Analysis of Proposed Consent Order To Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to final approval, to a 

proposed consent order from First American Real Estate Solutions, LLC ("FARES"). The 

proposed order would settle charges that First American CREDCO ("CREDCO"), which is now 

a division of FARES, violated the Fair Credit Reporting Act ("FCRA"). The FCRA requires, 

inter alia, that consumer reporting agencies such as CREDCO reinvestigate items that consumers 

dispute on their consumer reports and correct or delete items that are inaccurate.

The proposed consent order has been placed on the public record for sixty (60) days for reception 

of comments by interested persons. Comments received during this period will become part of 

the public record. After sixty (60) days, the Commission will again review the agreement and the 

comments received and will decide whether it should withdraw from the agreement or make final 

the agreement's proposed order.

According to the complaint, one of the consumer report products that CREDCO produces is the 

Instant Merge Report ("IMR"). IMRs contain blended consumer account information from two 

or three of the national consumer reporting agencies ("repositories"), Trans Union, Equifax, and 

Experian. The complaint alleges that, in connection with its IMRs, CREDCO (1) failed to 

reinvestigate disputed information, (2) failed to correct or delete information in consumers' files 

that CREDCO found to be inaccurate or obsolete or whose accuracy can no longer be verified, 

and (3) failed to include in subsequent IMRs a notation that a consumer disputes an item and a 

statement by the consumer setting forth the nature of the dispute or a codification or summary of 

that statement. According to the complaint, these practices violated Section 611 of the FCRA, 15 

U.S.C. § 1681i.

The complaint also alleges that CREDCO failed to follow reasonable procedures to prevent 

information that CREDCO has found to be inaccurate or obsolete, or whose accuracy could not 

be verified, from appearing on subsequent IMRs. According to the complaint, these practices 

violated Section 607(b) of the FCRA, 15 U.S.C. § 1681e(b).

Pursuant to Section 621(a)(1) of the FCRA, 15 U.S.C. § 1681s(a)(1), all violations of the FCRA 

constitute unfair or deceptive acts or practices in commerce in violation of Section 5(a) of the 

Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 45(a). Thus, the complaint also alleges 

that CREDCO violated Section 5(a).

The proposed order contains injunctive provisions designed to remedy the violations charged and 

to prevent respondent FARES from engaging in similar acts and practices in the future. 

Specifically, the order would require that FARES (1) reinvestigate consumer report items that 

consumers dispute and record the current status of the items or delete them; (2) within five 

business days after receiving a consumer dispute, notify the furnisher that the item is disputed; 

(3) "review and consider" all relevant information submitted by consumers in connection with 

their disputes; (4) maintain reasonable procedures designed to prevent the reappearance in a 

consumer's file, and in consumer reports on the consumer, of information that has been deleted; 
and (5) notify a consumer, within five business days after it completes a reinvestigation, (a) that 

the consumer has the right to file a dispute statement, and (b) that the consumer has the right to 

request that FARES provide either a notice that the item has been corrected or deleted, or the 

consumer's dispute statement, to any person specifically designated by the consumer who has 

received a consumer report that contained the deleted or disputed information within two years 

prior to the consumer's request, for employment purposes, or within six months prior to the 

consumer's request, for any other purpose.

The proposed order also would require FARES to permit a consumer to file a dispute statement if 

its reinvestigation does not resolve the consumer's dispute. If the dispute statement is neither 

frivolous nor irrelevant, the proposed order would require FARES to include the statement, or a 

codification or summary of the statement, in all subsequent consumer reports that FARES 

prepares concerning the consumer that contain the disputed item. The proposed order also would 

require FARES, at the request of a consumer, to provide a notification that a disputed item has 

been corrected or deleted, or the consumer's dispute statement or a codification or summary of 

the statement, to any person specifically designated by the consumer who has received a 

consumer report that contained the deleted or disputed information within two years prior to the 

consumer's request, for employment purposes, or within six months prior to the consumer's 

request, for any other purpose.

The proposed order also includes a number of recordkeeping and reporting requirements 

designed to assist the Commission in monitoring FARES's compliance.

Congress amended the FCRA in September 1996; the amendments became effective in 

September 1997. Because the practices of CREDCO that allegedly violated the FCRA occurred 

prior to September 1997, the complaint alleges violations of the pre-amendment FCRA only. The 

proposed order, however, requires FARES to comply with the post-amendment FCRA and any 

future FCRA amendments.

The purpose of this analysis is to facilitate public comment on the proposed order, and it is not 

intended to constitute an official interpretation of the agreement and proposed order or to modify 

in any way its terms.