[Federal Register Volume 69, Number 229 (Tuesday, November 30, 2004)]
[Rules and Regulations]
[Pages 69776-69804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-26240]



[[Page 69775]]

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Part V





Federal Trade Commission





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16 CFR Parts 601 and 698



Summaries of Rights and Notices of Duties Under the Fair Credit 
Reporting Act; Final Rule

  Federal Register / Vol. 69 , No. 229 / Tuesday, November 30, 2004 / 
Rules and Regulations  

[[Page 69776]]


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FEDERAL TRADE COMMISSION

16 CFR Parts 601 and 698

RIN 3084-AA94


Summaries of Rights and Notices of Duties Under the Fair Credit 
Reporting Act

AGENCY: Federal Trade Commission.

ACTION: Final Guidance on Model Disclosures.

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SUMMARY: The Federal Trade Commission is publishing in final form a 
number of documents that it is required to issue by the Fair Credit 
Reporting Act (FCRA), which was significantly amended by the recently 
enacted Fair and Accurate Credit Transactions Act. These are: A summary 
of the rights under the FCRA of victims of identity theft; a general 
summary of consumer rights under the FCRA; a notice of the duties of 
persons that furnish information to consumer reporting agencies; and a 
notice of the duties of users of information obtained from consumer 
reporting agencies. These documents will be distributed by consumer 
reporting agencies and others to consumers and to businesses that 
either use information obtained from consumer reporting agencies or 
furnish information to consumer reporting agencies.

DATES: Effective Date: January 31, 2005.

FOR FURTHER INFORMATION CONTACT: For the summary of identity theft 
rights, contact Monique Einhorn, Attorney, Division of Planning and 
Information, Federal Trade Commission, 600 Pennsylvania Ave. NW., 
Washington, DC 20580, 202-326-3228; for the general summary of consumer 
rights and the furnisher and user notices, contact William Haynes, 
Attorney, Division of Financial Practices, Federal Trade Commission, 
600 Pennsylvania Ave. NW., Washington, DC 20580, 202-326-3224.

SUPPLEMENTARY INFORMATION:

I. Introduction

    The Commission is issuing in final form four documents that 
describe rights and duties under the Fair Credit Reporting Act (FCRA), 
15 U.S.C. 1681 et seq. The Commission is issuing these documents 
because of changes to the FCRA made by the Fair and Accurate Credit 
Transactions Act of 2003 (FACT Act or Act), Public Law 108-159, 117 
Stat. 1952, which was signed into law on December 4, 2003.
    The FACT Act amendments directed the Commission to issue, for the 
first time, a summary of the rights of identity theft victims. The 
changes made to the FCRA by the FACT Act also rendered obsolete three 
documents that the Commission issued in 1997: A general summary of the 
rights of consumers under the FCRA; a notice of the duties under the 
FCRA of persons that furnish information to consumer reporting 
agencies; and a notice of the duties under the FCRA of persons that use 
information obtained from consumer reporting agencies. 62 FR 35586 
(1997).
    The Commission published proposed versions of all four documents 
for public comment on July 16, 2004. 69 FR 42616 (2004). The Commission 
has received numerous comments from consumers and from the following: 
organizations representing consumer interests (``consumer group 
commenters''); banks, credit unions, and associations of banks 
(``finance commenters''); business entities and groups (``business 
commenters''); and consumer reporting industry members and associations 
(``industry commenters'').\1\ Because many commenters in a particular 
group raised the same or similar issues, we will refer in this 
discussion to the commenters by group (e.g., ``finance commenters,'' 
``industry commenters'') unless it is useful to identify a commenter by 
name. Persons interested in reviewing the comments may go to the 
Commission's Web site (www.ftc.gov/os/comments/FACTA-summaries/index.htm).
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    \1\ Among the commenters were the following: consumer 
commenters--the Consumer Federation of America, Consumers Union, the 
Electronic Privacy Information Center, the Identity Theft Resource 
Center, the National Association of Consumer Advocates, the National 
Consumer Law Center, the National Council of La Raza, the Privacy 
Rights Clearinghouse, and the U.S. Public Interest Research Group; 
finance commenters--Independent Community Bankers of America, the 
American Financial Services Association, MBNA, the Mortgage Bankers 
Association, Visa, MasterCard International, Wells Fargo, the 
American Bankers Association, America's Community Bankers; business 
commenters--ACA International, the Coalition to Implement the FACT 
Act (which includes banks, insurance companies, the National Retail 
Federation, Fannie Mae, and Fair Isaac & Co.); industry commenters--
the Consumer Data Industry Association, Equifax, Experian, Trans 
Union, and USIS Commercial Services, Inc.
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II. The Summary of Identity Theft Rights

A. Background

    Section 609(d) of the FCRA requires the Commission, in consultation 
with the Federal banking agencies \2\ and the National Credit Union 
Administration, to prepare a model summary of the rights of consumers 
``with respect to the procedures for remedying the effects of fraud or 
identity theft.'' This model summary must be distributed by consumer 
reporting agencies to any consumer who ``contacts a consumer reporting 
agency and expresses a belief that the consumer is a victim of fraud or 
identity theft.'' Section 609(d)(2) provides that consumer reporting 
agencies' obligation to distribute this summary begins 60 days after 
the date on which the model summary of rights is prescribed in final 
form by the Commission.
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    \2\ The Federal banking agencies are: the Federal Reserve Board 
of Governors, the Office of the Comptroller of the Currency, the 
Federal Deposit Insurance Corporation, and the Office of Thrift 
Supervision.
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    The proposed summary discussed the major rights of identity theft 
victims under the FCRA to remedy the effects of fraud or identity 
theft. These include: the right to obtain free file disclosures, the 
right to file fraud alerts, the right to obtain documents or 
information relating to transactions involving the consumers' personal 
information, the right to block the reporting of information by 
consumer reporting agencies resulting from identity theft, and the 
right to prevent persons who furnish information to consumer reporting 
agencies from reporting information that is the result of identity 
theft. In preparing both the proposed model summary and the final one, 
the Commission consulted with the federal banking agencies and the 
National Credit Union Administration, in accordance with the 
requirements of Section 609(d).

B. General Issues Raised by Commenters

1. The Distribution of a ``Substantially Similar'' Summary
    Section 609(d) requires the Commission to issue a ``model'' summary 
and requires the consumer reporting agencies to distribute a summary 
containing ``all of the information required by the Commission.'' In 
the July 16, 2004, Federal Register notice the Commission indicated 
that summaries issued by consumer reporting agencies would be compliant 
if they displayed ``the Commission-mandated information `clearly and 
prominently' in a form substantially similar to the Commission's model 
summary.'' 69 FR 42616, 42617.
    Consumer group commenters expressed great concern regarding the 
apparent flexibility permitted under a ``substantially similar'' 
approach. They suggested that even slight deviations in wording or 
placement of the rights within a document could allow the meaning of 
important rights to lose their prominence or lack the required context

[[Page 69777]]

to make them most apparent to the consumer.
    Section 609(d)(2) requires that the identity theft summary provided 
to consumers by the consumer reporting agencies must contain all of the 
information contained in the Commission's prescribed summary. Pursuant 
to this statutory direction, consumer reporting agencies may not 
eliminate any part of the summary of identity theft rights. By 
specifying that summaries must be ``substantially similar'' to the 
Commission's prescribed form, the Commission intends only that consumer 
reporting agencies have the leeway to make minor changes without being 
in violation of the FCRA. The Commission has added a definition of 
``substantially similar'' to 16 CFR 698.3.\3\
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    \3\ The Commission has defined ``substantially similar'' to mean 
``that all information in the Commission's prescribed model is 
included in the document that is distributed, and that the document 
distributed is formatted in a way consistent with the format 
prescribed by the Commission. The document that is distributed shall 
not include anything that interferes with, detracts from, or 
otherwise undermines the information contained in the Commission's 
prescribed model.'' 16 CFR 698.3.
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2. Understandability and Outreach
    Consumer group commenters suggested that for some consumers 
(especially those for whom English is not their primary language) the 
information and procedures discussed in the model summary may be 
difficult to comprehend. These commenters also pointed to the need for 
Commission outreach efforts to educate consumers.
    The Commission has tried, as much as possible, to use plain 
language in the summary but agrees that the notices need to be 
supplemented by outreach efforts and intends to do so. In addition, to 
better serve that portion of the population that is Spanish-speaking, 
the Commission has added a Spanish language statement at the top of the 
summary informing Spanish-speaking consumers where they can obtain more 
information in Spanish. In addition, the Commission will provide a 
Spanish translation of the summary, which will be available at the 
Commission's identity theft Web site, along with other information in 
Spanish. The Commission has added language to Appendix E of 16 CFR part 
698 stating that accurate translations of the identity theft summary 
for use in providing the summary to speakers of Spanish or another 
language will be compliant with the disclosure requirement. The 
Commission will also implement a media and education campaign to inform 
the public how to prevent identity theft, as required by Section 151(b) 
of the FACT Act.

C. Specific Issues Raised by Commenters

1. Introductory Paragraph
    In the introduction to the proposed summary, the Commission 
included contact information referencing only the Commission's identity 
theft Web site address. In response to suggestions from commenters, a 
Commission mailing address has been added to the introduction of the 
final summary for consumers who prefer to contact the agency via postal 
mail, or who do not have Web access. In response to industry, business, 
and finance commenters, and to improve clarity while maintaining 
brevity, the Commission also has shortened the general discussion of 
the FCRA in the introduction. Finally, to reflect changes in the 
definition of ``identity theft'' made by the Commission's final 
Identity Theft Rule, the term ``lawful'' has been stricken from the 
introductory paragraph. See 69 FR 63922, 63924-25.
2. Fraud Alerts
    The first section of the final summary (``You have the right to ask 
that nationwide consumer reporting agencies place ``fraud alerts'' in 
your file''), discusses the specific procedures that apply when fraud 
alerts are placed in consumers' files.\4\ The language of the 
Commission's proposal raised a few issues for commenters. One finance 
commenter suggested that the discussion be clarified to make clear that 
consumers may request only the initial fraud alert by telephone from 
the nationwide consumer reporting agencies because the extended alert 
requires submission of an identity theft report, and thus cannot be 
requested by telephone. The Commission has declined to adopt this 
suggestion. Although different procedures may have to be implemented by 
the nationwide consumer reporting agencies to accommodate the identity 
theft report requirement for the extended alert, Section 605A(d) 
requires ``[e]ach consumer reporting agency described in Section 
603(p)'' to establish ``procedures that allow consumers and active duty 
military consumers to request initial, extended, or active duty alerts 
* * * in a simple and easy manner, including by telephone.''
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    \4\ As proposed in the July 16 Federal Register notice, this was 
the second section of the summary. To improve the clarity of the 
summary, however, the Commission has moved this discussion to the 
first section of the final summary, and has consolidated the 
discussion of free file disclosures in the second section.
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    The Commission has, however, clarified the discussion of fraud 
alerts to make clear that consumers must contact the ``nationwide 
consumer reporting agencies'' to request fraud alerts and that the 
initial alert stays in the consumer's file for ``at least'' 90 days. 
The summary also contains a fuller explanation of the identity theft 
report requirement and refers consumers to the Commission's identity 
theft Website for more detailed information.
    The Commission has revised the summary to include placeholders 
(``1-800-XXX-XXXX'') for nationwide consumer reporting agencies'' toll-
free telephone numbers, rather than the current numbers used by those 
agencies. Although the summary must include these toll-free telephone 
numbers, they are subject to change, and the Commission thought it 
advisable to include the placeholders rather than the actual numbers to 
clarify that the summary must include up-to-date telephone numbers.\5\ 
The Commission notes that the names, Web site addresses, number, and 
identity of the nationwide consumer reporting agencies also are subject 
to change over time. To remain in compliance, the summary must 
accurately reflect changes to information that may change over time.
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    \5\ This same approach is taken in the general summary of 
consumer rights with respect to the nationwide consumer reporting 
agencies' toll-free telephone number for accepting consumers' 
prescreen opt-out elections under FCRA Section 604(e).
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3. Free File Disclosures from Consumer Reporting Agencies
    The discussion of free file disclosures (``You have the right to 
free copies of the information in your file'') has been modified in 
response to industry comments that the use of the term ``consumer 
report'' should be replaced by the term ``file disclosure'' to be more 
technically precise.
    In addition, industry and business commenters and the banking 
agencies that the Commission consulted suggested that the discussion of 
free file disclosures in the proposed summary was confusing. In order 
to resolve any confusion, the Commission has consolidated the 
discussion of free file disclosures in the second section of the 
summary: the new Section 605A rights to free file disclosures and the 
preexisting Section 612(c)(3) right to a free file disclosure now are 
discussed together.
    The Commission has also clarified the discussion to make clear that 
an extended alert at a nationwide

[[Page 69778]]

consumer reporting agency entitles the consumer to two free file 
disclosures in a 12-month period ``following the placing of the 
alert.'' Finally, this section has also been modified to make clear 
that consumers have the ability to obtain additional free file 
disclosures under other provisions of the FCRA. Consumers are directed 
to www.ftc.gov/credit for more detailed information.
4. Obtaining Applications and Business Records Resulting From Identity 
Theft
    The Commission has made a number of modifications to section three 
of the summary (``You have the right to obtain documents relating to 
fraudulent transactions made or accounts opened using your personal 
information''). In response to industry, finance, and business 
commenters, the Commission has added language to this section that 
tracks the requirements of Section 609(e) and clarifies that the 
consumer's request for documents should be in writing, that a business 
may specify an address for consumers to submit their written requests, 
and that a business, under certain circumstances, may refuse to provide 
this material.\6\
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    \6\ FCRA Section 609(e)(5) provides that a business may decline 
to provide the requested information if, among other things, it does 
not have ``a high degree of confidence'' that it knows the 
requester's identity, the request is based on a ``misrepresentation 
of fact'' by the requester, or the information requested pertains to 
a person's visit to a Web site or online service.
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5. Blocking Information Relating to Identity Theft in Consumers' Files
    The Commission made one substantive change to the fifth section 
(``If you believe information in your file results from identity theft, 
you have the right to ask that a consumer reporting agency block that 
information from your file''). In response to an industry commenter, 
the Commission has added language to make clear that the block covers 
any information (not just accounts) in the consumer's file, if the 
information results from identity theft. This same industry commenter 
suggested that the Commission expand the discussion of the identity 
theft report in this section. The Commission has added information 
about the identity theft report earlier in the summary in the 
discussion of fraud alerts where the term is first introduced, and has 
italicized the term ``identity theft report'' throughout the summary 
for readers'' ease of reference and to make clear that it is a term of 
art. See supra, II.C.2. Because ``identity theft report'' is a 
complicated definition subject to Commission rulemaking, consumers are 
further referred to the FTC's Web site for more information.
6. Preventing Businesses From Furnishing Information Resulting From 
Identity Theft
    In response to business and finance commenters, the Commission has 
added a statement to the sixth section (``You also may prevent 
businesses from reporting information about you to consumer reporting 
agencies if you believe the information is a result of identity 
theft'') explaining that consumers must identify for the furnisher the 
specific information it should cease reporting.
7. State Laws
    Many states have enacted laws relating to identity theft. In the 
Commission's identity theft publications and in its public outreach 
efforts, the Commission informs consumers of this fact and suggests 
that consumers contact the appropriate state and local agencies for 
more information. Consumer group commenters suggested that the 
Commission include a statement in the model summary informing consumers 
that they may have additional rights related to identity theft under 
state law. The Commission agrees. Accordingly, in the penultimate 
paragraph of the summary, there is now the statement: ``You may have 
additional rights under state law. For more information, contact your 
local consumer protection agency or your state attorney general.''
8. Concluding Paragraphs
    In the proposed summary, the Commission included a final section 
cross-referencing the general FCRA consumer rights. The Commission 
added this section to provide identity theft victims notice of the 
broader range of rights provided to them by the FCRA. Consumer group 
commenters commended the Commission for including a cross-reference to 
general FCRA rights in the identity theft summary and for cross-
referencing identity theft rights in the general summary. Industry and 
business commenters, however, suggested that the cross-reference to 
other FCRA rights went beyond the scope of Section 609(d) in discussing 
more rights than just those that address procedures for remedying fraud 
or identity theft. The Commission agrees with consumer group commenters 
that a cross-reference is necessary to ensure that consumers are aware 
of their full range of rights, and further believes that these more 
general rights may also be relevant to identity theft victims. Thus, 
this cross-reference has been retained, but in the final summary the 
discussion has been shortened. As proposed, the cross-reference briefly 
enumerated five of consumers' specific rights under the FCRA; it now 
reads simply: ``In addition to the new rights and procedures to help 
consumers deal with the effects of identity theft, the FCRA has many 
other important consumer protections. They are described in more detail 
at http://www.ftc.gov/credit.'' Identity theft victims who need more 
information on their general rights under the FCRA will be able to 
obtain it on the Web site. Moreover, identity theft victims who receive 
a file disclosure from a consumer reporting agency--e.g., after placing 
a fraud alert or requesting a free file disclosure under FCRA Section 
612(c)(3)--will receive a copy of the general summary of consumer 
rights that describes these provisions in more detail.

III. The General Summary of Consumer Rights

A. Background

    Section 609(c) of the FCRA requires the Commission to issue a 
general summary of consumer rights. This provision was added to the 
FCRA in the 1996 amendments. After a period for public comment, the 
Commission issued the general summary in 1997 as a two-page document. 
62 FR 35586 (1997).
    Section 211(c) of the FACT Act amended Section 609(c) of the FCRA 
to require the Commission to include in the summary information about 
consumers' new rights. Section 211(c) also eliminated the requirement 
that the summary include a number of disclosures such as a list of 
federal agencies that enforce the FCRA, the statement that the consumer 
may have additional rights under state law, and the statement that 
accurate derogatory information does not have to be removed from 
reports unless it is outdated or cannot be verified. (Consumer 
reporting agencies now have an independent obligation to provide this 
information.) Given these changes, the existing general summary is 
outdated.
    Accordingly, the Commission published for comment a substantially 
revised general summary. The Commission elected to include in the 
proposed summary the list of federal agencies and the other items of 
information that are no longer mandated because it believes that this 
information is helpful to consumers and should be available in one 
place. In general, industry, finance, and consumer group

[[Page 69779]]

commenters support the Commission's decision to include these items of 
information. A number of industry and finance commenters also state 
that the current version of the summary, which the Commission largely 
followed in crafting its proposed new general summary, has worked well.

B. General Issues Raised by Commenters

1. FACT Act Mandates
    The FACT Act requires the Commission and the banking and credit 
union regulators to issue rules to implement many of its provisions. 
Most of these rules have not yet been issued or will not be fully 
implemented until next year. A number of the rules will provide 
significant rights to consumers, such as the right to obtain a free 
file disclosure every twelve months, the right to receive a notice when 
creditors make decisions based on a risk-based pricing model, and the 
right to file a dispute directly with a business about information the 
business has furnished to a consumer reporting agency. The Commission 
did not include a discussion of these prospective rights in the 
proposed general summary. The proposed summary, instead, referred 
consumers to the Commission's Web site for more information.
    Consumer group commenters and some finance commenters questioned 
the Commission's decision not to include a discussion of the 
prospective rights. The Commission believes that it is difficult to 
explain these rights briefly and coherently, particularly since the 
rules implementing these rights are not yet final. Although the 
Commission has made some minor modifications to the general summary in 
response to the concerns raised by commenters--including adding a 
reference to ``additional rights'' at the beginning of the summary that 
refers consumers to the Commission's Web site--the Commission has 
decided not to add a detailed discussion of the prospective rights but 
plans to revise the general summary to reflect these new rights once 
they are in effect.
2. Length of Consumer Summary and Reference to Web Site
    In 1997, the Commission elected to limit the length of the general 
summary of consumer rights to two pages because a briefer and more 
pointed summary is more useful to, and more easily understood by, most 
consumers. In addition, because the two-page summary can be printed on 
a single sheet of standard-size paper when distributed in paper form, 
it has helped to control the cost of distribution. Where consumers need 
more detailed information about specific rights, the Commission has 
always provided additional resources.
    The Commission took the same approach with the proposed revised 
general summary. A number of industry and finance commenters report 
that this approach has worked well. Commenters representing consumer 
groups, however, believe that the proposed summary is dense, lacks 
detailed information about some rights, and lacks extensive guidance as 
to how consumers may exercise their rights. These commenters also 
expressed concern that the reference to the Commission's Web site for 
more information would be a problem for those consumers without ready 
access to the Internet.
    The Commission will mail all of its relevant credit-related 
publications to any consumer upon request. The Commission has modified 
the summary to explain how consumers without access to the Internet may 
request this information. In addition, the Commission intends to revise 
the summary once the new FACT Act regulations are in place, and will 
revisit the length of the consumer summary at that time.
3. Understandability of the General Summary
    Although some commenters--particularly business, industry, and 
finance commenters--believed that the format of the proposed general 
summary is useful and understandable, the commenters representing 
consumer groups raised questions about its understandability. Some of 
these concerns may be the result of the fact that the Federal Register 
did not publish the general summary in the format approved by the 
Commission. This notice contains the summary formatted correctly.
    Although the Commission has tried to use plain language and to 
express the legal concepts embodied in the FCRA as simply as possible, 
the Commission intends to publish on its Website an expanded version of 
the summary of rights that will give more information to consumers. To 
better serve Spanish-speaking consumers, the Commission's Web site will 
also include a Spanish translation of the summary, along with other 
Spanish-language materials, such as an expanded discussion of consumer 
rights under the FCRA. A statement now appears in Spanish at the top of 
the summary directing consumers to the FTC to obtain Spanish language 
information. In addition, the Commission encourages those businesses 
serving Spanish-speaking consumers to provide the summary in Spanish. 
Accordingly, the Commission has added language to Appendix F of 16 CFR 
part 698 stating that accurate translations of the general summary for 
use in providing the summary to consumers who use Spanish or another 
language will comply with the disclosure requirement.
4. The Distribution of a ``Substantially Similar'' Summary
    As added to the FCRA in the 1996 amendments, Section 609(c) 
required the Commission to ``prescribe'' the form and content of the 
general summary and stated that consumer reporting agencies were in 
compliance if they provided summaries ``substantially similar'' to the 
Commission's model. As amended by the FACT Act, Section 609(c) requires 
the Commission to issue a ``model'' summary and requires consumer 
reporting agencies to distribute the Commission's summary.
    Although there is no ``substantially similar'' language in Section 
609(c) as amended, the Commission included in the Federal Register 
notice of July 16 a statement that it would consider ``substantially 
similar'' summaries to be compliant. The Commission interprets the term 
``model'' to mean a notice that need not be adhered to in every detail, 
and does not believe that consumer reporting agencies should be subject 
to litigation because of minor variations from the model.
    Consumer group commenters expressed concern that the inclusion of 
the ``substantially similar'' language may create a loophole by 
permitting consumer reporting agencies to remove references to specific 
rights or to modify the summary in such a way that important rights may 
be buried in fine print. Such changes would not be acceptable. All of 
the information in the general summary must be included in order for 
any summary to comply with the law, and consumer reporting agencies do 
not have the authority to eliminate or to substantially alter any part 
of the general summary. By specifying that general summaries must be 
issued in a form ``substantially similar'' to the Commission's 
prescribed form, the Commission intends only that consumer reporting 
agencies have the leeway to make minor changes without being in 
violation of the FCRA. The Commission has added a definition of 
``substantially similar'' to 16 CFR 698.3.
    The Commission, has, however, decided to adopt the suggestion of an 
industry commenter that consumer reporting agencies be permitted to 
disclose the list of federal regulators

[[Page 69780]]

separately if they do so in a ``clear and conspicuous'' way. This 
approach may benefit consumers by, for example, permitting the general 
summary to be printed in larger type. The Commission has added a 
discussion to Appendix F to 16 CFR part 698 stating that the list of 
federal regulators may be disclosed separately.
5. State Law Rights and Enforcement
    Another issue raised by commenters concerns the statement in the 
general summary that consumers may have additional rights under state 
law. Consumer group commenters expressed the belief that this statement 
should be emphasized, while a number of industry and finance commenters 
took the position that the rights should be downplayed because Section 
625 of the FCRA preempts many state laws.
    The Commission believes that the additional rights that consumers 
have under state law and state enforcement of the FCRA are important. 
Section 609(c) specifically requires that consumers be informed that 
they have additional rights under state law and that they may wish to 
contact their state or local consumer protection agency or their state 
attorney general. Moreover, where state laws provide additional 
protections to consumers, these may be significant. The Commission has 
revised the summary by adding (before the box on the second page 
containing information about federal enforcement agencies) in bold type 
the following: ``States may enforce the FCRA, and many states have 
their own consumer reporting laws. In some cases, you may have more 
rights under state law. For more information, contact your state or 
local consumer protection agency or your state attorney general.''
    Industry and finance commenters also expressed the belief that the 
Commission should delete the statement in the proposed summary that 
consumers may sue in state court as well as federal court because of 
the fact that state court lawsuits may be transferred to the federal 
court system. The Commission has not accepted this suggestion. The FCRA 
specifically permits lawsuits in any court of competent jurisdiction, 
including state courts.
6. Outreach and Education Efforts
    A number of consumer group and finance commenters raised the issue 
that a stand-alone summary of rights will not be particularly helpful 
to many consumers who find the legal concepts embodied in the FCRA 
difficult to understand, who lack basic financial literacy, or who find 
it intimidating to deal with consumer reporting agencies. The 
Commission recognizes that education and outreach efforts are needed to 
enable consumers to understand fully their rights under the FCRA. 
Section 513 of the FACT Act itself includes the Financial Literacy and 
Education Improvement Act, which establishes the Financial Literacy and 
Education Commission (``FLEC''). A Commission representative serves on 
the FLEC, and the Commission will work with the FLEC to educate 
consumers.
    In addition, the Commission is taking a number of steps to educate 
and to help consumers. The Commission's Web site has been reorganized 
so that consumers can easily reach credit material (www.ftc.gov/credit). Information on how to contact consumer reporting agencies and 
state agencies will be on the Web site, and many materials will be 
translated into Spanish. The Commission also intends to conduct 
outreach to educate the business community about the FCRA.

C. Specific Issues Raised by Commenters

    A number of commenters suggested that the summary should be more 
technically precise, and, in response, the final summary uses the term 
``file disclosure'' in place of ``consumer report'' when describing the 
right of consumers to see the information about them in the files of 
consumer reporting agencies. In addition, the introductory paragraph to 
the summary has been modified to incorporate the suggestion that the 
summary refer to ``specialty'' agencies instead of ``specialized'' 
agencies and to explain more fully what specialty agencies are.
    In response to the issues raised by consumer group commenters, 
there is now a statement in Spanish at the very top of the summary 
directing Spanish-speaking consumers to a Spanish version of the 
summary. In addition, because the model does not summarize every right 
afforded to consumers by the FCRA, the revised summary states that 
consumers' ``major rights'' are contained in the summary and that 
``additional rights'' are available on the Web site or by writing to 
the Commission. Finally, the sentence in the introductory paragraph 
stating that consumers may have additional rights under state law has 
been moved to the end of the summary where there is now a more detailed 
discussion of state enforcement.
    In the first substantive paragraph (``You must be told if 
information in your file has been used against you''), the reference to 
``consumer reporting agency'' has been modified to more fully explain 
that credit reports or other consumer reports may be the basis for 
adverse actions.
    The heading of the second paragraph (``You have the right to know 
what is in your file'') has been modified to aid in comprehension. In 
addition, a number of commenters felt that the language of this 
paragraph was too imprecise. It has been modified to express precisely 
the circumstances in which a consumer may obtain a disclosure of the 
information in his or her file, and the various rights to free file 
disclosures are now expressed as separate bulleted paragraphs. The 
discussion of free file disclosures was modified to state that file 
disclosures under the Commission's Free Annual File Disclosures Rule, 
16 CFR part 610, will not be available for all consumers until 
September of 2005.
    The heading and text of the third paragraph (``You have the right 
to ask for a credit score'') have also been modified to be more 
precise. Business, industry, and finance commenters did not like the 
use of the term ``your credit score'' given the fact that consumers are 
entitled under Section 609(f) of the FCRA only to an educational score, 
which may not be the same as the score provided to any particular 
creditor or other user. The Commission also modified the last sentence 
to make clear that mortgage lenders (and not consumer reporting 
agencies) will give consumers credit score information in some 
circumstances.
    The fourth paragraph (``You have the right to dispute incomplete or 
inaccurate information'') has been expanded to make clear that 
consumers may dispute both ``incomplete'' and ``inaccurate'' 
information, and the heading has been revised to aid in comprehension. 
The fifth paragraph (``Consumer reporting agencies must correct or 
delete inaccurate, incomplete, or unverifiable information'') has been 
similarly modified. One industry commenter, the Consumer Data Industry 
Association, suggested adding to this paragraph a discussion of the 
fact that information removed because it cannot be verified may be 
reinserted if the furnisher certifies to the consumer reporting agency 
that the information is correct. Because of its interest in keeping the 
general summary to two pages, the Commission has decided not to add 
this reinsertion information to the general summary at this time, but 
this will be discussed on the Commission's Web site.
    The headings of the sixth (``Consumer reporting agencies may not 
report outdated negative information'') and seventh (``Access to your 
file is

[[Page 69781]]

limited'') paragraphs have been modified to enhance readability, but no 
substantive changes have been made. An industry commenter suggested 
that the Commission include in the discussion of access in the seventh 
paragraph a statement that consumers' rights are limited in certain 
employee misconduct investigations. Because the exemption in Section 
603(x) is narrow and will affect consumers only in limited 
circumstances, the Commission has determined that it will not address 
this matter in the general summary, but will make that exception clear 
in its general consumer education efforts.
    The heading of the eighth paragraph (``You must give your consent 
for reports to be provided to employers'') has been revised, and the 
paragraph now makes clear that consent is to be given to the employer. 
A statement has been added at the end of this paragraph pointing out 
the exception to the requirement for ``written'' permission that 
applies to the trucking industry. In addition, the reference to 
``blanket'' permission has been removed, because the Commission 
believes that this is a complicated concept to explain to consumers in 
a concise manner. Additional information is available in the 
Commission's consumer education publications, and the issue continues 
to be discussed in the notice of user duties.
    The heading of the ninth paragraph (``You may limit `prescreened' 
offers of credit and insurance you get based on information in your 
credit report'') has been modified to improve readability, and the 
paragraph now makes clear that the opt-out number in the paragraph is 
only for ``nationwide'' agencies. The tenth paragraph (``You may seek 
damages from violators'') also has been modified. A number of finance 
and industry commenters objected to the Commission's proposed language 
because furnishers and users have limited liability to consumers under 
the FCRA. The Commission has adopted wording proposed by commenter 
American Banking Association: ``If a consumer reporting agency, or, in 
some cases, a user of consumer reports or furnisher of information to a 
consumer reporting agency violates the FCRA, you may be able to sue in 
state or federal court.'' The Commission believes that this accurately 
reflects the statute. As discussed above, the Commission has not 
adopted the suggestion of a number of industry and finance commenters 
that the reference in this paragraph to lawsuits in state courts be 
eliminated.
    The discussion of identity theft and active duty military rights in 
what is now the eleventh paragraph has been shortened to save space. 
Consumers are referred to the Commission's Web site for more 
information. Finally, at the bottom of the second page of the summary, 
the Commission has made significant changes. In response to consumer 
group commenters who expressed concern that the proposed summary did 
not adequately alert consumers to rights that they have under state 
laws, the Commission moved the statement concerning state law rights 
from the introductory paragraph to this location, added a reference to 
the fact that states may enforce the FCRA, and now directs consumers to 
contact their state attorney general or regulator as well as the 
appropriate federal regulator if they believe law violations have 
occurred.

IV. Furnisher and User Notices

A. Background

    Section 607(d)(1) of the FCRA, which was added in the 1996 
amendments to the FCRA, requires consumer reporting agencies to 
distribute to each person that regularly furnishes information to the 
agency or that receives information from the agency a notice of the 
person's responsibilities under the FCRA. The statute requires the 
Commission to ``prescribe'' the content of model notices that can be 
used to comply with Section 607(d)(1). In 1997, the Commission issued 
both the notice explaining the duties of persons furnishing information 
to consumer reporting agencies (``furnisher notice'') and the notice 
explaining the duties of persons using information obtained from 
consumer reporting agencies (``user notice''). 62 FR 35586 (1997).
    The FACT Act did not amend Section 607(d), but it did alter in 
significant ways the duties of furnishers and users. As a result, the 
Commission published revised furnisher and user notices for comment in 
the Federal Register on July 16. 69 FR 42616 (2004). The comments 
received by the Commission raised a number of major issues that are 
discussed below.

B. General Issues Raised by Commenters

1. Distribution of Furnisher and User Notices
    The July 16 Federal Register notice set forth the Commission's 
initial position that the revisions to the FCRA by the FACT Act are so 
significant that consumer reporting agencies must distribute new 
furnisher and user notices. An industry commenter and some finance 
commenters objected to this position, primarily citing the cost of 
providing revised notices.
    Consumer reporting agencies are required under Section 607(d) to 
provide to furnishers and users a complete description of their duties 
under the FCRA. Section 607(d)(2) provides that they may comply with 
this obligation by providing furnishers and users with a notice 
``substantially similar'' to the model prescribed by the Commission.\7\ 
That is, the Commission's notices are a ``safe harbor.'' The Commission 
is now substantially changing its model notices, and it believes that 
consumer reporting agencies wishing to avail themselves of the 
statute's safe harbor should provide the revised notices to users and 
furnishers.
---------------------------------------------------------------------------

    \7\ The Commission has added a definition of ``substantially 
similar'' to 16 CFR 698.3.
---------------------------------------------------------------------------

    The FCRA, as amended by the FACT Act, contains substantial new 
obligations that have not yet been implemented by rules of the 
Commission and other agencies. As a result, the Commission intends to 
revise the model notices again when the relevant rulemaking proceedings 
are complete. Until that time, the Commission believes that consumer 
reporting agencies may take advantage of the Section 607(d)(2) safe 
harbor by delivering the revised ``interim'' notices only to those new 
users and furnishers who have never before received the notices. Of 
course, all furnishers and users must comply with every new duty as it 
becomes effective, without regard to whether they have been notified of 
the duty by a consumer reporting agency.

2. Information on Rules That Are Not Yet Complete

    At the suggestion of business, finance, and industry commenters, 
the Commission has added a box at the top of both notices that alerts 
users and furnishers to the fact that some of the regulations required 
by the FACT Act and discussed in the notice were not issued when the 
notice was prescribed. Recipients of the notices are directed to the 
Commission's Web site, where the Commission maintains updated 
information about the status of the regulations. Furnishers and users 
regulated by other entities are directed to contact those entities for 
information about any relevant regulations implementing the FACT Act.
3. Additional Resources
    At the suggestion of an industry commenter and for the convenience 
of users and furnishers, the Commission has added to both notices (1) a 
list of the United States Code citations that correspond to the FCRA 
sections discussed in the notice, and (2) a

[[Page 69782]]

reference to the Commission's Web site for more information about the 
FCRA, including publications for businesses.

B. Specific Issues Raised by Commenters

    The Commission has made a number of other additions and revisions 
to the furnisher and user notices to reflect suggestions made by 
commenters. The following discussion describes the significant changes 
made to the proposed notices.
1. Furnisher Notice
    A number of business, finance, and industry commenters suggested 
that the Commission revise the introductory paragraph of the furnisher 
notice to identify the specific states (California and Massachusetts) 
whose ``furnisher'' laws are not preempted by the FCRA. The Commission 
has not made this change because the preemption provision is unchanged 
since 1997 and the language in the introductory paragraph has not 
caused confusion.
    In the fourth section (``Duties After Notice of Dispute from 
Consumer''), the Commission, at the suggestion of several industry and 
finance commenters, has added a discussion of Section 623(a)(1)(B), 
which describes the general ``accuracy'' duties that furnishers have 
when consumers notify them of inaccurate information. ACA 
International, a major association of debt collectors, requested in its 
comments that the Commission include a statement that contacts with 
consumers by debt collectors undertaken in compliance with Section 
623(a)(8) (the provision governing consumer disputes made directly to 
information furnishers) are not communications or attempts to collect 
debts under the Fair Debt Collection Practices Act, 15 U.S.C. 1601 et 
seq. ACA International is concerned that debt collectors may not be 
registered to do business in states where consumers who dispute 
information are located, and that the contacts involved in handling 
these disputes will trigger state debt collection laws. Because 
furnishers' new obligations to accept consumer disputes are dependent 
on rules that have not yet been drafted, it would be premature to 
address this issue.
    The fifth section (``Duties After Notice of Dispute From Consumer 
Reporting Agency'') has been slightly modified to reflect the 
statutorily mandated timeline. The seventh section (``Duty to Report 
Dates of Delinquencies''), which previously referred to ``debt 
collectors,'' now makes clear that ``any person'' who acquires or is 
collecting a delinquent debt must comply with the reporting 
requirements of Section 623(a)(5). This section also has been revised 
to more closely track the statutory language.
    The eighth section (``Duties of Financial Institutions When 
Reporting Negative Information'') has been revised to make clear that 
the provision only applies to persons that furnish information to 
``nationwide'' consumer reporting agencies as defined in Section 
603(p). The reference to the Federal Reserve Board regulations has been 
revised to reflect the fact that the Board has issued two model 
disclosures.
    The Commission has revised the tenth section (``Duties When ID 
Theft Occurs'') to include a discussion of Section 623(a)(2), which 
requires each furnisher to notify all agencies to which it reports when 
it learns it has furnished inaccurate information. At the suggestion of 
a number of finance and industry commenters, the last sentence in this 
paragraph also has been modified to make clear that the prohibition 
upon selling debts that are linked to identity theft does not apply in 
certain limited circumstances involving repurchase, securitization, and 
transfers as the result of corporate mergers, acquisitions, or asset 
sales.
2. User Notice
    The introductory paragraphs of the user notice have been slightly 
modified by adding, at the suggestion of an industry commenter, a 
statement directing readers to the end of the notice where there is now 
a list of the sections of the FCRA with parallel citations to the 
United States Code. Readers are also referred to the Commission's Web 
site, where the full text of the FCRA is available.
    A number of finance commenters suggested that the statement in the 
third bullet of Part I.A. (``Users Must Have a Permissible Purpose''), 
discussing the credit permissible purpose in FCRA Section 604(a)(3)(A), 
should be broadened to include any credit transaction ``involving'' a 
consumer. The Commission believes that the only situations where 
consumer reports may be obtained under this subsection occur when 
consumers apply for credit, or where a creditor obtains consumer 
reports for the review or collection of consumers' accounts. 
Accordingly, the Commission has not changed this section of the notice.
    A significant change has been made in the introductory paragraph of 
Part I.C. (``Users Must Notify Consumers When Adverse Actions Are 
Taken''). A number of business and finance commenters expressed 
concerns that the Commission's description of adverse actions did not 
adequately explain that no adverse action occurs in a credit 
transaction when a user makes a counteroffer that is accepted by the 
consumer. The Commission has shortened the explanatory text as a result 
of these comments, has added ``as defined by Section 603(k) of the 
FCRA'' in the second sentence, and has added a statement that no 
adverse action occurs for the purposes of the FCRA where a creditor 
makes, and the consumer accepts, a counteroffer. Similar changes were 
made in the first sentence of Part I.C.1.
    The discussion in Part I.C.3. (``Adverse Actions Based on 
Information Obtained From Affiliates'') also has been modified. At the 
suggestion of industry and finance commenters, who found the discussion 
confusing, the Commission has eliminated the portion of the 
parenthetical discussion at the end of the paragraph that discussed the 
sharing of non-consumer report information among affiliates. This issue 
is discussed in more detail on the Commission's Web site.
    The discussion in Part I.D. (``Users Have Obligations When Fraud 
and Active Duty Military Alerts are in Files'') has been slightly 
modified to emphasize that the limitations imposed on users apply only 
in certain circumstances. Part I.E. (``Users Have Obligations When 
Notified of an Address Discrepancy''), discussing duties where the user 
has an address that differs from the address(es) in the information 
obtained from the consumer reporting agency, has been expanded to make 
clear that these duties apply only to users who receive address 
discrepancy notices from nationwide consumer reporting agencies.
    The proposed notice included in Part II a description of the 
requirement in Section 615(h) that users who are creditors must provide 
a notice to consumers when risk-based pricing systems are used. This 
statement generated a considerable response from business, industry, 
and finance commenters. There is no obligation under Section 615(h) 
until it is implemented by a joint rule of the Federal Reserve Board 
and the Commission. The Commission has revised this section to include 
a simple recitation of the statutory language, and will defer 
consideration of how best to describe this new obligation until the 
joint rule is complete.
    Finally, some minor changes have been made in Parts III.A. 
(``Employment Other Than in the Trucking Industry'') and VI 
(``Obligations of Users of Medical Information'') in response to 
industry and finance commenters. The

[[Page 69783]]

discussion of user duties in employment situations in Part III.A. has 
been expanded to make clear that consumers may give blanket 
authorization to employers for consumer reports to be obtained during 
the term of employment. And the discussion in Part VI of the 
obligations of users of medical information has been revised slightly 
to specify that regulations issued by the banking and credit union 
regulators will affect the use of medical data.

V. Repeal of Existing Summaries and Notices

    The existing model Summary of Consumer Rights, Notice of Furnisher 
Duties, and Notice of User Duties are codified at 16 CFR part 601. The 
Commission is reorganizing Subchapter F of Title 16 of the Code of 
Federal Regulations to reflect its substantial new rulemaking and other 
responsibilities under the FACT Act and FCRA. As a part of this general 
organizational scheme the Commission plans to codify all guidance on 
model forms and disclosures, including the model Summaries of Rights 
and Notices of Duties, at 16 CFR part 698. Accordingly, it is repealing 
the existing notices at 16 CFR part 601, but is reserving that Part for 
future use. The new and revised model Summaries of Rights and Notices 
of Duties will be codified at 16 CFR part 698, Appendices E, F, G, and 
H.

VI. Effective Date

    The Commission is setting an effective date for the model summaries 
and notices of sixty days after publication in the Federal Register. 
The consumer reporting agencies may, of course, begin using the model 
summaries and notices earlier than that, but the Commission expects 
that it will take a certain amount of time for the consumer reporting 
agencies to have their summaries and notices printed and ready for 
distribution. In addition, the FACT Act specifically states that the 
consumer reporting agencies have sixty days after the model summary for 
identity theft rights is prescribed in final form to begin distributing 
such a summary. Consequently, for ease of administration and 
convenience, the Commission is establishing one, uniform effective date 
for all of the summaries and notices.

VII. Final Regulatory Flexibility Act Analysis

    The Regulatory Flexibility Act (``RFA''), 5 U.S.C. 601-612, 
requires that the Commission provide an Initial Regulatory Flexibility 
Analysis (``IRFA'') with any action that may constitute a rule and a 
final Regulatory Flexibility Analysis (``FRFA'') with the final action, 
unless the Commission certifies that its action will not have a 
significant economic impact on a substantial number of small entities 
(i.e., those with less than $6,000,000 in average annual receipts). 5 
U.S.C. 603-605. The Commission stated in its IRFA that it had concluded 
that this matter will not have a significant economic impact on a 
substantial number of small entities. The Commission, however, did 
request public comment on this issue. As discussed below, only one 
comment specifically addressed the RFA. The Commission hereby certifies 
that this matter will not have a significant economic impact on a 
substantial number of small entities.

A. Need for and Objectives of Proceeding

    The Fair and Accurate Credit Transactions Act of 2003, Public Law 
108-159, 117 Stat. 1952, substantially amended the FCRA. The FACT Act 
added Section 609(d) of the FCRA, which requires the Commission to 
prescribe a summary of the rights that identity theft victims have 
under the FCRA. The FACT Act also amended Section 609(c), which was 
added in the 1996 amendments to the FCRA and which requires the 
Commission to prescribe a general summary of consumer rights under the 
FCRA. Finally, the FACT Act extensively amended many other provisions 
of the FCRA. As a result, the notices of user and furnisher duties that 
the Commission is required to prescribe by Section 607(d) of the FCRA 
are outdated. The Commission is now prescribing all four of these 
documents in accordance with the requirements of the FCRA as amended by 
the FACT Act.

B. Significant Issues Raised by Public Comment

    The Commission received only one comment specifically focused on 
the IRFA published by the Commission on July 16. This came from 
industry commenter Consumer Data Industry Association (CDIA). In its 
proposal the Commission stated that it believed that the FACT Act's 
amendments to the FCRA were significant enough to require that revised 
furnisher and user notices be distributed by consumer reporting 
agencies to all persons that furnish information to them and that 
obtain information from them. CDIA stated that it would be burdensome 
for consumer reporting agencies to have to distribute revised notices 
to furnishers and users that had already received the Commission's 1997 
versions of these documents. CDIA, however, did not provide any 
information on the number of small entities that would be affected or 
the costs imposed upon these entities. A number of other commenters, 
while not directing their comments to the Commission's IRFA, also 
questioned whether consumer reporting agencies should have to 
distribute revised furnisher and user notices. As discussed above, the 
Commission believes that consumer reporting agencies need deliver these 
``interim'' revised user and furnisher notices only to new users and 
furnishers. Existing users and furnishers can be provided new notices 
when the Commission makes final revisions to the notices, following 
completion of the FACT Act rulemaking proceedings.

C. Small Entities to Which the Rule Will Apply

    The proposed summaries and notices are to be distributed by 
consumer reporting agencies. The definition of a ``small'' consumer 
reporting agency is currently one with less than $6 million in average 
annual receipts (see http://www.sba.gov/size). The consumer reporting 
industry is primarily composed of large national consumer reporting 
agencies, including the so-called ``nationwide'' consumer reporting 
agencies and ``nationwide specialty'' consumer reporting agencies, as 
defined in FCRA Sections 603(p) and 603(w), respectively. The 
Commission believes that none of these nationwide agencies are 
``small'' entities. There are, however, small consumer reporting 
agencies associated with the nationwide consumer reporting agencies, 
and there are small independent consumer reporting agencies. Based on 
the membership of the major consumer reporting agency trade 
associations, the Commission believes that the total universe of 
entities potentially covered by the requirement to distribute summaries 
and notices is between 1000 and 1400. As discussed below, the 
Commission believes that the large nationwide entities will be 
responsible for much of the distribution of the summaries and notices. 
The Commission received no comments on the number of small entities 
that will be affected.

D. Projected Reporting, Recordkeeping, and Other Compliance 
Requirements

    The Commission's proposal will impose no specific reporting or 
recordkeeping requirements. Consumer reporting agencies are required by 
statute, however, to distribute the prescribed summaries and notices. 
The summary of identity theft rights (Section 609(d)) will be 
distributed to all consumers who contact the agencies to

[[Page 69784]]

report that they may be the victim of fraud or identity theft. The 
general summary of consumer rights (Section 609(c)) will be distributed 
with each written file disclosure made by the agencies. Both of these 
summaries will be distributed to large numbers of consumers each year. 
By contrast, the notices of user and furnisher duties (Section 607(d)) 
need be distributed only on a one-time basis to all of the entities 
that furnish information to a consumer reporting agency or use 
information obtained from an agency.
    The Commission does not believe that the requirements mandated by 
the FACT Act and discussed in detail in the IRFA analysis will increase 
in any significant way the burdens already imposed by the FCRA on 
consumer reporting agencies. Because the Commission is providing the 
language for the summaries and notices, businesses need not incur legal 
or other professional costs to develop any written material. The cost 
of training employees, if any, should be minimal. When the document is 
distributed electronically, the Commission believes that the 
distribution costs will be negligible. The Commission believes that the 
major burden of providing the new summary of identity theft rights will 
fall upon the nationwide consumer reporting agencies that are not small 
entities. The Commission received no comments on this issue.

E. Duplicative, Overlapping, or Conflicting Federal Rules

    The Commission has not identified any other federal statutes, 
rules, or policies that would duplicate, overlap, or conflict with the 
proposed notices. The Commission received no comments on this issue.

F. Steps Taken To Minimize Significant Economic Impact on Small 
Entities

    The Commission invited comment on suggested alternative methods of 
compliance. While no commenter specifically addressed this issue, a 
number of industry and finance commenters expressed concerns that it 
would be burdensome to redistribute the furnisher and user notices. As 
discussed above, the Commission believes that consumer reporting 
agencies need deliver these ``interim'' revised user and furnisher 
notices only to new users and furnishers. Existing users and furnishers 
can be provided new notices when the Commission makes final revisions 
to the notices, following completion of the FACT Act rulemaking 
proceedings.

VIII. Paperwork Reduction Act

    In its initial review of the proposed summaries and notices, the 
Commission considered whether it was ``sponsoring or conducting'' any 
``collection[s] of information'' that would trigger the provisions of 
the Paperwork Reduction Act, 44 U.S.C. Chapter 35. The Commission 
concluded that it was not and that the proposed summaries and notices 
fell within the exception to the definition of a ``collection of 
information'' as ``[t]he public disclosure of information originally 
supplied by the Federal government to the recipient for the purpose of 
disclosure to the public.'' 5 CFR 1320.3(x)(2). Nonetheless, the 
Commission requested public comment on this matter. No comments were 
received. Accordingly, the Commission has determined that its actions 
in this matter will not implicate the Paperwork Reduction Act.

IX. Final Guidance on Model Disclosures

List of Subjects in 16 CFR Parts 601 and 698

    Fair Credit Reporting Act, Consumer reports, Consumer reporting 
agencies, Credit, Trade practices.


0
Accordingly, for the reasons set forth above, the FTC amends title 16, 
Code of Federal Regulations, as follows:

PART 601--[REMOVED AND RESERVED]

0
1. Part 601 is removed and reserved.
0
2. Revise the heading of part 698 to read as follows:

PART 698--MODEL FORMS AND DISCLOSURES

0
3. The authority for Part 698 is revised to read as follows:

    Authority: 15 U.S.C. 1681e, 1681g, 1681j, 1681m, and 1681s; 
section 211(d), Pub. L. 108-159, 117 Stat. 1952.


0
4. Revise Sec. Sec.  698.1 and 698.2 to read as follows:


Sec.  698.1  Authority and purpose.

    (a) Authority. This part is issued by the Commission pursuant to 
the provisions of the Fair Credit Reporting Act (15 U.S.C. 1681 et 
seq.), as amended by the Consumer Credit Reporting Reform Act of 1996 
(Title II, Subtitle D, Chapter 1, of the Omnibus Consolidated 
Appropriations Act for Fiscal Year 1997), Public Law 104-208, 110 Stat. 
3009-426 (Sept. 30, 1996), and the Fair and Accurate Credit 
Transactions Act of 2003, Public Law 108-159, 117 Stat. 1952 (Dec. 4, 
2003).
    (b) Purpose. The purpose of this part is to comply with sections 
607(d), 609(c), 609(d), and 612(a) 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.


Sec.  698.2  Legal effect.

    These model forms and disclosures prescribed by the FTC do not 
constitute a trade regulation rule. The issuance of the model forms and 
disclosures set forth below carries out the directive in the statute 
that the FTC prescribe these forms and disclosures. Use or distribution 
of these model forms and disclosures will constitute compliance with 
any section or subsection of the FCRA requiring that such forms and 
disclosures be used by or supplied to any person.


0
5. Add new Sec.  698.3 to read as follows:


Sec.  698.3  Definitions.

    As used in this part, unless otherwise provided:
    (a) Substantially similar means that all information in the 
Commission's prescribed model is included in the document that is 
distributed, and that the document distributed is formatted in a way 
consistent with the format prescribed by the Commission. The document 
that is distributed shall not include anything that interferes with, 
detracts from, or otherwise undermines the information contained in the 
Commission's prescribed model.


0
6. Amend part 698 to add a new Appendix E as follows:

Appendix E to Part 698--Summary of Consumer Identity Theft Rights

    The prescribed form for this summary is a disclosure that is 
substantially similar to the Commission's model summary with all 
information clearly and prominently displayed. A summary should 
accurately reflect changes to those items that may change over time 
(such as telephone numbers) to remain in compliance. Translations of 
this summary will be in compliance with the Commission's prescribed 
model, provided that the translation is accurate and that it is 
provided in a language used by the recipient consumer.

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[[Page 69787]]



0
7. Amend part 698 to add a new Appendix F as follows:

Appendix F to Part 698--General Summary of Consumer Rights

    The prescribed form for this summary is a disclosure that is 
substantially similar to the Commission's model summary with all 
information clearly and prominently displayed. The list of federal 
regulators that is included in the Commission's prescribed summary 
may be provided separately so long as this is done in a clear and 
conspicuous way. A summary should accurately reflect changes to 
those items that may change over time (e.g., dollar amounts, or 
telephone numbers and addresses of federal agencies) to remain in 
compliance. Translations of this summary will be in compliance with 
the Commission's prescribed model, provided that the translation is 
accurate and that it is provided in a language used by the recipient 
consumer.
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[[Page 69790]]



0
8. Amend Part 698 to add a new Appendix G as follows:

Appendix G to Part 698--Notice of Furnisher Responsibilities

    The prescribed form for this disclosure is a separate document 
that is substantially similar to the Commission's model notice with 
all information clearly and prominently displayed. Consumer 
reporting agencies may limit the disclosure to only those items that 
they know are relevant to the furnisher that will receive the 
notice.

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[[Page 69795]]



0
9. Amend Part 698 to add a new Appendix H as follows:

Appendix H to Part 698--Notice of User Responsibilities

    The prescribed form for this disclosure is a separate document 
that is substantially similar to the Commission's notice with all 
information clearly and prominently displayed. Consumer reporting 
agencies may limit the disclosure to only those items that they know 
are relevant to the user that will receive the notice.

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[GRAPHIC] [TIFF OMITTED] TR30NO04.015


[[Page 69804]]


[GRAPHIC] [TIFF OMITTED] TR30NO04.016


    By direction of the Commission.
Donald S. Clark,
Secretary.
[FR Doc. 04-26240 Filed 11-29-04; 8:45 am]
BILLING CODE 6750-01-C