The Consumer Financial Protection Bureau issued a legal interpretation on the permissible purposes for companies to use and share credit reports and background reports under the Fair Credit Reporting Act.
Details: The CFPB’s advisory opinion says:
Insufficient matching procedures can result in credit reporting companies providing reports to entities without a permissible purpose, which violates consumers’ privacy rights.
Providing credit reports of multiple people as “possible matches” is unlawful.
Disclaimers about insufficient matching procedures do not cure permissible-purpose violations.
Credit report users must ensure they do not violate a person’s privacy by obtaining a credit report when they lack a permissible purpose.
Covered entities can face criminal liability for obtaining a background report on an individual under false pretenses or by providing a background report to an unauthorized individual.
