Informes del proceso de recopilación de información

A user of a prescreening list has to provide to consumers notice concerning the use of their credit report and the choice to opt-out of the list in a clear and conspicuous manner.1120The notice must contain the followings:

- Information contained in the consumer's report was used in connection with the transaction;1121

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15 U.S.C. § 1681s-2(a)(7)(E); NATIONAL CONSUMER LAW CENTER, supra note 17, at 351. A commentator believe that permitting providing the notice without obligating the furnisher to furnish the negative information is an unsual mean of providing notice. She believes that notice to be inaccurate.

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15 U.S.C. § 1681s-2(a)(7)(B)(ii). (Provides “After providing such notice, the financial institution may submit additional negative information to a consumer reporting agency described in section 603(p) with respect to the same transaction, extension of credit, account, or customer without providing additional notice to the customer.” 1116 15 U.S.C. § 1681s-2(a)(7)(B)(i). 1117 15 U.S.C. § 1681s-2(a)(7)(C)(i)-(ii). 1118

15 U.S.C. § 1681s-2(c)(1) (Provides, “sections 616 and 617 do not apply to any violation of subsection (a) of this section, including any regulations issued thereunder”).

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CIL Implementing Regulation, article 40. 1120

15 U.S.C. § 1681m(d) (Provides, “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, that is provided to that person under section § 1681b, shall provide with each written solicitation made to the consumer regarding the transaction a clear and conspicuous statement …”).

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- The consumer received the offer of credit or insurance because the consumer satisfied the criteria for creditworthiness or insurability under which the consumer was selected for the offer;1122

- 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 creditworthiness or insurability or does not furnish any required collateral;1123

- The consumer has a right to prohibit information contained in the consumer's file with any CRA from being used in connection with any credit or insurance transaction that is not initiated by the consumer; and1124

- The consumer may exercise the right of opt-out by notifying the notification system of CRAs.1125

Clarity and conspicuousness are not defined in the FCRA, thus they are a matter of law that is left to the court to determine. For instance, a court held a statement containing the foregoing information in the back of the solicitation was clear and conspicuous because it was the only text on the back.1126 In contrast, another court held a notice in a small size font that cannot be read with naked eyes and is mixed with other statements that were not clear and conspicuous.1127 The FCRA regulations provide guidance as to what constitutes clear and conspicuous.1128

The enforcement of a private right has the same issues that all provisions of section 1681m have. Therefore, the possibility of recovery depends on the court’s interpretation of 1681m(h)(8)(A).1129

However, choosing the interpretation of 1681m(h)(8)(A) that limiting liability refers only to the section 1681m(h), means that failure to provide notice of prescreening or failure to provide it in a clear and conspicuous manner gives rise to liability.

After the consumer receives notice, the consumer may choose to opt-out of the prescreening list. The consumer may choose to opt-out even without receiving such notice. If

1122 15 U.S.C. § 1681m(d)(1)(B). 1123 15 U.S.C. § 1681m(d)(1)(C). 1124 15 U.S.C. § 1681m(d)(1)(D). 1125 15 U.S.C. § 1681m(d)(1)(E). 1126

Schwartz v. Goal Fin. LLC, 485 F. Supp. 2d 170, 179 (E.D.N.Y. 2007) (The court held, “The text of the disclosure statement, while smaller than that used on the front-side of the solicitation, is not disproportionately small compared to the surrounding text because it is the only text found on that page. Moreover, the text on the front-side, which signals to the reader that the disclosure statement is on the reverse side, is set-off in one of the three boxes on the page, uses the same size font as that found on the rest of the page, and capitalizes the words “prescreen” and “opt-out notice.”).

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Cole v. U.S. Capital, 389 F.3d 719, 731 (7th Cir. 2004) (The court held, “The notice does nothing to draw the reader's attention to this material to the contrary, the flyer appears to be designed to ensure minimal attention by the reader. Consequently, we must conclude that the district court erred in holding that the defendants' disclosures were clear and conspicuous as a matter of law; indeed, the opposite appears to be the case.”).

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16 C.F.R. § 642.2(a). The notice should use: plain language, clear and concise, short sentence, definite concrete everydays words, avoidance of multiple negatives, avoidance of legal and business terms, avoidance of explaniations that are subject to different interpretations, and avoidance of misleading langauge. 16 C.F.R. § 642.3(a)(2)(i) In addition, the regulations specify the font size to be larger than the other statement but no smaller than 12 points.16 C.F.R. § 642.3(b)(2)(ii) The type style must be distinct from oher styles such as bolding, coloring, underlining, or italicizing. 16 C.F.R. § 642.3(b)(2)(iii) The notice must be located to be the first thing seen by the consumer such as the cover letter. 16 C.F.R. § 642.3(b)(2)(v) The notice must be set apart from other text. 16 C.F.R. § 642.3(b)(2)(iii) The notice must start with heading “PRESCREEN & OPT- OUT NOTICE”.

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the consumer chooses to opt-out, the CRA must provide to the consumer written notice to complete the opt-out process. This notice should be provided no later than five business days after receipt of the notification.1130 A CRA violates the FCRA if it does not provide the notice at all, or if it provides late notice.

A Comparative Assessment

Under the CIL, the prescreening list is not recognized. In addition, no credit report can be procured without the consumer’s consent. If the consumer consents, there is no need to provide the consumer with a notice to opt-out. Nevertheless, I believe that prescreening practice is mostly in the interest of consumers. Consumers sometimes underestimate their creditworthiness, therefore, when they are included in a prescreening list, they become aware that they have the potential to obtain credit. A prescreening purpose should be added to the CIL along with a notice requirement.

I. Notice of Affiliate Sharing for Marketing

An affiliate that received information about consumer from a user cannot use the information for marketing and solicitation purposes unless the user1131 who supplies the information provides notice to the consumer. The FCRA excludes groups of users from this notice requirement as follows:

- Using information to make a solicitation for marketing purposes to a consumer with whom the person has a pre-existing business relationship;1132

- Using information to facilitate communications to an individual for whose benefit the person provides employee benefits or other services pursuant to a contract with an employer related to and arising out of the current employment relationship or status of the individual as a participant or beneficiary of an employee benefit plan;1133

- Using information to perform services on behalf of another person related by common ownership or affiliated by corporate control;1134

- Using information in response to a communication initiated by the consumer;1135 - Using information in response to solicitations authorized or requested by the

consumer; 1136or

- If compliance with this section by that person would prevent compliance by that person with any provision of State insurance laws pertaining to unfair discrimination in any State in which the person is lawfully doing business.1137

The notice1138 must be clear and conspicuous, disclosing to the consumer the information may be communicated among such persons for purposes of making such

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15 U.S.C. § 1681b(e)(3)(B). 1131

NATIONAL CONSUMER LAW CENTER, supra note 17, at 360. A commentator names it “donor affiliate”. 1132 _{15 U.S.C. § 1681s-3(a)(4)(A). Preexisting relationship is defined to include: finacial contract, purchase,} rental, or lease during the 18 months period preceeding the date of solicitation. It covers too any inquiry or application made by the consumer regarding product or service during the 3 months period preceeding the date of solicitation. 15 U.S.C. § 1681s-3(d)(1). 1133 15 U.S.C. § 1681s-3(a)(4)(B). 1134 15 U.S.C. § 1681s-3(a)(4)(D). 1135 15 U.S.C. § 1681s-3(a)(4)(E). 1136 15 U.S.C. § 1681s-3(a)(4)(F). 1137 15 U.S.C. § 1681s-3(a)(4). 1138

The notice must disclose the following: the name of affiliate, affiliates eligible to receive information, type of information may be used, a statement that the consumer may choose to opt-out, and a statement disclosing that the opt-out period is five years subject to renewal. 16 C.F.R. § 680.23(a)(1)(i)-(v).

solicitations to the consumer. 1139 An opportunity and a simple method to prohibit the solicitations are provided to the consumer.1140 Opting-out is valid for five years only1141and upon the expiration of the period, the affiliate cannot use the information for marketing purpose unless it sends the same notice again.1142 Delivery of the notice can be through any reasonable means because the FCRA does not specify any particular means.

An affiliate violates the FCRA when it uses information that is provided by another affiliate without providing to the consumer the required notice. The affiliate violates the FCRA when the notice is provided to the consumer in an unreasonable manner. For instance, publishing the notice in a newspaper or posting it in the affiliate website is unreasonable.1143 Moreover, the affiliate violates the FCRA if the notice is provided, but the method to opt-out is unreasonable. For example, requiring the consumer to write his own letter requesting opt- out or requiring him to call to obtain a form to opt-out is unreasonable.1144

A Comparative Assessment

Under the CIL, affiliate sharing is not recognized at all. I believe affiliate provisions in general should be added to the CIL. Specifically, affiliate sharing for marketing purposes should be governed by the CIL, as a flourishing practice.