of the 

creditor’s accounts; or (iii) a refusal to 

increase the amount of credit available 

to an applicant who has made an 

application for an increase.’’ Therefore, 

situations that trigger a risk-based 

pricing notice would not be considered 

an ‘‘adverse action’’ for the purposes of

this study. The Commission requests 

that comments use ‘‘adverse action’’ as 

it is defined under the FCRA, but 

welcomes parties to opine on how a 

more expansive definition of the term 

‘‘adverse action’’ (e.g., one that included 

situations that trigger a risk-based 

pricing notice) would impact specific 

scenarios.

A. Extent to Which the Proposed 

Requirement Would Benefit Consumers 

1. How does the credit report received 

by the creditor currently differ from the 

information that consumers receive 

from a consumer reporting agency when 

they request a copy of their credit report 

in response to an adverse action notice? 

a. What are the different types of 

consumer reports that are used by a 

creditor (e.g., credit score, ‘‘in file’’

credit report,5 merged credit report)? To 

what extent are credit scores, as 

opposed to ‘‘in file’’ or merged credit 

reports, relied on by creditors in making 

decisions regarding the extension of 

credit? To what extent do creditors rely 

on two or more types of consumer 

reports (e.g., a credit score, an ‘‘in file’’

credit report, and/or a merged credit 

report) in their decisions on whether to 

extend credit? Does the form in which 

the credit file information is revealed to 

creditors differ significantly among 

creditors? If so, how?

b. How frequently are multiple ‘‘in

files’’ and/or multiple credit scores 

received in response to a request for 

information on a single individual? How 

are multiple ‘‘in files’’ and/or multiple 

credit scores treated by parties in their 

credit granting decisions? 

c. Does the creditor use all of the 

information that it receives in response 

to a request for information on an 

individual, or, in certain situations, 

does it use only a subset of that 

information? For example, if a reseller 

or a creditor receives multiple ‘‘in files’’

does the creditor rely on all of the ‘‘in

files’’ in making its credit granting 

decision, or does it screen the ‘‘in files’’

to determine which files it will rely on 

in making its decision? What are the 

situations in which the creditor relies 

on a subset of the information in its 

credit granting decision? 

d. Are credit scores based on more 

information than that which appears in 

a file that is disclosed to consumers? For 

example, is information used that is 

blocked or suppressed from the 

consumer’s file? 

e. Do consumers ever receive multiple 

file disclosures in response to their 

request to see their credit file? If so, how 

often does this occur? 

f. What factors account for the 

differences in the consumer report that 

is relied on by a creditor versus the 

credit report that is seen by a consumer 

who requests a credit report after 

receiving an adverse action notice? In 

particular, are there differences due to 

(i) differences in the time at which the 

credit report is requested, (ii) 

differences in the format in which a 

credit report is presented to a consumer 

versus a creditor, or (iii) differences in 

the identifying information that is used 

to request a credit report? Are there 

differences due to the matching 

technologies used to respond to requests 

for information by the consumer versus 

the user of a consumer report? If the 

same identifying information was used 

by the creditor and the consumer to 

request a credit file and if the requests 

were placed at the same time, could the 

creditor receive multiple ‘‘in files’’

while the consumer only receives one 

file? Are there differences due to other 

factors? If so, what are these factors and 

why do they result in different credit 

reports being relied on by the creditor 

33390 Federal Register / Vol. 69, No. 114 /Tuesday, June 15, 2004 / Notices 

versus the consumer? Please describe in 

detail the source of any differences.

g. What information do consumer 

reporting agencies require consumers to 

provide to obtain a copy of their credit 

report? What information do consumer 

reporting agencies require creditors to 

provide to obtain information on an 

individual? To the extent that there are 

differences in the credit report seen by 

the creditor versus the consumer due to 

differences in identifying information, 

are these differences due to (i) 

differences in the amount of information 

that is required (e.g., a creditor is not 

required to provide the middle name of 

the individual, but the consumer is 

required to provide a middle name), (ii) 

differences in the completeness of the 

information (e.g., the consumer reports 

his name as John Doe, Jr., but the 

creditor reports only John Doe), (iii) 

typographical errors (e.g., social security 

number or name is typed in incorrectly 

by the creditor), or (iv) something else? 

Please describe in detail the source of 

any differences, as well as the extent to 

which they occur. 

2. What current problems exist when 

the consumer receives a report that is 

different in form or content from the 

report relied on by the creditor? Please 

provide examples of specific situations 

in which consumers would benefit from 

the proposed requirement that a 

consumer who has experienced an 

adverse action based on a credit report 

receives a copy of the same credit report 

that the creditor relied on in taking the 

adverse action. 

a. Do the problems arise primarily 

from differences in the scope of the 

information seen by the creditor versus 

the consumer, differences due to the 

time at which the report is requested, or 

both? For example, are the concerns 

related to situations in which a 

consumer does not know what 

information led to the adverse action 

because the information is already 

corrected by the time the report is 

normally seen by the consumer? Or, is 

it more likely that any problems come 

from a situation where the creditor has 

information in a consumer report or in 

multiple ‘‘in files’’ that actually pertains 

to another individual? 

b. Would the proposed requirement 

increase the ability of consumers to 

identify errors in their credit reports? If 

so, how? 

c. Would the proposed requirement 

aid consumers who seek to have the 

adverse action decision reversed 

because of inaccuracies or incomplete 

information in the credit report relied 

on by the creditor? 

d. Would the proposed requirement 

aid consumers who seek to obtain credit 

from other parties following an adverse 

action?

e. Would the proposed requirement 

increase the ability of consumers to 

identify identity theft and/or remove 

fraudulent information from their credit 

report? If so, how? 

f. Is the proposed requirement, in and 

of itself, sufficient to generate the 

benefits noted above, or are other 

requirements also necessary (e.g., credit 

report must be provided by a certain 

party at a certain time in the credit 

granting decision process) in order for 

the benefits to be generated? If so, what 

additional requirements are necessary? 

g. Would the proposed requirement 

generate benefits other than those noted 

above? If so, what benefits would likely 

be generated? 

3. What information would 

consumers gain if they receive the same 

credit report that the creditor relied on 

in taking the adverse action? 

a. Is there any information that 

appears in the report that the creditor 

relied on that is not currently reported 

to consumers, that, if corrected or 

deleted, would improve the consumer’s

ability to obtain credit? 

b. Is there any information that 

appears in the report that the creditor 

relied on that is not currently reported 

to consumers that would enable the 

consumer to detect if he/she is a victim 

of identity theft, or if he/she continues 

to be a victim of identity theft? 

c. Is there information that appears in 

the report that the creditor relied on that 

is not currently reported to consumers 

that generates benefits other than those 

noted above? If so, what additional 

information generates the benefits and 

what are the benefits? 

4. Are there situations in which the 

consumer already has an opportunity to 

see a copy of the credit report that the 

creditor is relying on prior to the 

creditor taking an adverse action? In 

particular, what is the extent to which 

this situation occurs in the mortgage 

industry?

5. Are there situations in which the 

consumer already receives a copy of the 

credit report that the creditor relied on 

in taking the adverse action, after the 

action is taken? In particular, what is 

the extent to which this situation occurs 

in the mortgage industry?

B. The Cost of Implementing the 

Proposed Requirement 

1. What are the various means by 

which the proposed requirement that a 

consumer who has experienced an 

adverse action based on a credit report 

receives a copy of the same credit report 

that the creditor relied on in taking the 

adverse action could be implemented? 

What would be the costs associated with 

implementing the proposed requirement 

via these various means? Which party 

(creditor versus the consumer reporting 

agency) can provide the same report that 

the creditor relied on in taking the 

adverse action to consumers at least 

cost?

2. Why do consumer reporting 

agencies not currently give consumers a 

copy of the same credit report that the 

creditor relied on in taking the adverse 

action? What would be the costs to 

consumer reporting agencies of 

requiring them to do so? 

a. Is the data base that is maintained 

by a consumer reporting agency kept in 

such a way that the consumer reporting 

agency can easily reconstruct a credit 

report from a prior date? If not, what 

would be the cost associated with 

requiring a change that would enable 

the consumer reporting agency to do 

that?

b. Would a consumer reporting 

agency know what information is drawn 

from a credit file by a creditor and the 

manner in which it is displayed to 

them? If not, how costly would it be for 

the consumer reporting agency to obtain 

this information? 

c. Are there situations in which the 

cost of requiring the consumer reporting 

agency to provide a copy of the same 

credit report that the creditor relied on 

in taking the adverse action to a 

consumer who has experienced an 

adverse action would be minimal and/

or nonexistent? If so, what are these 

situations?

3. Why do creditors not currently give 

consumers a copy of the same credit 

report that the creditor relied on in 

taking the adverse action? What would 

be the costs to creditors of requiring 

them to do so? Does the cost vary 

depending on the credit granting 

situation (e.g., mortgages versus instant 

credit)? Are there situations in which 

the cost of requiring the creditor to 

provide a copy of the same credit report 

that they relied on in taking the adverse 

action to a consumer who has 

experienced an adverse action would be 

minimal and/or nonexistent? If so, what 

are these situations? 

4. What would be the cost to 

consumers associated with obtaining a 

copy of the credit report that the 

creditor relied on in taking the adverse 

action in addition to or in lieu of the 

credit report that the consumer 

currently receives if he or she requests 

one after receiving an adverse action 

notice?

a. Would the proposed requirement 

lead consumers to mistakenly conclude 

that there are inaccuracies in their credit 

reports? Would giving consumers an 

Federal Register / Vol. 69, No. 114 /Tuesday, June 15, 2004 / Notices 33391

6Commission Rule 4.2(d), 16 CFR 4.2(d). The 

comment must be accompanied by an explicit 

request for confidential treatment, including the 

factual and legal basis for the request, and must 

identify the specific portions of the comment to be 

withheld from the public record. The request will 

be granted or denied by the Commission’s General 

Counsel, consistent with applicable law and the 

public interest. See Commission rule 4.9(c), 16 CFR 

4.9(c).

older version lead them to dispute 

inaccuracies that may have already been 

corrected? What sort of costs might 

result from these disputes? 

b. Would the proposed requirement 

make it more difficult for consumers to 

determine if there are inaccuracies in 

their credit report? Are there situations 

where a consumer who views the 

version that the creditor has relied on 

might miss the opportunity to fix 

inaccurate information that appears on 

the report after it was requested by the 

creditor? What sort of costs (e.g., denial 

of future credit) might result from these 

situations?

c. What would be the cost to creditors 

associated with retooling their credit 

granting process to produce consumer 

friendly versions of the consumer report 

that they relied on? 

d. Would the proposed requirement 

make it more difficult for consumers to 

determine if they are, or continue to be, 

a victim of identity theft? If so, why? 

e. Could the proposed requirement 

unintentionally increase identity theft, 

particularly in situations where credit is 

denied because identity theft is 

suspected or in situations in which 

multiple ‘‘in files’’ or scores are received

by the creditor in response to a request 

for information on a single individual? 

f. Could the proposed requirement 

raise privacy concerns in situations in 

which multiple ‘‘in files’’ or scores are 

received by the creditor in response to 

a request for information on a single 

individual?

C. Additional Information 

1. Do the experiences of other 

countries (e.g., Sweden) that have a 

similar, but not identical requirement 

that consumers receive the same report 

as that relied on by the creditor, inform 

our analysis here? 

2. Do the FCRA’s section 604 

requirements regarding adverse action 

in employment, where the consumer 

already receives a copy of the same 

consumer report that the party taking 

the adverse action relied on inform our 

analysis here?

3. What other additional information 

should the Commission consider in 

studying the effects of the proposed 

requirement?

All persons are hereby given notice of 

the opportunity to submit written data, 

views, facts, and arguments addressing 

the issues raised by this Notice. 

Comments must be received on or 

before July 16, 2004. Comments should 

refer to ‘‘FACT Act Section 318(a)(2)(C) 

Study, Matter No. P044804’’ to facilitate 

the organization of comments. A 

comment filed in paper form should 

include this reference both in the text 

and on the envelope, and should be 

mailed or delivered to the following 

address: Federal Trade Commission/

Office of the Secretary, Room H–159

(Annex M), 600 Pennsylvania Avenue, 

NW., Washington, DC 20580. If the 

comment contains any material for 

which confidential treatment is 

requested, it must be filed in paper 

(rather than electronic) form, and the 

first page of the document must be 

clearly labeled ‘‘Confidential.’’ 6 The

FTC is requesting that any comment 

filed in paper form be sent by courier or 

overnight service, if possible, because 

U.S. postal mail in the Washington area 

and at the Commission is subject to 

delay due to heightened security 

precautions. Comments filed in 

electronic form (except comments 

containing any confidential material) 

should be sent to the following e-mail 

box: FACTAStudy@ftc.gov.

The FTC Act and other laws the 

Commission administers permit the 

collection of public comments to 

consider and use in this proceeding as 

appropriate. All timely and responsive 

public comments, whether filed in 

paper or electronic form, will be 

considered by the Commission, and will 

be available to the public on the FTC 

Web site, to the extent practicable, at 

www.ftc.gov. As a matter of discretion, 

the FTC makes every effort to remove 

home contact information for 

individuals from public comments it 

receives before placing those comments 

on the FTC Web site. More information, 

including routine uses permitted by the 

Privacy Act, may be found in the FTC’s

privacy policy, at http://www.ftc.gov/

ftc/privacy.htm.

By direction of the Commission. 

Donald S. Clark, 

Secretary.

[FR Doc. 04–13482 Filed 6–14–04; 8:45 am] 

BILLING CODE 6750–01–P

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Centers for Disease Control and 

Prevention

[60Day–04–62]

Proposed Data Collections Submitted 

for Public Comment and 

Recommendations

In compliance with the requirement 

of section 3506(c)(2)(A) of the 

Paperwork Reduction Act of 1995 for 

opportunity for public comment on 

proposed data collection projects, the 

Centers for Disease Control and 

Prevention (CDC) will publish periodic 

summaries of proposed projects. To 

request more information on the 

proposed projects or to obtain a copy of 

the data collection plans and 

instruments, call the CDC Reports 

Clearance Officer on (404) 498–1210.

Comments are invited on: (a) Whether 

the proposed collection of information 

is necessary for the proper performance 

of the functions of the agency, including 

whether the information shall have 

practical utility; (b) the accuracy of the 

agency’s estimate of the burden of the 

proposed collection of information; (c) 

ways to enhance the quality, utility, and 

clarity of the information to be 

collected; and (d) ways to minimize the 

burden of the collection of information 

on respondents, including through the 

use of automated collection techniques 

or other forms of information 

technology. Send comments to Sandra 

Gambescia, CDC Assistant Reports 

Clearance Officer, 1600 Clifton Road, 

MS–E11, Atlanta, GA 30333 or send an 

e–mail to omb@cdc.gov. Written

comments should be received within 60 

days of this notice. 

Proposed Project 

2005 National Health Interview 

Survey, OMB No. 0920–0214—

Revision—National Center for Health 

Statistics (NCHS), Centers for Disease 

Control and Prevention (CDC). 

The annual National Health Interview 

Survey (NHIS) is a basic source of 

general statistics on the health of the 

U.S. population. Respondents to the 

NHIS also serve as the sampling frame 

for the Medical Expenditure Panel 

Survey which is conducted by the 

Agency for Healthcare Research and 

Quality. The NHIS has long been used 

by government, university, and private 

researchers to evaluate both general 

health and specific issues, such as 

cancer, AIDS, and access to health care. 

Journalists use its data to inform the 

general public. It will continue to be a 

leading source of data for the 

Federal Trade Commission

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