[Federal Register Volume 59, Number 54 (Monday, March 21, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-6538]


[[Page Unknown]]

[Federal Register: March 21, 1994]


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FEDERAL TRADE COMMISSION
[Dkt. 9258]

 

W.D.I.A. Corporation, et al.; Proposed Consent Agreement With 
Analysis To Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violations of federal law prohibiting 
unfair acts and practices and unfair methods of competition, this 
consent agreement, accepted subject to final Commission approval, would 
prohibit, among other things, an Ohio based information corporation and 
two of its officers from furnishing any consumer report for any 
purposes not permitted under the Fair Credit Reporting Act, and would 
require the respondents to take certain steps to ensure subscribers 
have permissible purposes for accessing consumer reports in the future. 
In addition, the respondents would be required to maintain a toll-free 
telephone number available to consumers who have questions regarding 
the purpose for which a consumer report on them was furnished.

DATES: Comments must be received on or before May 20, 1994.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
room 159, 6th St. and Pa. Ave., NW., Washington, DC 20580.

FOR FURTHER INFORMATION CONTACT: Ronald Isaac or David Grimes, Jr., 
FTC/S-4429, Washington, DC 20580. (202) 326-3231 or 326-3171.

SUPPLEMENTARY INFORMATION: Pursuant to section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Sec. 3.25(f) of 
the Commission's Rules of Practice (16 CFR 3.25(f)), notice is hereby 
given that the following consent agreement containing a consent order 
to cease and desist, having been field with and accepted, subject to 
final approval, by the Commission, has been placed on the public record 
for a period of sixty (60) days. Public comment is invited. Such 
comments or views will be considered by the Commission and will be 
available for inspection and copying at its principal office in 
accordance with Sec. 4.9(b)(6)(ii) of the Commission's Rules of 
Practice (16 CFR 4.9(b)(6)(ii)).
    W.D.I.A. Corporation, a corporation, and Mark W. Hanna, and 
Janice L. Campanello, individually and as officers of said 
corporation

Agreement Containing Consent Order To Cease and Desist

[Docket No. 9258]
    The agreement herein, by and between W.D.I.A. Corporation, a 
corporation, by its duly authorized officer, and Mark W. Hanna and 
Janice L. Campanello, individually and as officers of said corporation, 
hereinafter sometimes referred to as respondents, and their attorney, 
and counsel for the Federal Trade Commission, is entered into in 
accordance with the Commission's Rule governing consent order 
procedures. In accordance therewith the parties hereby agree that:
    1. Respondent W.D.I.A. Corporation, is a corporation organized, 
existing, and doing business under and by virtue of the laws of the 
State of Ohio, with its office and principal place of business located 
at 7721 Hamilton Avenue, in the City of Cincinnati, State of Ohio 
45321.
    Respondents Mark W. Hanna and Janice L. Campanello are officers of 
said corporation. They formulate, direct and control the policies, acts 
and practices of said corporation, and their business address is the 
same as that of said corporation.
    2. Respondents have been served with a copy of the complaint issued 
by the Federal Trade Commission charging them with violations of 
sections 604, 607(a), and 613 of the Fair Credit Reporting Act and 
section 5(a) of the Federal Trade Commission Act, and have filed 
answers to said complaint denying said charges.
    3. Respondents admit all the jurisdictional facts set forth in the 
Commission's complaint in this proceeding.
    4. Respondents waive:
    (a) Any further procedural steps;
    (b) The requirement that the Commission's decision contain a 
statement of findings of fact and conclusions of the law;
    (c) All rights to seek judicial review or otherwise to challenge or 
contest the validity of the order entered pursuant to this agreement; 
and
    (d) any claim under the Equal Access to Justice Act.
    5. This agreement shall not become a part of the public record of 
the proceeding unless and until it is accepted by the Commission. If 
the agreement is accepted by the Commission it will be placed on the 
public record for a period of sixty (60) days and information in 
respect thereto publicly released. The Commission thereafter may either 
withdraw its acceptance of this agreement and so notify the 
respondents, in which event it will take such action as it may consider 
appropriate, or issue and serve its decision, in disposition of the 
proceeding.
    6. This agreement is for settlement purposes only and does not 
constitute an admission by respondents that the law has been violated 
as alleged in the draft of complaint here attached, or that the facts 
are alleged in the draft complaint, other than jurisdictional facts, 
are true.
    7. This agreement contemplates that, if it is accepted by the 
Commission, and if such acceptance is not subsequently withdrawn by the 
Commission pursuant to the provisions of Sec. 3.25(f) of the 
Commission's Rules, the Commission may without further notice to 
respondents, (1) issue its decision containing the following order to 
cease and desist in disposition of the proceeding, and (2) make 
information public in respect thereto. When so entered, the order to 
cease and desist shall have the same force and effect and may be 
altered, modified or set aside in the same manner and within the same 
time provided by statute for other orders. The order shall become final 
upon service. Delivery by the U.S. Postal Service of the decision 
containing the agreed-to order to respondents' address as stated in 
this agreement shall constitute service. Respondents waive any right 
they might have to any other manner of service. The complaint may be 
used in construing the terms of the order, and no agreement, 
understanding, representation, or interpretation not contained in the 
order or in the agreement may be used to vary or to contradict the 
terms of the order.
    8. Respondents have read the complaint and the order contemplated 
hereby. They understand that once the order has been issued, they will 
be required to file one or more compliance reports showing that they 
have fully complied with the order. Respondents further understand that 
they may be liable for civil penalties in the amount provided by law 
for each violation of the order after it becomes final.

Order

    For the purpose of this Order, the following definitions apply:
    ``Person,'' ``consumer,'' ``consumer report,'' ``consumer reporting 
agency,'' and ``employment purposes'' are defined as set forth in 
section 603(b), (c), (d), (f), and (h), respectively, of the Fair 
Credit Reporting Act (``FCRA''), 15 U.S.C. 1681a(b), 1681a(c), 1681(d), 
1681a(f), and 1681a(h);
    ``Subscriber'' means any person who is approved for or obtains a 
consumer report from respondents;
    ``Mixed-use subscriber'' means a subscriber who in the ordinary 
course of business typically has both permissible and impermissible 
purposes for ordering consumer reports; and
    ``Permissible purpose'' means any of the purposes listed in section 
604 of the FCRA, 15 U.S.C. 1681b, or as it might be amended in the 
future, for which a consumer reporting agency may lawfully furnish a 
consumer report.

I

    It is ordered that respondents, W.D.I.A. Corporation, a 
corporation, its successors and assigns, and its officers, and Mark W. 
Hanna and Janice L. Campanello, individually and as officers of said 
corporation, and respondents' agents, representatives, and employees, 
directly or through any corporation, subsidiary, division, or other 
device, in connection with the furnishing of any consumer report, do 
forthwith cease and desist from:
    1. Furnishing any consumer report under any circumstances not 
permitted by Section 604 of the FCRA.
    2. Failing to maintain reasonable procedures designed to limit the 
furnishing of consumer reports to the purposes listed under section 604 
of the FCRA, as required by section 607(a) of the FCRA. Such procedures 
shall include but not be limited to respondents doing or continuing to 
do the following:
    a. With respect to prospective subscribers, before furnishing a 
consumer report to any such subscriber, and with respect to current 
mixed-use subscribers, no later than six months after the date of this 
Order: (i) Obtaining from each subscriber an initial written 
certification stating the nature of the subscriber's business and all 
purposes for which the subscriber plans to obtain consumer reports from 
respondents. Each certification under this provision must be dated and 
signed, must bear the printed or typed name of the person signing it, 
and must state that the person signing it has direct knowledge of the 
facts certified and supervisory responsibility for obtaining consumer 
reports from respondents.
    (ii) Determining, based on the information in the subscriber's 
written certification, and any other factors of which respondents are 
aware or, under the circumstances, should reasonably ascertain, that 
each subscriber has a permissible purpose under section 604 for the 
types of reports the subscriber plans to obtain. Respondents shall 
create and maintain a record of the basis for this determination.
    (iii) Verifying (1) the business identity of the subscriber; (2) 
that the subscriber is engaged in the business certified and has a 
permissible purpose for obtaining consumer reports; and (3) with 
respect to prospective subscribers, that the subscriber maintains 
reasonable procedures designed to prevent access to consumer reports by 
unauthorized persons. Respondents shall conduct an on-site visual 
inspection of the business premises of each subscriber that respondents 
have not otherwise verified (e.g., through a previous on-site visual 
inspection of the business premises or through business directories, 
state or local regulatory authorities, or other reliable sources) to be 
a legitimate business having a ``permissible purpose'' for the 
information reported.
    (iv) Providing each subscriber a summary of the permissible 
purposes for obtaining consumer reports under section 604 of the FCRA 
that is substantially identical to the summary attached to this Order 
as exhibit A.
    (v) Informing each subscriber in writing that the FCRA imposes 
criminal penalties up to $5,000 and a year in prison against anyone who 
knowingly and willfully obtains information on a consumer from a 
consumer reporting agency under false pretenses.
    b. With respect to both current and prospective subscribers: (1) 
Requiring, any time a subscriber requests a consumer report for 
employment purposes pursuant to section 604(3)(B) of the FCRA, that the 
subscriber identify and certify that purpose, unless the subscriber has 
previously certified that purpose to respondents as the only purpose 
for which it requests consumer reports.
    (ii) Requiring, any time a subscriber requests a consumer report 
for a ``legitimate business need'' pursuant to section 604(3)(E) of the 
FCRA, that the subscriber identify and certify that business need. Such 
identification must be made in specific terms. Provided however, that a 
landlord requesting a consumer report in connection with rental of an 
apartment need not certify each request for a consumer report if the 
landlord has previously certified that it will obtain consumer reports 
solely for that purpose.
    (iii) Requiring each mixed-use subscriber to identify and certify 
the applicable purpose(s) each time it requests a consumer report. For 
example, to identify the specific credit purpose for requesting a 
report under section 604(3)(A) of the FCRA, it would suffice for an 
attorney subscriber collecting a debt for a client to specify that as 
his or her purpose.
    (iv) Disclosing the following message, or one substantially 
identical to it, on the computer screen each time a subscriber 
transmits requests by computer for consumer reports: ``The Federal Fair 
Credit Reporting Act imposes criminal penalties up to $5,000 and a year 
in prison against anyone who knowingly and willfully obtains 
information on a consumer from a consumer reporting agency under false 
pretenses.''
    (v) Verifying that each mixed-use subscriber is using consumer 
reports solely for permissible purposes by sending a letter by first 
class mail, postage prepaid, to each consumer on whom a consumer report 
is furnished to a mixed-use subscriber, no later than three (3) 
business days after furnishing the consumer report. Respondents shall 
send the letter to the consumer's current address in an envelope 
bearing respondents' company name and its return mailing address, and 
stating ``PLEASE FORWARD''. The letter shall disclosure the following 
information in a form substantially similar to exhibit B: (1) That 
respondents have furnished a consumer report on the consumer to the 
person identified by the name and address stated in the letter;
    (2) The identity of the end user of the report (i.e., the person on 
whose behalf the subscriber obtained the report) if known and if 
different from the person to whom respondents furnished the consumer 
report;
    (3) The purpose identified for requesting the consumer report; and
    (4) That should the consumer have questions concerning the purpose 
for which the consumer report was furnished, the consumer may call 
respondents at the toll-free (``800'') telephone number stated in the 
letter or may write to respondents at the address stated in the letter.
    (vi) Maintaining a toll-free telephone number available for 
consumers to call at least six hours each business day, during times to 
be stated in the letter required by subparagraph I.2.b.(v). Calls to 
that number shall be answered by an employee of respondents or by a 
recording. If a recording is used, within 10 seconds after it begins, 
it shall clearly instruct the consumer what to do if calling about the 
purpose for which the consumer's consumer report was furnished. 
Consumers who indicate they are calling about the purpose for which 
their consumer report was furnished shall be promptly referred to an 
employee of respondents, if available. If no employee is available, the 
recorded message shall clearly instruct the consumer to leave a message 
stating the consumer's name and telephone number, and the consumer's 
comments or questions about the purpose for which the consumer report 
was furnished. The recording tape shall allow at least one minute for 
the consumer to record a message.
    (vii) Returning promptly and in good faith all telephone calls from 
consumers inquiring about the purpose for which their consumer report 
was furnished, making at least two attempts to reach the consumer. If a 
consumer does not answer when called, respondents shall leave a 
message, if possible, including a name and telephone number for the 
consumer to call to speak to an individual at respondents' office. When 
responding to these consumers' calls, respondents shall elicit and 
record information from the consumers bearing on whether any subscriber 
may have obtained a consumer report for a purpose not permitted under 
section 604 of the FCRA or for a purpose different from that identified 
by the subscriber at the time the report was obtained. Respondents 
shall train their employees to comply with the procedures set forth in 
this subparagraph.
    (viii) Requiring each subscriber to provide on an annual basis 
certification updating the information previously provided on the 
nature of the subscriber's business and all purposes for which the 
subscriber plans to obtain consumer reports from respondents, and also 
requiring the subscriber to explain the reasons for any change in the 
stated purposes for obtaining consumer reports. The certification for 
each subscriber shall be obtained either in writing and be dated and 
signed and bear the printed or typed name of the person signing it, or 
it shall be obtained by computer. If the certification is obtained by 
computer, the person executing it must enter on the computer screen the 
information described above, and the person's name, direct dial office 
telephone number, and occupational title. The computer certification 
request may appear in a form substantially similar to exhibit C.
    (ix) Terminating access to any consumer report as to any subscriber 
who: (1) Respondents learn, through the procedures described in 
subparagraphs I.2.b.(v), (vi) and (vii), or otherwise, has obtained, 
after the effective date of this order, a consumer report for any 
purpose other than a permissible purpose, unless that subscriber 
obtained such report through inadvertent error--i.e., a mechanical, 
electronic, or clerical error that the subscriber demonstrates was 
unintentional and occurred notwithstanding the maintenance of 
procedures reasonably designed to avoid such errors; or
    (2) respondents have reasonable grounds to believe will not use the 
report solely for permissible purposes.
    3. Furnishing any consumer report for employment purposes that 
contains public record information on a consumer that is likely to have 
an adverse effect upon the consumer's ability to obtain employment 
without notifying the consumer, at the time such report is furnished, 
that public record information concerning the consumer is being 
reported, and providing the name and address of the person to whom such 
report is being furnished, as provided in section 613(1) of the FCRA. 
The notice may be provided to the consumer in a form substantially 
similar to exhibit D. Respondents are not required to provided this 
notification if they have either (1) received written confirmation 
directly or indirectly from the consumer reporting agency that supplied 
the consumer report that the agency provides such notification to the 
consumer and they have notified that agency that the report is being 
provided for employment purposes, or (2) received written confirmation 
from the consumer reporting agency that it maintains strict procedures 
designed to insure that such public record information is complete and 
up to date, as provided in section 613(2) of the FCRA.
    It is further ordered that respondents, and their successors and 
assigns, shall maintain for five (5) years and upon request make 
available to the Federal Trade Commission for inspection and copying, 
documents demonstrating compliance with the requirements of this Order. 
Such documents shall include, but are not limited to, all subscriber 
applications and certifications, all reports prepared in connection 
with on-site investigations of subscribers' businesses, all written 
records of respondents' determinations that its subscribers have 
permissible purposes for obtaining consumer reports, documents 
reflecting respondents' mailing of letters notifying consumers when 
consumer reports on them are furnished and all documents pertaining to 
respondents' receipt and treatment of consumers' written and oral 
responses to those letters, and all instructions given to employees 
regarding compliance with the provisions of this Order.

III

    It is further ordered that respondents, and their successors and 
assigns, shall deliver a copy of this Order, or a synopsis therefore 
approved by the Federal Trade Commission, to all present and future 
personnel, agents, or representatives having sales, advertising, or 
policy responsibilities with respect to the subject matter of this 
order.

IV

    It is further ordered that respondents shall notify the Federal 
Trade Commission at least thirty (30) days prior to any proposed change 
in the corporate respondent such as dissolution, assignment, or sale 
resulting in the emergence of a successor corporation, the creation or 
dissolution of subsidiaries, or any other change in the corporation 
that might affect compliance obligations arising out of the order.

V

    It is further ordered that each individual respondent named herein 
promptly notify the Federal Trade Commission of the discontinuance of 
his or her present business or employment and of his or her affiliation 
with a new business or employment. In addition, for a period of ten 
(10) years from the date of service of this order, the respondent shall 
promptly notify the Commission of each affiliation with a new business 
or employment whose activities include assembling or evaluating 
information on consumers or furnishing consumer reports or access to 
consumer reports to third parties, or of his or her affiliation with a 
new business or employment in which his or her own duties and 
responsibilities involve such activities. Such notice shall include the 
respondent's new business address and a statement of the nature of the 
business or employment in which the respondent is newly engaged as well 
as a description of his or her duties and responsibilities in 
connection with the business or employment. The expiration of the 
notice provision of this paragraph shall not affect any other 
obligation arising under this Order.

VI

    It is further ordered that respondents shall, within sixty (60) 
days of service of this Order upon them, file with the Federal Trade 
Commission a report, in writing, setting forth in detail the manner and 
form in which they have complied with this order.

Exhibit A to the Order

Important Notice for Subscribers

    The federal Fair Credit Reporting Act permits consumer reporting 
agencies to provide consumer reports only for certain purposes. Any 
subscriber who uses false pretenses to obtain a consumer report may 
be the subject of criminal prosecution. It is also a law violation 
for us to give you a consumer report unless your purpose for 
obtaining it is permissible under the Act. This means that you must 
always tell us the true reason for requesting a consumer report. If 
the reason is not a permissible one under the Act, we are required 
by law to deny your request. Listed below are the only purposes that 
Section 604 of the Act permits.
    (1): Pursuant to court order, or a subpoena issued by a federal 
grand jury.
    (2): Pursuant to the written instructions of the consumer on 
whom the report is sought.
    (3)(A): For use in connection with a credit transaction 
involving the consumer. Evaluating a consumer's credit application 
or reviewing or collecting on a credit account are all permissible 
purposes for obtaining a consumer report. It is not permissible for 
a creditor to obtain a report on a consumer unless the consumer has 
applied for credit or has an existing credit relationship with the 
creditor. Location or litigation purposes are never permissible 
unless they involve collection of the consumer's credit account.
    (3)(B): For use in employment decisions involving the consumer. 
An employer (or its agent) may obtain a consumer report in order to 
evaluate a consumer who has applied for employment or to evaluate a 
consumer for promotion, reassignment or retention.
    (3)(C): For use in connection with underwriting of insurance 
involving the consumer. Underwriting includes issuance or renewal of 
insurance, and its amount and terms. Consumer reports may not be 
obtained for insurance claims purposes.
    (3)(D): For use in connection with a consumer's eligibility for 
a license or benefit granted by a governmental agency that is 
required to consider the applicant's finances in the process.
    (3)(E): For use in connection with a business transaction 
involving the consumer. This section provides a strictly limited 
basis for obtaining a consumer report. To qualify, the business 
transaction must involve some benefit for which the consumer has 
applied. A consumer's application to rent an apartment or open a 
checking account would qualify, as would a consumer's request to pay 
for goods by check. The business transaction must not involve 
credit, employment, or insurance--those purposes are permissible 
only if they meet the standards of (3) (A)-(C).

Consumer Reports Will be Provided Only for These Purposes

Exhibit B to the Order

W.D.I.A. Corporation
National Credit Information Network
Post Office Box 31221
Cincinnati, Ohio 45231-0221

Date of Report: [Insert date report furnished]
Reference: Consumer credit report provided to . . .
Company: [Insert name, address and telephone number of subscriber 
who received report]

    Dear Consumer: The National Credit Information Network has 
provided a copy of your consumer credit report to the company listed 
above, at its request.
    This consumer credit report is to be used for the purpose listed 
below: [List purpose identified by report recipient]
    Should you have questions regarding the reason the above company 
requested a copy of your consumer credit report, feel free to 
contact: National Credit Information Network, Post Office Box 31221, 
Cincinnati, Ohio 45231-0221.
    You may elect to call us at (800) 374-1400, Mon-Fri., 9 a.m. to 
12 Noon E.S.T. or Mon-Fri., 1 p.m. to 4 p.m. E.S.T.

[If end user is known, state the following:]

    This report was requested on behalf of : [Identify end user]

      Respectfully submitted,
Consumer Notification Department, National Credit Information Network.

Exhibit C to the Order

Annual Certification for Access to Consumer Credit Reports

    Please answer the following:

State the nature of your business and describe what it actually 
does>
Enter all purposes, separated by commas, for which you plan to 
obtain consumer credit reports>
Please state whether your purposes for obtaining consumer credit 
reports have changed from a year ago, and, if so, explain the 
reasons for the changes>
Enter your:

Name>
    Official business title>
    Direct dial telephone number >

    Do you certify, to the best of your knowledge, that the above is 
true and accurate?

Yes I do    -or-    No I do not

Exhibit D to the Order

W.D.I.A. Corporation
National Credit Information Network
Post Office Box 31221
Cincinnati, Ohio 45231-0221

Date of Report: [Insert date report furnished]
Reference: Consumer credit report provided to . . .
Company: [Insert name, address and telephone number of subscriber 
who received report]

    Dear Consumer: The National Credit Information Network has 
provided a copy of your consumer credit report to the company listed 
above, at its request.
    This consumer credit report is to be used for employment 
purposes.
    The consumer credit report furnished contained public record 
information.
    Should you have questions concerning the reason the above 
company requested a copy of your consumer credit report, feel free 
to contact: National Credit Information Network, Post Office Box 
31221, Cincinnati, Ohio 45231-0221.
    You may elect to call us at (800) 374-1400, Mon-Fri., 9 a.m. to 
12 Noon E.S.T. Mon-Fri., 1 p.m. to 4 p.m. E.S.T.

[If end user is known, state the following:]

    This report was requested on behalf of: [Identify end user]

      Respectfully submitted,
Consumer Notification Department, National Credit Information Network.

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement to a 
proposed consent order from W.D.I.A. Corporation, a corporation, and 
its officers, Mark W. Hanna and Janice L. Campanello (``the 
respondents'').
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    Respondents' business involves the purchase of information on 
individual consumers from consumer reporting agencies and the resale of 
that information to third parties. Firms engaged in this type of 
business are sometimes called ``information brokers,'' or 
``resellers.'' The complaint accompanying the proposed order alleges 
that in connection with their buying and selling of consumer reports, 
the respondents engaged in acts and practices violating sections 604, 
607(a), and 613 of the Fair Credit Reporting Act.
    The Fair Credit Reporting Act requires that consumer reporting 
agencies, such as information brokers, maintain procedures designed to 
protect consumers' privacy. According to the complaint, the respondents 
have violated section 604 of the Fair Credit Reporting Act by regularly 
furnishing consumer reports to persons under circumstances in which the 
respondents have no reason to believe that the reports will be used for 
any of the purposes permitted under that section of the Act.
    The complaint alleges, for example, that respondents furnish 
consumer reports to certain types of subscribers (respondents' 
customers), such as attorneys and private investigators, who typically 
have impermissible as well as permissible purposes for the consumer 
reports they obtain. Such subscribers are known as ``mixed use'' users. 
According to the complaint, in many instances, respondents do not have 
reason to believe that these reports have been requested for a 
permissible purpose. The complaint also cites as a violation of section 
604 respondents' furnishing or consumer reports to new subscribers 
without having made a reasonable effort to verify the purposes for 
which these subscribers will use the reports.
    The complaint further alleges that through the conduct discussed 
above, respondents have violated section 607(a) of the Fair Credit 
Reporting Act by failing to maintain reasonable procedures designed to 
limit the furnishing of consumer reports to the purposes listed under 
section 604.
    Additionally, the compliant alleges that the respondents regularly 
furnish consumer reports for employment purposes that contain public 
record information that is likely to adversely affect a consumer's 
ability to obtain employment, but when furnishing these reports, the 
respondents do not notify the subject consumers that respondents are 
reporting public record information about them, nor do they tell the 
consumer the names and address of the persons to whom the respondents 
have furnished the reports. Because, the complaint alleges, the 
respondents do not have procedures to insure that the public record 
information they are reporting is complete and up to date, the 
respondents' failure to provide the notice violates section 613 of the 
Fair Credit Reporting Act.
    The consent order contains provisions designed to ensure that the 
respondents do not engage in similar unlawful acts and practices in the 
future.
    Part I of the order requires the respondents to cease and desist 
from furnishing any consumer report under any circumstances not 
permitted by section 604 of the Fair Credit Reporting Act.
    Part I also requires the respondents to maintain reasonable 
procedures to limit the furnishing of consumer reports to the purposes 
listed in section 604, as required by section 607(a) of the Fair Credit 
Reporting Act, and mandates specific procedures that must be followed 
to accomplish this objective. These include measures to verify the 
identities of new subscribers, the nature of their business, and the 
purposes for which they seek to obtain consumer reports. Also included 
is a procedure for notifying consumers when respondents furnish 
consumer reports to mixed-use users to ensure that such subscribers are 
using consumer reports for permissible purposes. The specific 
procedures set forth in Paragraph 2 of Part I are not necessarily 
mandated by the Fair Credit Reporting Act's ``reasonable procedures'' 
requirement but are considered by the Commission to be appropriate 
remedial relief in this case to prevent recurrence of the alleged 
violations.
    Part I of the order further requires that any time respondents 
furnish consumer reports for employment purposes that contain public 
record information that is likely to adversely affect a consumer's 
ability to obtain employment, they must notify the consumer, at the 
time the report is furnished, that public record information about the 
consumer is being reported and provide the name and address of the 
person to whom the report is being furnished, as is required by section 
613(1) of the Fair Credit Reporting Act. The order permits the 
respondents to forego providing this notification if they have either 
received written confirmation from the consumer reporting agency that 
compiled the consumer report that the agency provides such notification 
to the consumer, or have received written confirmation from the agency 
that it maintains strict procedures designed to ensure the public 
record information it reports is complete and up to date, as required 
by section 613(2).
    Part II of the order requires the respondents and their successors 
and assigns to maintain documents demonstrating compliance with the 
order for five (5) years and to make such documents available to the 
Commission upon request.
    Part III of the order requires the respondents to deliver a copy of 
the order to all present and future employees, agents, or 
representatives having responsibilities related to the respondents' 
compliance with the order.
    Part IV of the order requires the respondents to notify the 
Commission at least thirty (30) days before any proposed change in the 
structure of the respondent corporation that might affect compliance 
with the order.
    Part V of the order requires the individual respondents to promptly 
notify the Commission of the discontinuance of their present business 
or employment and of their affiliation with a new one. Also, for ten 
(10) years from the date the order is served, the individual 
respondents must promptly notify the Commission of their affiliation 
with new business or employment whose activities include the assembling 
or evaluating of consumer information or the furnishing of consumer 
reports or access to consumer reports to third parties, or in which 
their own duties or responsibilities involve such activities.
    Part VI of the order requires the respondents to file a written 
report with the Commission within sixty (60) days after service of the 
order detailing the manner and form in which they have complied with 
the order.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 94-6538 Filed 3-18-94; 8:45 am]
BILLING CODE 6750-01-M