5022 Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 

1Section 604(e) of the FCRA requires that any 

consumer reporting agency that provides 

prescreened lists to marketers shall maintain a 

notification system through which consumers may 

choose to have their names and addresses excluded 

from such lists. That section also requires that 

consumer reporting agencies that compile and 

maintain files on consumers on a nationwide basis 

establish a joint notification system. The 

nationwide consumer reporting agencies have done 

so, and the current telephone number for the joint 

notification system is 1–888–5–OPT–OUT (1–888–

567–8688).

2The notice of proposed rulemaking and 

proposed Rule were published in the Federal 

Register on October 1, 2004. 69 FR 58861.

3The public comments relating to this 

rulemaking may be viewed at http://www.ftc.gov/

os/comments/prescreenedoptout/index.htm. 

Citations to comments filed in this proceeding are 

made to the name of the organization (if any) or the 

last name of the commenter, and the comment 

number of record.

4These included the Consumer Data Industry 

Association (‘‘CDIA’’) (the trade association that 

represents the nationwide consumer reporting 

agencies and a variety of other consumer reporting 

agencies), America’s Community Bankers, 

American Bankers Association, American Council 

of Life Insurers, American Financial Services 

Association, the Coalition to Implement the FACT 

Act (representing trade associations and companies 

that furnish, use, collect, and disclose consumer 

information), Consumer Bankers Association, Credit 

Union National Association, Florida Association of 

Mortgage Brokers, Independent Community 

Bankers of America, Michigan Credit Union League, 

Mortgage Bankers Association, National Association 

of Federal Credit Unions, National Independent 

Automobile Dealers Association, National Retail 

Federation, Pennsylvania Credit Union Association, 

and Property Casualty Insurers Association of 

America.

5These included financial institutions, such as 

Bank of America Corporation, Countrywide Home 

Loans, MasterCard International Incorporated, 

MBNA America Bank, N.A., Navy Federal Credit 

Union, Union Federal Bank, and Visa U.S.A. Inc.; 

FEDERAL TRADE COMMISSION

16 CFR Parts 642 and 698 

[RIN 3084–AA94] 

Prescreen Opt-Out Disclosure

AGENCY: Federal Trade Commission.

ACTION: Final rule.

SUMMARY: The Fair and Accurate Credit 

Transactions Act of 2003 (‘‘FACT Act’’ 

or ‘‘Act’’) directs the Federal Trade 

Commission (‘‘FTC’’ or ‘‘Commission’’), 

in consultation with the Federal 

banking agencies and the National 

Credit Union Administration, to adopt a 

rule to improve the required notice to 

consumers regarding their right to opt 

out of prescreened solicitations for 

credit or insurance. This final rule 

implements this requirement.

EFFECTIVE DATE: This rule is effective on 

August 1, 2005.

FOR FURTHER INFORMATION CONTACT:

Jeanne-Marie Burke or Kellie Cosgrove 

Riley, Attorneys, (202) 326–3224, 

Division of Financial Practices, Bureau 

of Consumer Protection, Federal Trade 

Commission, 600 Pennsylvania Avenue, 

NW., Washington, DC 20580.

SUPPLEMENTARY INFORMATION: 

Statement of Basis and Purpose 

I. Background 

Section 615(d) of the Fair Credit 

Reporting Act (‘‘FCRA’’) requires that 

any person who uses a consumer report 

in order to make an unsolicited firm 

offer of credit or insurance to the 

consumer (‘‘prescreened offer’’ or 

‘‘prescreened solicitation’’), shall 

provide with each written solicitation a 

clear and conspicuous statement that: 

(A) Information contained in the 

consumer’s consumer report was used 

in connection with the transaction; (B) 

the consumer received the offer of credit 

or insurance because the consumer 

satisfied the criteria for credit 

worthiness or insurability under which 

the consumer was selected for the offer; 

(C) if applicable, the credit or insurance 

may not be extended if, after the 

consumer responds to the offer, the 

consumer does not meet the criteria 

used to select the consumer for the offer 

or any applicable criteria bearing on 

credit worthiness or insurability or does 

not furnish any required collateral; (D) 

the consumer has a right to prohibit 

information contained in the 

consumer’s file with any consumer 

reporting agency from being used in 

connection with any credit or insurance 

transaction that is not initiated by the 

consumer; and (E) the consumer may 

exercise the right referred to in 

subparagraph (D) by notifying a 

notification system established under 

section 604(e) [of the FCRA]. 

Section 615(d)(1) of the FCRA [15 U.S.C. 

1681m(d)(1)] 1

The Fair and Accurate Credit 

Transactions Act of 2003, Public Law 

108–159, 117 Stat. 1952 (FACT Act or 

the Act) was signed into law on 

December 4, 2003. Section 213(a) of the 

FACT Act amends FCRA section 615(d) 

to require that the statement mandated 

by section 615(d) ‘‘be presented in such 

format and in such type size and 

manner as to be simple and easy to 

understand, as established by the 

Commission, by rule, in consultation 

with the Federal banking agencies and 

the National Credit Union 

Administration.’’ 

On September 27, 2004, the 

Commission issued, and sought 

comment on, a proposed Rule 

implementing the requirements of 

section 213(a) of the FACT Act (‘‘the 

proposed Rule’’).2 In response to the 

proposed Rule, the Commission 

received approximately 60 comments 

from a variety of trade associations, 

creditors, insurers, consumer advocacy 

groups, and individual consumers. After 

carefully considering the comments 

received, the Commission adopts the 

proposed Rule with some modifications.

The final Rule carries out the 

Commission’s mandate to improve the 

prescreen notice so that it is simple and 

easy to understand. The FACT Act 

specifies that ‘‘simple and easy to 

understand’’ is to be achieved by 

establishing a format, type size, and 

manner for the presentation of the 

notice. These three factors indicate that 

‘‘simple and easy to understand’’ is 

meant to include both (1) the content, 

such as language and syntax, of the 

notice so that it effectively conveys the 

intended message to readers, and (2) the 

presentation and format of the notice 

such that it calls attention to the notice 

and enhances its understandability. 

Thus, the final Rule establishes certain 

baseline requirements for these two 

components to ensure that the notices 

meet the statutory mandate. As stated in 

the proposed Rule, the determination of 

whether a notice meets the ‘‘simple and 

easy to understand’’ standard is based 

on the totality of the disclosure and the 

manner and format in which it is 

presented, not on any single factor. 

Modifications have been made to the 

final Rule to make it clearer that the 

‘‘simple and easy to understand’’ 

standard is a flexible one. 

The final Rule: (1) Sets forth the 

purpose and scope of the Rule; (2) 

defines ‘‘simple and easy to 

understand’’; (3) requires a notice that 

consists of an initial statement that 

provides basic opt-out information 

(‘‘short notice’’), and a separate longer 

explanation that offers further 

information (‘‘long notice’’); (4) adds a 

definition for ‘‘principal promotional 

document,’’ the document in which the 

short notice must appear; (5) establishes 

the effective date for the Rule; and (6) 

proposes model notices that may be 

used for compliance. 

Therefore, having consulted with the 

Office of the Comptroller of the 

Currency, Board of Governors of the 

Federal Reserve System, Federal Deposit 

Insurance Corporation, Office of Thrift 

Supervision, and National Credit Union 

Administration, the FTC issues the 

following Rule. 

II. Overview of Comments Received 

The Commission received 

approximately 60 comments concerning 

the proposed Rule.3 The vast majority of 

these comments were from industry 

trade organizations 4 and the business 

community.5 Individual consumers, five 

Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 5023

insurers, such as Progressive; and credit reporting 

agencies, such as Equifax Information Services LLC, 

Experian Information Solutions, Inc., and 

TransUnion LLC.

6Congressman Spencer Bachus, Chair of the 

Subcommittee on Financial Institutions and 

Consumer Credit, of the House Financial Services 

Committee (R–AL); Congressman Paul Kanjorski 

(D–PA); Congressman John Sweeney (R–NY); 

Senator George Allen (R–VA); and Senator Jim 

Bunning (R–KY).

7These included the Consumer Action, National 

Consumers League, Consumer Federation of 

America, and Privacy Rights Clearinghouse.

8See http://www.federalreserve.gov/boarddocs/

rptcongress/.

9See, e.g., Comment, America’s Community 

Bankers #OL–100013; Comment, Discover Bank 

#OL–100016; Comment, Financial Services 

Roundtable #EREG–000004; Comment, Juniper 

Financial Corp., #000009; Comment, MasterCard 

International Incorporated #000012; Comment, Visa 

U.S.A. Inc. #000005; Comment, Wells Fargo & 

Company #000007; Comment, Wilmer Cutler 

Pickering Hale and Dorr LLP #OL–100045.

10See, e.g., Comment, Boeing Employees’ Credit 

Union #000020; Comment, Commerce Bancshares, 

Inc. #OL–100045; Comment, National Consumers 

League, et al. #OL–100011; Comment, Pennsylvania 

Credit Union Association #OL–100024; Comment, 

Privacy Rights Clearinghouse #OL–100015.

11See, e.g., Comment, National Consumers 

League, et al. #OL–100011; Comment, Privacy 

Rights Clearinghouse #OL–10015.

12See, e.g., Comment, Commerce Bancshares, Inc. 

#OL–100045; Comment, Mortgage Bankers 

Association #OL–100036; Comment, National 

Independent Automobile Dealers Association #OL–

100021; Comment, Union Federal Bank #OL–

100044.

13See, e.g., Comment, Discover Bank #OL–

100016; Comment, Financial Services Roundtable 

#EREG–000004; Comment, MBNA America Bank 

#OL–100031.

14See, e.g., Comment, Connors #OL–100014; 

Comment, National Consumers League, et al. #OL–

100011; Comment, Privacy Rights Clearinghouse 

#OL–100015.

15See, e.g., Comment, Coalition to Implement the 

FACT Act #OL–100042; Comment, Juniper 

Financial Corp. #000009; Comment, MasterCard 

International Incorporated #000012.

16See, e.g., Comment, Commerce Bancshares, Inc. 

#OL–100045; Comment, Credit Union National 

Association #000003; Comment, Mortgage Bankers 

Association #OL–100036; Comment, National 

Association of Federal Credit Unions #OL–100020; 

Comment, National Consumers League, et al. #OL–

100011; Comment, Privacy Rights Clearinghouse 

#OL–100015.

17See, e.g., Comment, Countrywide #000010; 

Comment, Visa U.S.A. Inc. #000005.

18See, e.g., Comment, Juniper Financial Corp. 

#000009; Comment, MasterCard International 

Incorporated #000012; Comment, Visa U.S.A. Inc. 

#000005; Comment, Wells Fargo & Company 

#000007.

19See, e.g., Comment, Mortgage Bankers 

Association #OL–100036.

20See, e.g., Comment, JPMorgan Chase Bank 

#OL–100019; Comment, Juniper Financial Corp. 

#000009.

21The eight factors to be considered in 

determining whether a statement is ‘‘simple and 

easy to understand’’ were: (1) Use of clear and 

concise sentences, paragraphs, and sections; (2) use 

of short explanatory sentences; (3) use of definite, 

concrete, everyday words; (4) use of active voice; 

(5) avoidance of multiple negatives; (6) avoidance 

of legal and technical business terminology; (7) 

avoidance of explanations that are imprecise and 

reasonably subject to different interpretations; and 

(8) use of language that is not misleading.

22See, e.g., Comment, Discover Bank #OL–

100016; Comment, Wells Fargo & Company 

#000007.

23See, e.g., Comment, Coalition to Implement the 

FACT Act #OL–100042; Comment, Equifax 

Information Services LLC #OL–100023; Comment, 

Juniper Financial Corp. #000009; Comment, 

MasterCard International Incorporated #000012.

members of Congress,6 and consumer 

advocacy groups 7 also submitted 

comments on the proposed Rule. In 

addition to considering the comments 

received, the Commission reviewed and 

considered the Board of Governors of 

the Federal Reserve System’s Report to 

the Congress on Further Restrictions on 

Unsolicited Written Offers of Credit or 

Insurance (‘‘FRB Prescreen Report’’).8

The Commission received comments 

on nearly all of the provisions contained 

in the proposed Rule. Most commenters, 

including consumers, businesses, trade 

associations, and consumer groups, 

expressed general support for a Rule 

requiring an improved and more 

understandable prescreen notice. 

However, commenters disagreed on 

what manner and format would best 

accomplish the goals of the FACT Act 

and what information should be 

contained in the notices.

The majority of industry commenters 

opposed the layered notice approach, 

asserting that a layered notice exceeds 

the FTC’s statutory authority, would 

overshadow other important notices, 

and would lead consumers to make 

uninformed decisions about whether to 

opt out.9 Some industry members, as 

well as consumer advocacy groups, 

supported the layered notice as an 

appropriate means of effecting the 

statutory directive of providing a simple 

and easy format for disclosing the 

required information.10 Commenters 

also disagreed on whether the type-size 

requirements should be larger 11 or 

smaller 12 than proposed, and whether 

the notice should include additional 

information, such as the benefits of 

prescreened offers,13 or prohibit any 

additional information from being 

included in the notice.14

In general, commenters also approved 

of the definition of ‘‘simple and easy to 

understand,’’ but some expressed 

concern that the proposed Rule’s list of 

factors to be considered in determining 

whether a notice met this definition 

might be considered a ‘‘checklist’’ rather 

than examples.15 In addition, 

commenters generally agreed that the 

Rule should also include a definition for 

‘‘principal promotional document.’’16

Although commenters generally 

supported the proposed Rule’s inclusion 

of model notices,17 some commenters 

suggested changes or additions to the 

language of those notices to achieve 

various goals, including using more 

‘‘neutral’’ language for the short 

notice,18 adding language regarding 

collateral requirements,19 and adding 

language regarding the benefits of 

prescreened offers.20

All of these comments, as well as 

others, are discussed more fully below. 

III. Section-By-Section Analysis 

A. Section 642.1: Purpose and Scope 

Proposed section 642.1(a) set forth the 

purpose of the proposed Rule, which 

was to implement section 213(a) of the 

FACT Act. Section 213(a) requires the 

FTC to establish the format, type size, 

and manner in which the notices to 

consumers regarding the right to opt out 

of prescreened solicitations are to be 

presented. The Commission received no 

comments regarding this section and it 

is adopted as proposed. 

Proposed section 642.1(b) set forth the 

scope of the proposed Rule. The Rule 

applies to any person who uses a 

consumer report on any consumer in 

connection with any credit or insurance 

transaction that is not initiated by the 

consumer, pursuant to section 

604(c)(1)(B) of the FCRA. The 

Commission received no comments 

regarding this section and it is adopted 

as proposed. 

B. Section 642.2: Definitions 

1. ‘‘Simple and Easy to Understand’’

The proposed Rule contained one 

definition in section 642.2. ‘‘Simple and 

easy to understand’’ was defined to 

mean ‘‘plain language designed to be 

understood by ordinary consumers.’’

Proposed section 642.2 also listed eight 

factors that would be considered in 

determining whether a statement is 

‘‘simple and easy to understand.’’21

The Commission received several 

comments concerning this definition. 

Some commenters noted that they 

supported the definition, did not 

suggest any changes, and encouraged 

the Commission to retain it in the final 

Rule.22 Other commenters suggested 

that the Commission eliminate the eight 

factors from the definition. These 

commenters expressed various concerns 

about the factors, including that they 

unduly complicate an otherwise 

uncomplicated definition and could be 

interpreted as a checklist of 

requirements that must each be present 

in order to meet the definition.23

As the Commission noted in the 

notice of proposed rulemaking 

(‘‘NPRM’’) accompanying the proposed 

Rule, the eight factors are intended to 

provide guidance to companies in 

5024 Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 

24The Commission also notes that, in addition to 

meeting the ‘‘simple and easy to understand’’

definition set forth by the Rule, prescreen opt-out 

notices must continue to meet the ‘‘clear and 

conspicuous’’ standard required by the FCRA. One 

recent case from the Court of Appeals for the 

Seventh Circuit noted that, in determining whether 

a prescreen notice is ‘‘clear and conspicuous,’’

factors to be considered are: ‘‘the location of the 

notice within the document, the type size used 

within the notice as well as the type size in 

comparison to the rest of the document * * * 

whether the notice is set off in any other way—

spacing, font style, all capitals, etc.’’ Cole v. U.S. 

Capital, Inc., 389 F.3d 719, 731 (7th Cir. 2004). The 

court concluded, ‘‘In short, there must be something 

about the way the notice is presented in the 

document such that the consumer’s attention will 

be drawn to it.’’ Id. Thus, the ‘‘simple and easy to 

understand’’ standard overlaps to some extent with 

the ‘‘clear and conspicuous’’ standard.

25See, e.g., Comment, Commerce Bancshares, Inc. 

#OL–100045; Comment, Credit Union National 

Association #000003; Comment, Mortgage Bankers 

Association #OL–100036; Comment, National 

Association of Federal Credit Unions #OL–100020; 

Comment, National Consumers League, et al. #OL–

100011; Comment, Privacy Rights Clearinghouse 

#OL–100015.

26Comment, Michigan Credit Union League #OL–

100030.

27Comment, Mortgage Bankers Association #OL–

100036.

28See, e.g., Comment, Financial Services 

Roundtable #EREG–000004; Comment, GE 

Consumer Finance-Americas #OL–100018.

29See, e.g., Comment, Consumer Bankers 

Association #OL–100028; Comment, HSBC North 

complying with the Rule, while 

allowing them to maintain flexibility to 

determine how best to meet the 

definition. 

The Commission has revised the Rule 

to clarify that use of clear and concise 

sentences, paragraphs, and sections is a 

mandatory part of the definition, but the 

remaining seven factors are simply 

examples to be considered in meeting 

the ‘‘simple and easy to understand’’

definition. These factors should neither 

be considered to be mandatory, nor to 

constitute an exhaustive list. 

In addition, the Commission has 

determined to specify in the final Rule 

that the layered notice is a required 

component of the ‘‘simple and easy to 

understand’’ definition. The 

Commission has determined that the 

layered format makes the prescreen 

disclosures simpler and easier to 

understand, and it is appropriate that it 

specifically be incorporated into the 

definition.24

2. ‘‘Principal Promotional Document’’

Proposed section 642.3(a)(2) required 

that the short form of the layered notice 

be placed on the first page of the 

principal promotional document. The 

Commission noted in the NPRM that the 

question of what constitutes the 

‘‘principal promotional document’’ is 

fact specific, but that, in general, the 

Commission would consider the cover 

letter or the document that is designed 

to be seen first by the consumer to be 

the ‘‘principal promotional document.’’

The proposed Rule did not define 

‘‘principal promotional document,’’

however, and the Commission requested 

comment on whether such a definition 

was necessary. 

The Commission received several 

comments requesting that the 

Commission provide a definition for 

‘‘principal promotional document.’’ 25

Some commenters suggested specific 

definitions for the term, such as the 

document intended to be seen first by 

the consumer, the document that 

addresses the consumer directly with 

the offer, the cover letter or other 

document used to introduce the offer, or 

the cover letter or other document that 

the consumer sees first when opening 

the solicitation. At least one commenter 

asserted that the proper location for the 

disclosure is in the application or the 

offer of credit.26 Another commenter 

suggested that factors to be considered 

in determining whether a document is 

the principal promotional document 

should include (1) whether the 

document is the first page of a letter to 

a consumer, or (2) whether the 

document contains the credit terms 

being offered.27

In addition, some commenters 

expressed concern that the concept of a 

principal promotional document would 

not translate well to an electronic 

prescreened offer. Specifically, these 

commenters were concerned that a popup advertisement that appeared on the 

consumer’s computer screen would 

have to contain the short notice.28 These 

commenters suggested that pop-up 

advertisements should be considered 

similar to envelopes, and therefore not 

considered the principal promotional 

document.

The Commission agrees with the 

commenters that a definition would 

help companies to comply with the Rule 

and has considered all of the suggested 

definitions. The final Rule defines 

principal promotional document as the 

document that is designed to be seen 

first by the consumer, such as the cover 

letter. Requiring that the disclosure 

appear early in the solicitation enhances 

the noticeability of the disclosure, 

thereby aiding in making the disclosure 

simple and easy to understand. The 

final Rule does not link the definition to 

the credit terms or the application, 

because many different documents 

within the solicitation may contain 

some or all of the credit terms, and 

those consumers who are interested in 

opting out of receiving solicitations for 

future offers may not be likely to review 

the terms and conditions of the offer at 

hand. Therefore, linking the definition 

to credit terms would not provide 

guidance to businesses, nor would it 

ensure that those interested in opting 

out could easily locate the notice. 

In addition, the Commission has 

considered the concerns expressed by 

the commenters regarding the 

application of the definition to 

electronic offers. The Commission is in 

agreement with those commenters who 

equated a pop-up promotional screen 

with an envelope. Therefore, the 

Commission will consider the principal 

promotional document in those 

circumstances to be the page designed 

to be seen first by the consumer who 

clicks on the pop-up promotional 

screen. 

C. Section 642.3: Prescreen Opt-Out 

Notices 

The proposed Rule required a 

‘‘layered’’ notice—that is, a notice that 

includes both an initial short portion 

and a longer portion contained later in 

the solicitation. The short portion of the 

notice informed consumers about the 

right to opt out of receiving prescreened 

solicitations and specified a toll-free 

number for consumers to call to exercise 

that right. No additional information 

could be included in the short notice. 

The long portion of the notice provided 

consumers with all of the additional 

information required by section 615(d) 

of the FCRA. The long notice could 

contain additional information that did 

not interfere with, detract from, 

contradict, or otherwise undermine the 

purpose of the opt-out notice. The 

proposed Rule set forth certain baseline 

requirements for the type size of the 

notice, as well as the presentation of the 

notice.

Most of the comments the 

Commission received focused on 

various aspects of this section of the 

proposed Rule. Commenters addressed 

several topics pertaining to this section, 

including the Commission’s statutory 

authority to prescribe a layered notice, 

the Commission’s statutory authority to 

require the notice to appear in 

electronic solicitations, the content of 

the notice, the type size of the notice, 

and the format and manner in which the 

notice is presented, including within 

electronic solicitations. Each of these is 

addressed in turn below. 

1. Statutory Authority for the Layered 

Notice 

Several commenters questioned 

whether the Commission had exceeded 

its statutory authority by mandating a 

layered notice.29 Many of these 

Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 5025

American Holdings #000004; Comment, Juniper 

Financial Corp. #000009; Comment, MasterCard 

International #000012; Comment, Visa U.S.A. Inc. 

#000005; Comment, Wachovia Corporation #OL–

100017.

30See, e.g., Comment, Juniper Financial Corp. 

#000009; Comment, MasterCard International 

#000012; Comment, Wachovia Corporation #OL–

100017.

31See 12 CFR 226.5a.

32Comment, Visa U.S.A. Inc. #000005.

33See, e.g., Comment, Wilmer Cutler Pickering 

Hale and Dorr LLP #OL–100046. (For a discussion 

of the consumer survey, see 69 FR 58861, 58864.)

34The study used standard consumer testing 

methodology and consisted of an initial exposure, 

in which the test instrument was presented to the 

consumer and then removed from view, and a 

forced exposure, in which the consumer’s attention 

was focused on specific information in the test 

instrument. See Manoj Hastak, Ph.D., The 

Effectiveness of ‘‘Opt-Out’’ Disclosures in PreScreened Credit Card Offers, at 3–4, located at http:/

/www.ftc.gov/reports/prescreen/

040927optoutdiscprecreenrpt.pdf. In the view of the 

Commission’s consumer research expert consultant, 

the initial exposure was designed to simulate 

‘‘fairly natural viewing conditions.’’ Id. at 4. The 

FRB Prescreen Report indicates that, for most of 

those consumers who actually open and review 

prescreened solicitations, this approach may indeed 

approximate real-world conditions. In a nationwide 

survey of consumers, the FRB found that 56% of 

consumers throw prescreened solicitations away 

without opening them, 34% merely ‘‘glance’’ at 

them, and the remaining 10% read them closely. 

See FRB Prescreen Report at 32. The initial 

exposure may have simulated the experience of 

consumers who glance at prescreened solicitations 

but do not examine them closely, that is, the 

experience of most consumers who actually open 

prescreened solicitations.

35The Commission has long recognized that 

methodological perfection is not required before a 

consumer survey can be probative and reliable; 

rather, imperfections in methodology affect the 

weight that is given to the survey. See, e.g., In re 

Stouffer Foods Corp., 118 F.T.C. 746, 799 (1994); In 

re Bristol-Meyers Co., 85 F.T.C. 688, 743–44 (1975).

36See 69 FR 58861, 58864. In addition, although 

there was not a statistical difference between the 

improved and layered versions in the 

communication of the opt-out right, the layered 

version was more effective in the initial ‘‘natural’’

exposure (as compared to the second ‘‘forced’’

exposure) at communicating how to exercise that 

right.

37The results reported in the FRB Prescreen 

Report indicate that a layered notice may be a very 

effective means to ensure that consumers who open 

prescreened solicitations will see the prescreen 

disclosure. As noted, supra note 34, the FRB 

Prescreen Report found that 56% of consumers 

throw prescreened solicitations away without 

opening them, 10% of consumers open the 

solicitations and examine them, and the remainder 

(34%) open the solicitations and ‘‘glance’’ at them. 

Id. Those consumers who immediately throw the 

solicitation away are not likely to see the notice 

wherever it is located; those who examine the 

solicitation closely might see any disclosure, even 

one on the back of the page or in fine print; but 

those consumers who ‘‘glance’’ at the solicitation 

may be more likely to see a prescreen disclosure 

located on the first page of the principal 

promotional document that is printed in a 

noticeable type size and set apart from other text 

on the page. Thus, a layered notice seems more 

likely to be seen by the majority of consumers who 

open prescreened solicitations.

38See, e.g., Comment, American Financial 

Services Association #OL–100038; Comment, 

Discover Bank #OL–100016.

commenters stated that the Commission 

was improperly specifying a definition 

of the clear and conspicuous standard 

contained in section 615(d) of the 

FCRA, including imposing a 

prominence requirement.30 These 

commenters argued that Congress did 

not intend this disclosure to be more 

prominent than other disclosures 

required by law, such as the so-called 

‘‘Schumer box,’’31 or that any one 

element of the disclosure be more 

prominent than another. One 

commenter opined that the layered 

notice was actually two notices and 

therefore was contrary to the language 

in section 615(d) of the FCRA requiring 

‘‘a clear and conspicuous statement.’’32

The Commission has considered these 

comments and has decided to retain the 

layered notice approach in the final 

Rule. The FACT Act requires that the 

notice be ‘‘presented in a format and in 

such type size and manner as to be 

simple and easy to understand, as 

established by the Commission.’’

(Emphasis added). Thus, the plain 

language of the statute provides that 

‘‘simple and easy to understand’’

encompasses presentation of the notice. 

The Commission has concluded that the 

layered notice is an appropriate and 

effective means of achieving this goal, 

and that nothing in the FACT Act or the 

FCRA prohibits the use of a layered 

notice approach. 

Under section 615(d) of the FCRA, the 

prescreen disclosure must be clear and 

conspicuous. Section 213(a) of the 

FACT Act imposed the additional 

requirement that the disclosure be 

‘‘simple and easy to understand.’’ 

Therefore, the statutory scheme 

establishes a different standard for the 

prescreen disclosure than it imposes on 

other disclosures that must only be clear 

and conspicuous. There is no evidence 

in the record that the layered notice 

required by this Rule will compromise 

the communication of other required 

disclosures in prescreened solicitations.

Some commenters stated that, even if 

the Commission has authority to require 

a layered notice, it was improper for the 

Commission to rely upon the consumer 

survey that the Commission undertook 

as part of developing the proposed Rule 

as support for the layered notice 

requirement. These commenters 

criticized the methodology of the survey 

as unrepresentative of consumer 

reactions in a real-world setting.33 The 

Commission recognizes the limitations 

of any survey testing methodology 

because of the artificial setting of the 

test environment, but maintains that the 

study approximated real-world 

conditions to the extent feasible.34 The 

Commission believes that the survey 

provides probative evidence of the 

comparative effectiveness of the three 

versions of notices it tested (‘‘current,’’

‘‘improved,’’ and ‘‘layered’’).35 The 

survey found that the layered notice 

better communicated the central 

messages—consumers’ right to opt out 

and how to exercise the right—than did 

the current version.36

A layered notice is particularly useful 

in cases such as this, where the 

information that must be disclosed 

consists of a relatively simple central 

proposition accompanied by a larger 

quantity of explanatory or ancillary 

information. The layered approach 

allows for clear communication of the 

central message with a clear reference to 

the additional required information. 

Those consumers interested in the 

additional information have the 

opportunity to view that information in 

another location.37

2. Statutory Authority To Require 

Notice in Electronic Solicitations

Several commenters suggested that 

the FCRA does not apply to solicitations 

that are transmitted electronically 

because such documents are not 

‘‘written,’’ as that term is used in the 

FCRA.38 The Commission believes that 

‘‘written’’ refers to information that is 

capable of being preserved in a tangible 

form and read, as opposed to an oral 

statement that is intangible and 

transitory. As with information 

presented on paper, consumers using 

electronic media can read the 

information and preserve it for possible 

later review either by printing it on 

paper, saving it on disk, or by some 

other means. The Commission believes 

that the purpose of section 213(a) of the 

FACT Act was to enhance consumers’

awareness of opt-out rights, under 

section 615(d) of the FCRA, whenever 

they receive a written solicitation in any 

form, regardless of the means of 

transmission. Therefore, the 

Commission has determined that the 

Rule should apply to all written 

solicitations, even if they are 

transmitted electronically.

3. Content of the Notice 

Commenters expressed two primary 

concerns with the content of the short 

portion of the notice: (1) Whether it is 

appropriate to include a statement of the 

opt-out right and the telephone number 

of the opt-out system in the short 

portion of the notice; and (2) whether 

companies should be permitted to 

include additional information, beyond 

5026 Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 

39See, e.g., Comment, Coalition to Implement the 

FACT Act #OL–100040; Comment, Direct Marketing 

Association #OL–100035; Comment, TransUnion 

LLC #000022; Comment, Wachovia Corporation 

#OL–100017.

40See, e.g., Comment, American Bankers 

Association #OL–100040; Comment, Capital One 

Financial Corporation #OL–100033.

41See, e.g., Comment, American Financial 

Services Association #OL–100038; Comment, 

Capital One Financial Corporation #OL–100033.

42Although the FCRA specifically mentions both 

the address and telephone number for the 

notification system, the Commission has 

determined that it is appropriate to require only the 

telephone number in the short notice because: (1) 

the Commission understands that space is at a 

premium in prescreened solicitations, particularly 

on the first page of the principal promotional 

document, and therefore does not want to require 

more information than necessary in the short 

notice; and (2) the communication of the central 

message is likely to be more effective with less 

verbiage in the short notice. The telephone number 

requires less space and less verbiage than the 

address.

43For example, FACTA section 213(a), amending 

FCRA section 615(d)(2), is entitled, ‘‘Enhanced 

Disclosure of the Means Available to Opt Out of 

Prescreened Lists.’’ Although the title of a statutory 

section cannot limit that section, it may assist in 

explaining what was intended by that section. See 

also, e.g., 149 Cong. Rec. S13851–52 (daily ed. Nov. 

4, 2003) (statement of Sen. Sarbanes) (noting that 

the amendments to the FCRA ‘‘will require a 

summary of consumers’’ rights to opt out of 

prescreened offers.’’); 149 Cong. Rec. S13855 (daily 

ed. Nov. 4, 2003) (statement of Sen. Johnson) 

(noting that the amendments to the FCRA ‘‘take[] 

important new steps to empower consumers to 

reduce unwanted credit solicitations.’’); 149 Cong. 

Rec. S15806–07 (daily ed. Nov. 24, 2003) (statement 

of Sen. Sarbanes) (noting that the amendments to 

the FCRA will ‘‘help ensure that consumers are 

aware of how to opt out of the prescreening process 

* * *. The FTC * * * will be required to write 

rules on the size and prominence of the disclosure 

of the opt-out telephone number that is included 

with offers of credit to consumers.’’)

44FRB Prescreen Report at 32.

45See, e.g., Comment, Connors #OL–100014; 

Comment, National Consumers League, et al. #OL–

100011; Comment, Privacy Rights Clearinghouse 

#OL100015.

46See, e.g., Comment, CDIA #OL–100026; 

Comment, Direct Marketing Association #OL–

100035; Comment, Wilmer Cutler Pickering Hale 

and Dorr LLP #OL–100046.

47Congressional Record, November 21, 2003, 

page H12219. See also infra note 51.

that mandated by the statute, in any part 

of the layered notice. 

Inclusion of opt-out right and 

telephone number in the short notice.

Several commenters suggested that it 

was improper for the Commission in the 

proposed Rule to require presentation of 

the opt-out right and the telephone 

number to opt out for placement in the 

short portion of the notice, while 

relegating other statutorily-required 

information to the long portion of the 

notice.39 Some of these commenters 

stated that the Commission did not have 

the authority to make certain elements 

of the disclosure (in particular, the 

telephone number) more prominent 

than others by placing them in the short 

portion of the notice. Some were 

concerned that consumers would not 

read the long portion of the notice if 

they could obtain all of the information 

necessary to opt out from the short 

portion, which might lead them to make 

decisions about opting out without the 

benefit of all pertinent information.40

Other commenters expressed concern 

that consumers may mistakenly assume 

they can use the opt-out telephone 

number to reply to the offer itself, 

leading to frustration and confusion.41

As stated above, Congress has 

directed the Commission to prescribe 

the presentation of the notice, including 

its manner and format. In exercising that 

authority, the Commission has 

determined to include the opt-out right 

and telephone number in the short 

notice in the final Rule.42 Nothing in the 

statute prohibits the Commission from 

exercising its authority in this manner, 

and, in fact, the only legislative history 

specifically discussing the content of 

the required notice supports this result 

and indicates Congress’ interest in 

highlighting the opt-out right.43

The FRB Prescreen Report seems to 

confirm Congress’ concern that the 

existing notice under FCRA section 

615(d) has not been especially effective 

at communicating to consumers that 

they have a right to opt out of 

prescreened solicitations. The FRB 

conducted a nationwide survey of 

consumers and found that only 20% of 

consumers were aware of the opt-out 

right, and that less than half of those 

had learned of it through the section 

615(d) notice.44 The Report cites the 

pending ‘‘review of the presentation and 

the placement of the notice in written 

prescreened solicitations’ mandated by 

the FACT Act (that is, the Commission’s 

rulemaking proceeding), as one basis for 

its recommendation that further 

legislative changes are not necessary at 

this time.

The Commission has concluded that 

the statute’s purpose is best 

accomplished by requiring that the short 

notice include the essential information 

that consumers need if they choose to 

opt out. Those consumers who are 

seeking more information about 

prescreened offers and their options are 

invited by the short notice to obtain 

further information from the long 

notice. 

Finally, the Commission is not 

persuaded that consumers will be 

confused about the purpose of the 

telephone number, given that the short 

notice will explicitly state that the 

number is to be used for opting out of 

future prescreened offers. 

Additional information in the notices.

The proposed Rule prohibited senders 

of prescreened solicitations from 

including information in the short 

portion of the notice other than that 

specified by the Rule—that is, 

consumers’ right to opt out and how to 

exercise it. The proposed Rule 

contained no such restriction on the 

content of the long portion of the notice, 

so long as any additional content did 

not interfere with, detract from, 

contradict, or otherwise undermine the 

purpose of the notice. 

Some commenters supported the 

proposed Rule’s prohibition on 

additional information being included 

in the short notice, and encouraged the 

Commission to prohibit additional 

information in the long notice as well. 

These commenters argued that allowing 

additional information in the notices 

would be contrary to the Commission’s 

statutory mandate, confuse consumers, 

and allow marketers to discourage 

consumers from opting out.45 Other 

commenters, however, advocated 

allowing additional information, such as 

the benefits of prescreened offers and 

the consequences of opting out, in both 

the short and long notices in order to 

provide consumers with sufficient 

information to make an informed 

decision about whether to opt out.46

Some of these commenters cited to an 

exchange between Representatives 

Bachus and Kanjorski during the House 

of Representatives’ consideration of the 

bill, in which the Congressmen stated 

that consumers should be aware ‘‘not 

only of the right to opt out of receiving 

prescreened solicitations, but also of the 

benefits and consequences of opting 

out.’’47 Representatives Bachus and 

Kanjorski submitted a comment to the 

Commission expressing the importance 

of consumer awareness of the benefits 

and consequences of opting out.

The Commission recognizes that 

prescreened offers may confer many 

benefits on consumers. As discussed in 

several of the comments, such offers 

may be an easy and efficient means for 

consumers to learn of competing credit 

or insurance offers and to identify those 

that best suit their needs. The 

Commission also acknowledges, as 

stated in certain of the comments, that 

the growth in prescreened offers has 

coincided with a general trend towards 

lower initial interest rates and certain 

other more favorable terms, and that a 

substantial percentage of credit card 

enrollments result from prescreened 

offers. Moreover, the Commission 

recognizes that if prescreened offers 

Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 5027

48See also FRB Prescreen Report at 28–36 

(discussing the benefits of receiving prescreened 

offers).

49See also FRB Prescreen Report at 37–46 

(discussing the costs of receiving prescreened 

offers).

50See, e.g., Funkhouser, An Empirical Study of 

Consumers’ Sensitivity to the Wording of 

Affirmative Disclosure Messages, 3 J. Pub. Pol. & 

Mktg. at 31, 33 (finding that ‘‘information must be 

presented simply and straightforwardly,’’ and 

‘‘affirmative disclosures should say exactly what 

they are intended to mean.’’) (Emphasis in the 

original).

51The colloquy between Representatives Bachus 

and Kanjorski cited by some commenters refers to 

this public awareness campaign as a vehicle for 

informing consumers of the benefits and 

consequences of opting out. See 149 Cong. Rec. 

H12,218–19 (daily ed. Nov. 21, 2003) (‘‘Mr. 

KANJORSKI. Mr. Speaker, does the gentleman share 

with me the understanding that the FTC’s public 

awareness campaign is to be designed to increase 

public awareness, not only of the right to opt out 

of receiving prescreened solicitations, but also of 

the benefits and consequences of opting out? Mr. 

BACHUS. Mr. Speaker, yes, I share that 

understanding.’’).

52See, e.g., Comment, National Consumers 

League, et al. #OL–100011. See also Comment, 

Privacy Rights Clearinghouse #OL–100015 

(commenting that the long notice type size 

requirement was too small).

53See, e.g., Comment, Boeing Employees’ Credit 

Union #000020; Comment, Michigan Credit Union 

League #OL–100030; Comment, Mortgage Bankers 

Association #OL–100036; Comment, National 

Independent Automobile Dealers Association #OL–

100021; Comment, Union Federal Bank #OL–

100044.

54See, e.g., Comment, Credit Union National 

Association #000003; Comment, Navy Federal 

Credit Union #000006.

55See, e.g., Comment, Coalition to Implement the 

FACT Act #OL–100042; Comment, Consumer 

Bankers Association #OL–100028; Comment, 

TransUnion LLC #000022.

56See, e.g., Comment, Countrywide #000010.

57See, e.g., Comment, Credit Union National 

Association #000003; Comment, Countrywide 

#000010; Comment, Progressive #OL–100010.

58See, e.g., Comment, Countrywide #000010; 

Comment, National Independent Automobile 

Dealers Association #OL–100021; Comment, 

Progressive #OL–100010.

became less viable, marketers may 

switch to direct mail solicitations, 

which may be more costly and carry less 

favorable terms.48 At the same time, the 

Commission notes the concerns raised 

by certain commenters about the alleged 

costs of prescreening, such as the 

privacy implications for those 

consumers who do not wish to have 

their personal financial information 

shared or used to make unsolicited 

credit and insurance offers.49

Regardless of the costs and benefits of 

prescreening, the FCRA provides that 

consumers may opt out of prescreened 

offers, and simply directs the 

Commission to determine how best to 

inform consumers of this right and how 

to exercise it. Moreover, the FCRA does 

not require that marketers notify 

consumers of the consequences of 

opting out, nor does it direct the 

Commission to require such a 

disclosure. The final Rule, therefore, 

requires only the statutorily-mandated 

messages, but permits additional 

information where appropriate. 

The Commission has concluded that 

permitting additional information in the 

short notice could significantly 

diminish the communication of the 

statutorily-mandated message.50 The 

final Rule, like the proposed Rule, does 

allow additional information, including 

information about the benefits of 

prescreening, in the long notice, if that 

information does not interfere with, 

detract from, contradict, or undermine 

the purpose of the prescreen notices. 

The Commission believes this approach 

allows marketers to provide consumers 

with information that may be useful to 

them in making their decisions, while at 

the same time not interfering with the 

statutory mandate to make the notices 

simple and easy to understand. The 

Commission also notes that marketers 

are free to include information about 

prescreening elsewhere in their 

solicitations. Finally, section 213(d) of 

the FACT Act requires the Commission 

to undertake a public awareness 

campaign to alert consumers to the 

availability of the opt-out right. The 

Commission intends to use this 

campaign to educate consumers about 

the benefits and consequences of opting 

out.51

4. Type Size of the Notice 

The proposed Rule required the short 

portion of the notice to be in a type size 

that is larger than the principal text on 

the same page, but in no event smaller 

than 12-point type, and the long portion 

of the notice to be in a type size that is 

no smaller than the type size of the 

principal text on the same page, but in 

no event smaller than 8-point type. 

Some commenters asserted that the 

type size prescribed for the short notice 

was adequate, but that the type size for 

the long notice was too small.52 Others 

found the type size required for the long 

notice to be appropriate, but opined that 

the type size for the short notice was too 

large.53 Still others proposed that the 

Commission adopt the approach used in 

the commentary to the Truth in Lending 

Act’s implementing Regulation Z, which 

deems disclosures in 12-point type to be 

readily noticeable, but permits smaller 

type size to be used.54 A few 

commenters suggested that the 

Commission not impose a type-size 

requirement at all,55 or that the 

requirement only be relative to 

surrounding text rather than specifying 

an absolute size.56

The Commission has considered these 

comments, but has determined not to 

change the type-size requirements for 

written prescreened solicitations. The 

FACT Act directs the Commission to 

prescribe a rule that establishes, among 

other things, a type size that is sufficient 

to render the notice simple and easy to 

understand. It is important that the 

notices be large enough to be noticed 

and readable by ordinary consumers. At 

the same time, the Commission 

understands that space is at a premium 

in prescreened solicitations. Requiring 

the short portion of the notice to be in 

a type size that is larger than the 

principal text on the same page, 

combined with a minimum 12-point 

type-size requirement, is sufficient to 

ensure that it is noticeable and readable 

without imposing unnecessary expense 

on marketers. 

The long notice, which contains 

additional information, presents a 

somewhat different calculus. Consumers 

who see the short notice and are 

interested in learning further 

information are directed by the short 

notice to the long notice. Accordingly, 

the Commission believes that the long 

notice should be in a type size that is 

sufficiently large to be readable, but that 

there is less need for the long notice to 

be readily noticeable. Balancing these 

interests, the Commission concludes 

that the long notice should be no 

smaller than 8-point type and no 

smaller than the principal text on the 

same page. 

Some commenters also expressed 

concerns about complying with the 

type-size requirements in electronic 

solicitations. Several commenters 

pointed out that because the settings of 

the computer on which a solicitation is 

viewed can alter a solicitation’s format, 

meeting a specific minimum point 

requirement would be burdensome.57

These commenters suggested that the 

Commission instead impose a standard 

of relative prominence for electronic 

solicitations, which would require, for 

example, that the short notice be larger 

than the principal text.58 The 

Commission agrees that, for electronic 

solicitations, a standard of relative 

prominence is an appropriate means by 

which to accommodate the vast range of 

electronic devices that may be used to 

view the offer. Thus, the final Rule 

provides that, for electronic 

solicitations, marketers must take 

reasonable steps to ensure that the short 

notice is in a type size that is larger than 

the principal text on the same page. The 

long notice must be in a type size no 

smaller than the principal text on the 

same page.

5028 Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 

59See, e.g., Comment, Property Casualty Insurers 

Association of America #000008.

60See, e.g., Comment, National Consumers 

League, et al. #OL–100011; Comment, Privacy 

Rights Clearinghouse #OL–100015.

61See, e.g., Comment, Coalition to Implement the 

FACT Act #OL–100042.

62See, e.g., Comment, National Independent 

Automobile Dealers Association #OL–100021.

63See, e.g., Comment, American Council of Life 

Insurers #OL–100027.

64See, e.g., Comment, Credit Union National 

Association #000003.

65See, e.g., Comment, Credit Union National 

Association #000003.

66See, e.g., Comment, Wachovia Corporation 

#OL–100017.

67See, e.g., Comment, Financial Services 

Roundtable #EREG–000004; Comment, MasterCard 

International Incorporated #0000012.

68See, e.g., Comment, MasterCard International 

Incorporated #0000012.

69For example, 12 CFR part 226, appendix G, 

requires that the headings in certain Truth-inLending disclosures be in bolded type style. This 

would not preclude companies from also placing 

the prescreen disclosure in bolded type style.

70See, e.g., Comment, Consumer Bankers 

Association #OL–100028; Comment, Juniper 

Financial Corp. #000009; Comment, MasterCard 

International Incorporated #100012.

5. Form of the Notice 

The proposed Rule set forth certain 

baseline requirements for the form of 

both the long and the short portions of 

the notice. The proposed Rule required 

the short notice to be on the front side 

of the first page of the principal 

promotional document in the 

solicitation, or, if provided 

electronically, on the first screen; 

located on the page and in a format so 

that it is distinct from other text; and in 

a type style that is distinct from other 

type styles used on the same page. The 

proposed Rule required the long notice 

to begin with a heading identifying it as 

the ‘‘OPT-OUT NOTICE’’; be in a type 

style that is distinct from other type 

styles used on the same page; and be set 

apart from other text on the page. The 

Commission received several comments 

concerning these requirements 

generally, as well as specific comments 

regarding the required location, type 

style, and heading requirements. These 

are addressed in turn below. 

General comments.

Some commenters asserted that the 

requirements regarding form did not 

provide companies with enough 

flexibility to determine the best method 

for making the notices clear and 

conspicuous, as well as simple and easy 

to understand.59 Conversely, other 

commenters were concerned that the 

requirements were not specific enough 

to ensure that the notices would meet 

the statutory standards.60 These 

commenters suggested, for example, that 

the Rule require businesses to use 

bolded type style, rather than allowing 

them the flexibility to determine how to 

comply with the distinct type style 

requirement.

The Commission has considered these 

comments and declines to alter the 

baseline requirements in the final Rule. 

The requirements are not overly 

restrictive and allow companies 

flexibility to determine how best to use 

the basic formatting tools set forth in the 

Rule to make a statement noticeable and 

understandable. At the same time, the 

requirements provide sufficient 

specificity to ensure that the notices are 

simple and easy to understand. 

Location of notices in one-page 

solicitations.

Several commenters noted that certain 

prescreened solicitations may consist of 

only a single page, and recommended 

that the final Rule not require a layered 

format in that circumstance.61 Others 

requested that the Commission clarify 

that the short and long portions of the 

notice could both appear on the first 

page of the principal promotional 

document.62 Others stated that, because 

prescreened offers of insurance usually 

consist of a single page or a fold-out self 

mailer, the final Rule should not apply 

to prescreened offers of insurance.63

Section 615(d) of the FCRA clearly 

covers prescreened offers of insurance, 

and the Commission declines to 

establish an exemption for such offers 

from the final Rule. The Commission 

also declines to provide an exception 

from the layered notice requirement for 

one-page solicitations. Even in a onepage solicitation, the layered format 

contributes to making the notice simple 

and easy to understand. The 

Commission agrees that both the short 

and long portions of the notice may 

appear on the first page of the principal 

promotional document. As in the 

proposed Rule, the final Rule allows 

businesses to place the long notice in 

any location within the solicitation so 

long as that location is referenced in the 

short notice. 

Location of notices in electronic 

solicitations.

Because the settings of the device on 

which an electronic solicitation is 

viewed can alter a solicitation’s format, 

some commenters objected to the 

requirement that the short-form notice 

appear on the first screen of an 

electronic solicitation.64 Some 

commenters proposed that the short 

portion of the notice simply be required 

to appear on the first page of an 

electronic solicitation,65 or ‘‘reasonably 

proximate to, or included in, the main 

marketing message,’’ 66 in order to 

accommodate variations among viewing 

devices. By contrast, other commenters 

supported requiring the short notice to 

appear on the first screen of the offer.67

The Commission has determined that, 

for the reasons stated in the comments, 

it is not practicable to require that the 

short portion of the notice always 

appear on the first page or first screen 

of electronic solicitations. Thus, the 

final Rule requires that, for electronic 

solicitations, the short notice be 

included on the same page and in close 

proximity to the principal marketing 

message. This standard ensures that 

consumers viewing the solicitation will 

be reasonably likely to see the short 

notice. 

Distinct type style requirement.

Some commenters requested that the 

Commission modify the proposed Rule 

to clarify that the type style of the notice 

must contrast only with the principal

type style used on the same page, rather 

than with all type styles on the page.68

The Commission agrees that this 

clarification should be made. 

Companies should not be precluded, for 

example, from presenting the notices in 

bolded type style simply because a 

small portion of the text on the page is 

in bold.69 Therefore, the final Rule 

specifies that both the short and long 

portions of the notice must be in a type 

style that is distinct from the type style 

of the principal text on the same page.

Long notice heading.

The proposed Rule required that the 

long portion of the notice include the 

heading ‘‘OPT-OUT NOTICE.’’ Some 

commenters suggested that this heading 

should reflect the totality of information 

in the long notice, rather than focusing 

on the opt-out information in the 

notice.70 These commenters suggested a 

variety of new headings, such as 

‘‘PRESCREEN DISCLOSURES.’’

The Commission has considered these 

comments and agrees that the long 

notice heading should be modified to 

reflect the totality of the information 

contained in that portion of the notice. 

Therefore, the final Rule requires that 

the long notice begin with a heading 

identifying it as the ‘‘PRESCREEN & 

OPT-OUT NOTICE.’’

D. Section 682.4: Effective Date 

The Commission initially proposed to 

make the Prescreen Opt-Out Disclosure 

Rule effective 60 days after publication 

of the final Rule. Many industry 

commenters requested a longer effective 

date in order to allow covered entities 

to implement changes to their 

prescreened solicitations. These 

commenters explained that prescreened 

solicitations are generally prepared 

several months in advance, and 

Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 5029

71See, e.g., Comment, American Council of Life 

Insurers #OL–100027; Comment, Boeing 

Employees’ Federal Credit Union #000020; 

Comment, Wachovia Corporation #OL–100017; 

Comment, Wells Fargo & Company #000007.

72Some commenters suggested that the final Rule 

require marketers to use notices that substantially 

conform with the model notices. See, e.g., 

Comment, National Consumers League, et al. #OL–

100011. However, the Commission believes that 

there are sufficient requirements in the Rule to 

make the notices effective, and therefore it is not 

necessary to require that marketers’ notices 

substantially conform with the model notices.

73See, e.g., Comment, Direct Marketing 

Association #OL–100035; Comment, Discover Bank 

#OL–100016; Comment, Juniper Financial Corp. 

#000009; Comment, MasterCard International 

Incorporated #000012; Comment, Visa U.S.A. Inc. 

#000005; Comment, Wells Fargo & Company 

#000007.

74See supra text accompanying notes 48 and 49 

discussing the benefits and drawbacks of 

prescreening that were raised by the commenters.

75See, e.g., Comment, Coalition to Implement the 

FACT Act #OL–100042; Comment, Consumer 

Bankers Association #OL–100028; Comment, 

Wachovia Corporation #OL–100017. The potential 

benefits of prescreening were described above in 

Section III.C.3. In addition, as discussed in the 

NPRM, not all credit card or insurance offers 

consumers receive are prescreened offers. For 

example, some such offers are mass-mailed to 

consumers and do not derive from prescreened 

lists. Therefore, opting out of precreened offers will 

not end all mail solicitations. Finally, as explained 

in the NPRM, the opt-out system operated by the 

nationwide consumer reporting agencies requires a 

Social Security number for verification; including 

the need to provide a Social Security number in the 

notice might alleviate consumers’ concerns about 

revealing this sensitive information.

76The survey found that the tested language used 

to convey these ancillary messages did not 

communicate well to consumers; at the same time, 

it does not appear that the tested language, at least 

under the conditions of the study, detracted from 

the primary message that consumers could choose 

to opt out. See 69 FR 58861, 58864.

77The Commission also notes that appropriate 

additional information might be a website address 

where consumers can obtain additional information 

about prescreening and the opt-out right.

78See, e.g., Comment, Mortgage Bankers 

Association #OL–100036.

therefore they need more time to 

comply with the final Rule in order to 

exhaust existing inventories of 

solicitations and to prepare and 

disseminate new compliant 

solicitations.71 These commenters 

suggested time periods ranging from 90 

days to 1 year after publication of the 

final Rule. After considering the 

comments, the Commission has 

extended the effective date to August 1, 

2005. The Commission believes that this 

time period will provide businesses 

with sufficient time to implement the 

new requirements, while ensuring that 

the benefits to consumers of the 

improved opt-out notice occur as soon 

as reasonably practicable.

E. Appendix A to Part 698: Model 

Prescreen Opt-Out Notices 

In the proposed Rule, the Commission 

set forth model notices, including both 

a short and long portion, in both English 

and Spanish. These notices included 

model language and also illustrated 

proper placement and display of the 

language. 

Several commenters suggested 

changes to the language in the model 

notices, including specifying more 

‘‘neutral’’ language for the short notice, 

adding information to the long notice, 

providing model language for collateral 

requirements, and clarifying that the 

telephone number is for the consumer 

reporting agencies, not the prescreen 

marketer. The Commission agrees that 

some changes to the proposed model 

notices are appropriate, and is making 

the modifications described below. 

Otherwise, the proposed notices are 

retained. 

These model notices adopted in the 

final Rule may be used for purposes of 

complying with the Rule.72

1. Model Language in the Short Notice 

The proposed Rule’s model short 

notice stated, ‘‘To stop receiving 

‘prescreened’ offers of [credit or 

insurance] from this and other 

companies, call toll-free, [toll free 

number]. See OPT-OUT NOTICE on 

other side [or other location] for 

details.’’ According to several 

commenters, this language implies that 

prescreened offers are undesirable and 

encourages consumers to opt-out.73

These commenters requested that the 

Commission revise the model short 

notice to use less negative language.

The Commission has determined to 

revise the short notice language to 

remove any possible negative 

characterization of prescreened 

solicitations. The first sentence of the 

short notice in the final Rule states, 

‘‘You can choose to stop receiving 

‘prescreened’ offers of [credit or 

insurance] from this and other 

companies by calling toll-free [toll-free 

number].’’ The Commission believes 

that this language does not imply a 

recommendation of any course of 

action, but rather simply informs 

consumers of their statutory right. 

In addition, for the same reasons that 

commenters suggested that the long 

notice heading should be modified, the 

Commission has determined that the 

model short notice’s reference to the 

long notice should be modified to reflect 

to totality of the information in the long 

notice. Therefore, the second sentence 

of the model short notice in the final 

Rule states, ‘‘See PRESCREEN & OPTOUT NOTICE on other side [or other 

location] for more information about 

prescreened offers.’’

2. Additional Information in Long 

Notices 

Several commenters suggested that 

the model long notice should contain 

additional information, including 

information about the benefits and 

drawbacks of prescreening,74 that opting 

out will not stop all offers of credit and 

insurance, or that consumers may be 

asked to provide their Social Security 

numbers when exercising the opt-out 

right.75 The Commission believes that 

each of these messages can be useful to 

consumers, and notes that it tested the 

communication of each of these 

messages as part of its consumer 

survey.76

The Commission has considered these 

comments, but has determined not to 

include information beyond that 

required by the statute in the model 

notice. The model notice contains plain 

language statements of the statutorilyrequired information. Rather than single 

out other particular messages for 

inclusion in the model, and thereby 

imply that certain information is 

required or that other information is 

prohibited, the final Rule allows 

companies flexibility to determine what, 

if any, additional information should be 

included (so long as the additional 

information does not interfere with, 

detract from, contradict, or undermine 

the purpose of the opt-out notices).77

3. Collateral Requirement 

The proposed Rule’s model long 

notice contained a plain-language 

summary of the information required by 

section 615(d) of the FCRA to be 

included in prescreened offers. At least 

one commenter noted that, among other 

things, it must be disclosed when a 

prescreened offer is contingent upon the 

consumer providing adequate collateral. 

This commenter stated that the model 

notice did not specifically include this 

information, and requested that the 

Commission revise the model notices to 

include it.78

The Commission has considered this 

argument and agrees that the model long 

notice should contain additional 

language regarding the collateral 

requirement for use by creditors and 

insurers in appropriate circumstances. 

Therefore, the final Rule modifies the 

second sentence of the model long 

notice to state, ‘‘This offer is not 

guaranteed if you do not meet our 

criteria [including providing acceptable 

property as collateral].’’

4. Telephone Number 

Some commenters recommended that 

the Commission make clear in the 

5030 Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 

79See, e.g., Comment, Bank of America 

Corporation #OL–100032; Comment, Mortgage 

Bankers Association #OL–100036.

80This estimate was based on Bureau of Labor 

Statistics data (as of July, 2002), as follows: 2 hours 

of managerial/professional time at $31.55 per hour; 

plus 6 hours of skilled technical labor at $26.44 per 

hour; multiplied by 500 and 750 companies, for a 

total of $110,870 and $166,305, respectively. 81See, e.g., Comment, Bank of America 

Corporation #OL–100032; Comment, JPMorgan 

Chase Bank #OL–100019; Comment, MasterCard 

International Incorporated #000012; Comment, 

Wachovia Corporation #OL–100017; Comment, 

Wells Fargo & Company #000007; Comment, 

Wilmer Cutler Pickering Hale and Dorr LLP #OL–

100046.

82As in the NPRM, the hourly rate is based on 

Bureau of Labor Statistics data, as of July, 2002.

83See, e.g., Comment, Countrywide #000010; 

Comment, JPMorgan Chase Bank #OL–100019; 

Wachovia Corporation #OL–100017.

84See, e.g., Comment, American Bankers 

Association #OL–100040; Comment, Capitol One 

Financial Corporation #OL–100033.

85See, e.g., Comment, Credit Union National 

Association #000003; Comment, National 

Independent Automobile Dealers Association #OL–

100021.

model notice that consumers would be 

calling the consumer reporting agencies 

that operate the toll-free number for 

opting out, and not the creditor or 

insurer, when exercising their opt-out 

right.79

The Commission has considered these 

comments and agrees that language 

should be added to the model long 

notice to clarify that the telephone 

number is that of the consumer 

reporting agencies, not the creditor or 

insurer. Therefore, the final Rule 

modifies the third sentence of the model 

long notice to state, ‘‘If you do not want 

to receive prescreened offers of [credit 

or insurance] from this and other 

companies, call the consumer reporting 

agencies [or name of consumer reporting 

agency] toll free, [toll free number]; or 

write: [consumer reporting agency name 

and address].’’

IV. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act, as amended, 44 U.S.C. 

3501, et seq., the Commission submitted 

the proposed Rule to the Office of 

Management and Budget (‘‘OMB’’) for 

review. The OMB approved the Rule’s 

information collection requirements 

through November 30, 2007, and 

assigned OMB control number 3084–

0132. In response to comments received, 

the Commission has revised its estimate 

of the burden for companies that issue 

many different prescreened solicitations 

and therefore will be required to revise 

multiple solicitations in order to comply 

with the Rule. On December 8, 2004, the 

OMB approved the new burden 

estimate. 

As set forth in the NPRM, the Rule 

imposes certain disclosure requirements 

on makers of prescreened credit 

solicitations, as required by the FACT 

Act. Specifically, such solicitations 

must include a statement containing a 

short-form and a long-form notice, 

which provides consumers with 

information concerning prescreened 

solicitations and how to opt out of 

receiving such solicitations in the 

future. In addition, the Rule contains a 

model disclosure that companies may 

use to comply with the Rule’s 

requirements. 

The NPRM estimated the time to 

revise and re-format an existing 

solicitation to be about 8 hours per firm. 

At the same time, the NPRM estimated 

that between 500 and 750 entities would 

be affected, so that the total annual 

burden to the industry would be 

between 4000 and 6000 hours and the 

estimated total annual cost would be 

between $110,000 and $167,000.80

Numerous commenters stated that the 

NPRM underestimated the costs of 

revising solicitations by failing to 

calculate the additional costs to be 

borne by larger companies that issue 

multiple solicitations.81

At the outset, the Commission notes 

that any new disclosure format, as 

required by the FACT Act’s mandate to 

improve the existing opt-out disclosure, 

requires affected firms to revise their 

prescreened solicitations. Moreover, the 

Commission does not believe that the 

layered notice format of the final Rule 

appreciably increases the burdens on 

affected entities. Nevertheless, the 

Commission recognizes that companies 

that offer multiple solicitations will 

incur added costs to revise these 

notices. Thus, the Commission now 

estimates that the total annual burden to 

the industry will be between 43,600 and 

45,600 hours. This figure reflects the 

Commission’s estimate that 

approximately 100 entities will need 

additional time to revise multiple 

notices as follows: for each of these 100 

entities, an additional four hours each 

for an estimated 99 solicitations not 

accounted for in the NPRM. Based on 

the time needed to bring these 

additional solicitations into compliance, 

the Commission now estimates that the 

total cost to the industry will be 

between $1,157,894 and $1,213,329. 

This figure reflects the 39,600 additional 

hours of skilled technical labor (at 

$26.44 per hour) that the Commission 

estimates will be required to revise the 

multiple solicitations.82

Although some commenters also 

estimated that more time would be 

needed to format and develop a 

disclosure than the eight hours 

estimated by the NPRM,83 or that the 

labor costs to revise each notice would 

be higher than estimated,84 the 

Commission has concluded that it is 

feasible to design a solicitation 

according to its original estimates. 

Nevertheless, in order to permit 

companies to implement such changes 

in a more cost-effective manner, the 

Commission has extended the time to 

comply with the rule to August 1, 2005.

V. Final Regulatory Flexibility Analysis 

The Regulatory Flexibility Act 

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

the Commission provide an Initial 

Regulatory Flexibility Analysis 

(‘‘IRFA’’) with a proposed Rule and a 

Final Regulatory Flexibility Analysis 

(‘‘FRFA’’), with the final Rule, unless 

the Commission certifies that the Rule 

will not have a significant economic 

impact on a substantial number of small 

business entities. 

The Commission hereby certifies that 

the final Rule will not have a significant 

economic impact on a substantial 

number of small business entities. The 

FCRA previously mandated the 

prescreen disclosure. The FACT Act 

requires the Commission to adopt a rule 

to make the required disclosure simple 

and easy to understand. The proposed 

Rule applies to any entity that makes 

prescreened offers of credit or 

insurance. The Commission has been 

unable to determine the number of 

small entities that purchase prescreened 

lists from consumer reporting agencies. 

However, the Commission believes that 

only a small number of small entities 

make prescreened offers. The 

Commission did not receive any 

comments to the IRFA that would allow 

it to determine the precise number of 

small entities that will be affected. 

Although there may be some small 

entities among the entities making 

prescreened offers, the economic impact 

of the final Rule is not likely to be 

significant on a particular entity, nor is 

the final Rule likely to have a significant 

economic impact on a substantial 

number of small entities. The minimal 

impact on creditors and insurers would 

likely consist of revising disclosures 

that they already give in order to make 

the disclosures simple and easy to 

understand. 

The Commission requested comment 

on the IRFA and the proposed Rule’s 

impact on small businesses. The 

Commission received a few comments 

in response. These comments, which are 

discussed in more detail below, 

requested more time to comply with the 

Rule 85 and suggested that the layered 

Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 5031

86See, e.g., Comment, ChoicePoint Precision 

Marketing, Inc. #OL–100025; Comment, Wilmer 

Cutler Pickering Hale and Dorr LLP #OL–100046.

87See, e.g., Comment, Credit Union National 

Association #000003; Comment, National 

Independent Automobile Dealers Association #OL–

100021.

88See, e.g., Comment, ChoicePoint Precision 

Marketing, Inc. #OL–100025; Comment, Wilmer 

Cutler Pickering Hale and Dorr LLP #OL–100046.

89These numbers represent size standards for 

most entities in the industries mentioned above. A 

list of the SBA’s size standards for all industries can 

be found at http://www.sba.gov/size/

indextableofsize.html.

90See, e.g., Comment, ChoicePoint Precision 

Marketing, Inc. #OL–100025; Comment, Wilmer 

Cutler Pickering Hale and Dorr LLP #OL–100046.

notice requirement may be difficult for 

some small businesses.86

The Commission continues to believe 

that a precise estimate of the number of 

small entities that fall under the Rule is 

not currently feasible. However, based 

on the comments received and the 

Commission’s own experience and 

knowledge of industry practices, the 

Commission also continues to believe 

that the cost and burden to small 

business entities of complying with the 

Rule is minimal and that the final Rule 

will not have a significant impact on a 

substantial number of small entities. 

Accordingly, this document serves as 

notice to the Small Business 

Administration of the agency’s 

certification of no effect. Nonetheless, 

the Commission has decided to publish 

a Final Regulatory Flexibility Analysis 

with this final Rule. Therefore, the 

Commission has prepared the following 

analysis: 

A. Need for and Objectives of the Rule 

Section 213 of the FACT Act directs 

the FTC to adopt a rule to improve the 

required notice to consumers regarding 

their right to opt out of prescreened 

solicitations for credit or insurance. In 

this action, the FTC promulgates a final 

Rule that would implement this 

requirement of the FACT Act. The Rule 

is authorized by and based upon section 

213 of the FACT Act. 

B. Significant Issues Received by Public 

Comment 

The Commission received a few 

comments in response to its IRFA. Some 

commenters, in particular, trade 

associations representing small 

businesses, were primarily concerned 

about the time allowed for compliance 

with the Rule. These commenters 

asserted that small businesses, which 

have more limited resources than larger 

marketers, needed more than the 

proposed 60 days to comply with the 

Rule. The commenters suggested an 

effective date ranging from 120 days to 

6 months from the date the final Rule is 

issued.87 The final Rule changes the 

effective date to August 1, 2005. 

Therefore, small businesses, as well as 

other entities, should have sufficient 

time to comply.

Other commenters suggested that the 

layered notice requirement may be 

difficult for some small entities.88 Some 

of these comments noted that small 

entities often have one-page 

solicitations, and that the layered notice 

would likely require them to increase 

the length of their marketing materials, 

at great expense. As an alternative, these 

commenters suggested that a one-part 

notice, rather than the layered notice, 

should be permitted. The Commission 

has considered these comments, but 

does not believe that the layered notice 

requirement is overly burdensome for 

small businesses. The Commission has 

clarified in the statement of basis and 

purpose that accompanies the final Rule 

that both parts of the layered notice may 

appear in a single page solicitation, 

obviating the need for an additional 

page or document. Even on a single page 

solicitation, the layered format 

contributes to a notice that is simple 

and easy to understand. The Rule also 

allows companies flexibility as to the 

precise formatting and language of the 

notices. The Commission considers this 

flexibility sufficient to allow all entities, 

including small entities, to determine an 

appropriate means of complying with 

the Rule within the framework of their 

own solicitations.

C. Small Entities To Which the Rule Will 

Apply 

As described above, the Rule applies 

to any entity, including small entities, 

that makes prescreened offers of credit 

or insurance. The Commission has been 

unable to ascertain a precise estimate of 

the number of small entities that are 

creditors or insurers, and received no 

specific comments to the IRFA that 

allow it to determine the precise 

number of small entities that will be 

affected. Entities potentially covered by 

the Rule include any entity that extends 

credit or insurance, including insurance 

companies, retailers, department stores, 

and banking institutions, if they are 

engaging in prescreened offers of credit. 

For these kinds of entities, the Small 

Business Administration defines small 

business to include, in general, a 

business whose annual receipts do not 

exceed $6 million in total receipts for 

insurance companies and retailers, and 

$23 million in total receipts for 

department stores. For banking 

institutions, the Small Business 

Administration defines small business 

to include entities whose total assets do 

not exceed $150 million.89

However, not all businesses that 

extend credit or insurance are required 

to comply with the Rule. Rather, only 

such entities that make prescreened 

solicitations will be subject to the Rule’s 

requirements. Although the number of 

small businesses that offer credit or 

insurance is large, the Commission 

believes that only a small number of 

those businesses engage in prescreened 

solicitations. The Commission believes 

that many small businesses find it more 

cost effective to engage in other forms of 

solicitation, including point-of-sale 

solicitations and/or solicitations of 

existing customers. 

D. Projected Reporting, Recordkeeping, 

and Other Compliance Requirements 

Under the final Rule, any entity 

making a prescreened offer of credit or 

insurance will be required to provide 

recipients of the offer with a disclosure 

regarding their right to opt out of such 

offers. (There are no filing or 

recordkeeping requirements in the 

Rule.) These disclosures are to be in a 

form that is simple and easy to 

understand. As noted in the Paperwork 

Reduction Act analysis above, the 

estimated time to revise the notice and 

re-format solicitations is approximately 

8 hours (one business day), and the total 

cost for all entities to comply with this 

Rule is between $1,157,894 and 

$1,213,329. 

E. Steps Taken To Minimize Significant 

Economic Impact of the Rule on Small 

Entities 

The Commission considered whether 

any significant alternatives, consistent 

with the purposes of the FACT Act, 

could further minimize the Rule’s 

impact on small entities. The FTC asked 

for comment on this issue. Some 

commenters suggested that the layered 

notice requirement may be difficult for 

small businesses, and that a single 

notice would be more appropriate.90

However, as discussed above, the 

Commission has determined that the 

layered format is the best way to ensure 

that the disclosures are simple and easy 

to understand and does not find that the 

layered notice approach poses a 

particular burden to small entities. The 

Rule allows small entities flexibility in 

determining how best to present the 

layered notice within the framework of 

their solicitations, and therefore does 

not impose a substantial burden.

The Commission also requested 

comment on the need to adopt a delayed 

5032 Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 

91See, e.g., Comment, Credit Union National 

Association #000003; Comment, National 

Independent Automobile Dealers Association #OL–

100021.

effective date for small entities in order 

to provide them with additional time to 

come into compliance. The Commission 

received some comments on this 

issue;91 the Commission has decided to 

extend the effective date for all entities 

subject to the Rule to August 1, 2005. 

This additional time will allow small 

entities to assess their compliance 

obligations and make cost-sensitive 

decisions concerning how best to 

comply with the Rule.

VI. Final Rule

List of Subjects 

16 CFR Part 642 

Consumer reporting agencies, 

Consumer reports, Credit, Fair Credit 

Reporting Act, Trade practices. 

16 CFR Part 698 

Consumer reporting agencies, 

Consumer reports, Credit, Fair Credit 

Reporting Act, Trade practices.

■ The Federal Trade Commission 

amends chapter I, title 16, Code of 

Federal Regulations, as follows:

■ 1. Add new part 642 to read as follows:

PART 642—PRESCREEN OPT-OUT 

NOTICE

Sec. 

642.1 Purpose and scope. 

642.2 Definitions. 

642.3 Prescreen opt-out notice. 

642.4 Effective date.

Authority: Pub. L. 108–159, sec. 213(a); 15 

U.S.C. 1681m(d).

§ 642.1 Purpose and scope. 

(a) Purpose. This part implements 

section 213(a) of the Fair and Accurate 

Credit Transactions Act of 2003, which 

requires the Federal Trade Commission 

to establish the format, type size, and 

manner of the notices to consumers, 

required by section 615(d) of the Fair 

Credit Reporting Act (‘‘FCRA’’), 

regarding the right to prohibit (‘‘opt out’’

of) the use of information in a consumer 

report to send them solicitations of 

credit or insurance. 

(b) Scope. This part applies to any 

person who uses a consumer report on 

any consumer in connection with any 

credit or insurance transaction that is 

not initiated by the consumer, and that 

is provided to that person under section 

604(c)(1)(B) of the FCRA (15 U.S.C. 

1681b(c)(1)(B)).

§ 642.2 Definitions. 

As used in this part: 

(a) Simple and easy to understand

means: 

(1) A layered format as described in 

§ 642.3 of this part; 

(2) Plain language designed to be 

understood by ordinary consumers; and 

(3) Use of clear and concise sentences, 

paragraphs, and sections. 

(i) Examples. For purposes of this 

part, examples of factors to be 

considered in determining whether a 

statement is in plain language and uses 

clear and concise sentences, paragraphs, 

and sections include: 

(A) Use of short explanatory 

sentences; 

(B) Use of definite, concrete, everyday 

words; 

(C) Use of active voice; 

(D) Avoidance of multiple negatives; 

(E) Avoidance of legal and technical 

business terminology; 

(F) Avoidance of explanations that are 

imprecise and reasonably subject to 

different interpretations; and 

(G) Use of language that is not 

misleading. 

(ii) [Reserved] 

(b) Principal promotional document

means the document designed to be 

seen first by the consumer, such as the 

cover letter.

§ 642.3 Prescreen opt-out notice. 

Any person who uses a consumer 

report on any consumer in connection 

with any credit or insurance transaction 

that is not initiated by the consumer, 

and that is provided to that person 

under section 604(c)(1)(B) of the FCRA 

(15 U.S.C. 1681b(c)(1)(B)), shall, with 

each written solicitation made to the 

consumer about the transaction, provide 

the consumer with the following 

statement, consisting of a short portion 

and a long portion, which shall be in the 

same language as the offer of credit or 

insurance: 

(a) Short notice. The short notice shall 

be a clear and conspicuous, and simple 

and easy to understand statement as 

follows: 

(1) Content. The short notice shall 

state that the consumer has the right to 

opt out of receiving prescreened 

solicitations, and shall provide the tollfree number the consumer can call to 

exercise that right. The short notice also 

shall direct the consumer to the 

existence and location of the long 

notice, and shall state the heading for 

the long notice. The short notice shall 

not contain any other information. 

(2) Form. The short notice shall be: 

(i) In a type size that is larger than the 

type size of the principal text on the 

same page, but in no event smaller than 

12-point type, or if provided by 

electronic means, then reasonable steps 

shall be taken to ensure that the type 

size is larger than the type size of the 

principal text on the same page; 

(ii) On the front side of the first page 

of the principal promotional document 

in the solicitation, or, if provided 

electronically, on the same page and in 

close proximity to the principal 

marketing message; 

(iii) Located on the page and in a 

format so that the statement is distinct 

from other text, such as inside a border; 

and 

(iv) In a type style that is distinct from 

the principal type style used on the 

same page, such as bolded, italicized, 

underlined, and/or in a color that 

contrasts with the color of the principal 

text on the page, if the solicitation is in 

more than one color. 

(b) Long notice. The long notice shall 

be a clear and conspicuous, and simple 

and easy to understand statement as 

follows: 

(1) Content. The long notice shall 

state the information required by section 

615(d) of the Fair Credit Reporting Act 

(15 U.S.C. 1681m(d)). The long notice 

shall not include any other information 

that interferes with, detracts from, 

contradicts, or otherwise undermines 

the purpose of the notice. 

(2) Form. The long notice shall: 

(i) Appear in the solicitation; 

(ii) Be in a type size that is no smaller 

than the type size of the principal text 

on the same page, and, for solicitations 

provided other than by electronic 

means, the type size shall in no event 

be smaller than 8-point type; 

(iii) Begin with a heading in capital 

letters and underlined, and identifying 

the long notice as the ‘‘PRESCREEN & 

OPT-OUT NOTICE’’; 

(iv) Be in a type style that is distinct 

from the principal type style used on 

the same page, such as bolded, 

italicized, underlined, and/or in a color 

that contrasts with the color of the 

principal text on the page, if the 

solicitation is in more than one color; 

and 

(v) Be set apart from other text on the 

page, such as by including a blank line 

above and below the statement, and by 

indenting both the left and right margins 

from other text on the page.

§ 642.4 Effective date. 

This part is effective on August 1, 

2005.

PART 698—[AMENDED]

■ 2. Amend § 698.1 by revising 

paragraph (b) to read as follows:

§ 698.1 Authority and purpose.

* * * * *

Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 5033

(b) Purpose. The purpose of this part 

is to comply with sections 607(d), 

609(c), 609(d), 612(a), and 615(d) of the 

Fair Credit Reporting Act, as amended 

by the Fair and Accurate Credit 

Transactions Act of 2003, and Section 

211 of the Fair and Accurate Credit 

Transactions Act of 2003.

■ 3. Add Appendix A to Part 698 as 

follows:

Appendix A to Part 698—Model 

Prescreen Opt-Out Notices 

In order to comply with part 642 of this 

title, the following model notices may be 

used:

BILLING CODE 6750–01–P

5034 Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 

(a) English language model notice. (1) 

Short notice.


ER31JA05.028</GPH><FNP>
Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 5035

(2) Long notice.


ER31JA05.029</GPH><FNP>
5036 Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 

(b) Spanish language model notice.

(1) Short notice.


ER31JA05.030</GPH><FNP>
Federal Register / Vol. 70, No. 19 / Monday, January 31, 2005 / Rules and Regulations 5037

(2) Long notice.

By direction of the Commission. 

Donald S. Clark, 

Secretary.

[FR Doc. 05–1678 Filed 1–28–05; 8:45 am] 

BILLING CODE 6750–01–C


ER31JA05.031</GPH>