[Federal Register Volume 63, Number 213 (Wednesday, November 4, 1998)]
[Notices]
[Pages 59566-59567]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-29514]


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FEDERAL TRADE COMMISSION

[File No. 952-3267]


First American Real Estate Solutions, LLC; Analysis To Aid Public 
Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged 
violations of federal law prohibiting unfair or deceptive acts or 
practices or unfair methods of competition. The attached Analysis to 
Aid Public Comment describes both the allegations in the draft 
complaint that accompanies the consent agreement and the terms of the 
consent order--embodied in the consent agreement--that would settle 
these allegations.

DATES: Comments must be received on or before January 4, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: David Medine or Thomas Kane, FTC/S-
4429, Washington, D.C. 20580. (202) 326-3224.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of sixty (60) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the complaint. An electronic copy of the full text of 
the consent agreement package can be obtained from the FTC Home Page 
(for October 28, 1998), on the World Wide Web, at ``http:/www.ftc.gov/
os/actions97.htm.'' A paper copy can be obtained from the FTC Public 
Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, N.W., 
Washington, D.C. 20580, either in person or by calling (202) 326-3627. 
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 Section 4.9(b)(6)(ii) of the 
Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To Aid Public Comment

    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from First American Real 
Estate Solutions, LLC (``FARES''). The proposed order would settle 
charges that First American CREDCO (``CREDCO''), which is now a 
division of FARES, violated the Fair Credit Reporting Act (``FCRA''). 
The FCRA requires, inter alia, that consumer reporting agencies such as 
CREDCO reinvestigate items that consumers dispute on their consumer 
reports and correct or delete items that are inaccurate.
    The proposed consent order has been placed on the public record for 
sixty (60) days for reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and the comments received and will decide whether it should 
withdraw from the agreement or make final the agreement's proposed 
order.
    According to the complaint, one of the consumer report products 
that CREDCO produces is the Instant Merge Report (``IMR''). IMRs 
contain blended consumer account information from two or three of the 
national consumer reporting agencies (``repositories''), Trans Union, 
Equifax, and Experian. The complaint alleges that, in connection with 
its IMRs, CREDCO (1) failed to reinvestigate disputed information, (2) 
failed to correct or delete information in consumers' files that CREDCO 
found to be inaccurate or obsolete or whose accuracy can no longer be 
verified, and (3) failed to include in subsequent IMRs a notation that 
a consumer disputes an item and a statement by the consumer setting 
forth the nature of the dispute or a codification or summary of that 
statement. According to the complaint, these practices violated Section 
611 of the FCRA, 15 U.S.C. 1681i.
    The complaint also alleges that CREDCO failed to follow reasonable 
procedures to prevent information that CREDCO has found to be 
inaccurate or obsolete, or whose accuracy could not be verified, from 
appearing on subsequent IMRs. According to the complaint, these 
practices violated Section 607(b) of the FCRA, 15 U.S.C. 1681e(b).
    Pursuant to Section 621(a)(1) of the FCRA, 15 U.S.C. 1681s(a)(1), 
all violations of the FCRA constitute unfair or deceptive acts or 
practices in commerce in violation of Section 5(a) of the Federal Trade 
Commission Act (``FTC Act''), 15 U.S.C. 459a). Thus, the complaint also 
alleges that CREDCO violated Section 5(a).
    The proposed order contains injunctive provisions designed to 
remedy the violations charged and to prevent respondent FARES from 
engaging in similar acts and practices in the future. Specifically, the 
order would require that FARES (1) reinvestigate consumer report items 
that consumers dispute and record the current status of the items or 
delete them; (2) within five business days after receiving a consumer 
dispute, notify the furnisher that the item is disputed; (3) ``review 
and consider'' all relevant information submitted by consumers in 
connection with their disputes; (4) maintain reasonable procedures 
designed to prevent the reappearance in a consumer's file, and in 
consumer reports on the consumer, of information that has been deleted; 
and (5) notify a consumer, within five business days after it completes 
a reinvestigation, (a) that the consumer has the right to file a 
dispute statement, and (b) that the consumer has the right to request 
that FARES provide either a notice that the item has been corrected or 
deleted, or the consumer's dispute statement, to any person 
specifically designated by the consumer who has received a consumer 
report that contained the deleted or disputed information within two 
years prior to the consumer's request, for employment purposes, or 
within six months prior to the consumer's request, for any other 
purpose.
    The proposed order also would require FARES to permit a consumer to 
file a dispute statement if its reinvestigation does not resolve the 
consumer's dispute. If the dispute statement is neither frivolous nor 
irrelevant, the proposed order would require FARES to include the 
statement, or a codification or summary of the statement, in all 
subsequent consumer reports that FARES prepares concerning the consumer 
that contain the disputed item. The proposed order also would require 
FARES, at the request of a consumer, to provide a notification that a 
disputed item has been corrected or deleted, or the consumer's dispute 
statement or a codification or summary of the statement, to any person 
specifically designated by the consumer who has received a consumer 
report that contained the deleted or disputed

[[Page 59567]]

information within two years prior to the consumer's request, for 
employment purposes, or within six months prior to the consumer's 
request, for any other purpose.
    The proposed order also includes a number or recordkeeping and 
reporting requirements designed to assist the Commission in monitoring 
FARES's compliance.
    Congress amended the FCRA in September 1996; the amendments became 
effective in September 1997. Because the practices of CREDCO that 
allegedly violated the FCRA occurred prior to September 1997, the 
complaint alleges violations of the pre-amendment FCRA only. The 
proposed order, however, requires FARES to comply with the post-
amendment FCRA and any future FCRA amendments.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of the agreement and proposed order or to modify in any 
way its terms.

    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 98-29514 Filed 11-3-98; 8:45 am]
BILLING CODE 6750-01-M