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The FCRA and the “fourth bureau”

July 22, 2011

The Washington Post had an interesting article this week about what it calls “the fourth bureau” – which consists of all of the consumer reporting agencies not named Experian, Equifax, and Trans Union.  The gist of the article is that consumers are now, by and large, savvy enough to know that their credit will be checked before they attempt to finance a purchase, and to know that Experian, Equifax, and Trans Union will be the three bureaus doing the checking.

The article suggests, persuasively, that most consumers are not yet savvy enough to know that credit and other background information (e.g., criminal records) will be checked in a number of contexts outside of the financial world:  by employers, landlords, insurance companies, et cetera.  And these checks are typically not performed by the three bureaus, but instead by some “fourth bureau” that is not yet a household name.

Having represented some of these “fourth bureaus,” I think the article is accurate as far as it goes.  But there’s a tone of suspicion that, in my experience, isn’t justified:  the article focuses on the rare consumer who was harmed by an allegedly inaccurate “fourth bureau” report to an employer, and pays less heed to the benefits that such reports provide to typical consumers and typical employers, landlords, and insurers.

It’s worth noting that the article doesn’t suggest that the “fourth bureau” phenomenon requires any changes to the FCRA.  To the contrary, when discussing whether the standard disclosure that any bureau – first, fourth, or otherwise – is required to send to a consumer who might be adversely affected by a report, the article notes that “even consumer advocates do not agree on one standard” disclosure.

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Categories: Uncategorized
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