PRINTER'S NO. 3957
No. 2921 Session of 1992
INTRODUCED BY D. R. WRIGHT, DeLUCA, COHEN, PESCI, MIHALICH,
SALOOM, STISH, HARPER, JOSEPHS, FAIRCHILD, KUKOVICH, CLARK,
RAYMOND, LINTON, GODSHALL, CORRIGAN, MELIO, TIGUE, McHALE,
STEELMAN, KASUNIC, NAHILL, BELFANTI, VEON, BATTISTO, HARLEY,
OLASZ, PETRONE, PISTELLA, FAJT, SAURMAN, CARN, WOGAN,
WILLIAMS AND JAMES, JULY 2, 1992
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, JULY 2, 1992
AN ACT
1 Providing for the fair reporting of information about finances
2 and character of individuals; regulating the collection and
3 use of the information; establishing remedies; imposing
4 penalties; and conferring powers and duties on the Department
5 of Commerce.
6 TABLE OF CONTENTS
7 Section 1. Short title.
8 Section 2. Definitions.
9 Section 3. Permissible dissemination of reports.
10 Section 4. Investigative reports.
11 Section 5. Reporting of obsolete information prohibited.
12 Section 6. Disclosures to subjects.
13 Section 7. Procedures in case of disputed accuracy.
14 Section 8. Charges for disclosures.
15 Section 9. Use.
16 Section 10. Responsibilities of providers.
17 Section 11. Remedies.
1 Section 12. Penalty.
2 Section 13. Administration.
3 Section 14. Effective date.
4 The General Assembly of the Commonwealth of Pennsylvania
5 hereby enacts as follows:
6 Section 1. Short title.
7 This act shall be known and may be cited as the Fair
8 Information Reporting Act.
9 Section 2. Definitions.
10 The following words and phrases when used in this act shall
11 have the meanings given to them in this section unless the
12 context clearly indicates otherwise:
13 "Adverse action." As defined in section 701(d)(6) of the
14 Consumer Credit Protection Act (Public Law 90-312, 15 U.S.C. §
15 1691(d)(6)).
16 (1) The term includes:
17 (i) Denial of insurance for personal, family or
18 household purposes.
19 (ii) Denial of employment or any other decision for
20 employment purposes which adversely affects any current
21 or prospective employee.
22 (iii) Increase in a charge for, or any reduction in
23 the amount of, insurance for personal, family or
24 household purposes.
25 (iv) Any action or determination which:
26 (A) Is taken or made in connection with an
27 application which was made by, or any transaction
28 which was initiated by, any subject.
29 (B) Is adverse to the interest of the subject.
30 (2) The term does not include a refusal to extend
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1 additional credit under an existing credit arrangement if:
2 (i) the subject is delinquent or otherwise in
3 default with respect to the arrangement; or
4 (ii) the additional credit would exceed a previously
5 established credit limit.
6 "Department." The Department of Commerce of the
7 Commonwealth.
8 "Employment purpose." The purpose of evaluating a subject
9 for employment, promotion, reassignment or retention as an
10 employee.
11 "File." All of the information on a subject recorded and
12 retained by a reporting agency, regardless of how the
13 information is stored.
14 "Investigative report." A report in which information on a
15 subject's character, general reputation, personal
16 characteristics or mode of living is obtained through personal
17 interviews with neighbors, friends, associates or acquaintances
18 of the subject. The term does not include specific factual
19 information on a subject's credit record which is obtained:
20 (1) directly from a creditor of the subject; or
21 (2) indirectly from a credit reporting agency which
22 obtained the information directly from the subject or a
23 creditor of the subject.
24 "Medical information." Information or records obtained from
25 a practitioner of the healing arts or from a health care
26 facility.
27 "Person." Any individual; partnership; corporation; trust;
28 estate; cooperative; association; government, including an
29 agency, instrumentality or authority; or other entity.
30 "Provider." A person who furnishes information about a
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1 subject to a reporting agency.
2 "Report." Any written, oral or other communication of
3 information by a reporting agency bearing on a subject's
4 creditworthiness, credit standing, credit capacity, character,
5 general reputation, personal characteristics or mode of living
6 which is used or expected to be used as a factor in establishing
7 the subject's eligibility for credit or insurance to be used
8 primarily for personal, family or household purposes, for
9 employment purposes or for other purposes authorized under
10 section 3. The term does not include any of the following:
11 (1) A report containing information solely as to
12 transactions or experiences between the subject and the
13 person making the report.
14 (2) An authorization or approval of a specific extension
15 of credit directly or indirectly by the issuer of a credit
16 card or similar device.
17 (3) A report in which a person who has been requested by
18 a third party to make specific extension of credit directly
19 or indirectly to a subject conveys a decision with respect to
20 the request, if the third party advises the subject of the
21 name and address of the person to whom the request was made
22 and that person makes the disclosures to the subject required
23 under section 615 of the Consumer Credit Protection Act
24 (Public Law 90-321, 15 U.S.C., § 1681m).
25 "Reporting agency." Any person which, for monetary fees or
26 dues or on a cooperative nonprofit basis, regularly engages in
27 the practice of assembling or evaluating credit information or
28 other information on subjects for the purpose of furnishing
29 reports to third party.
30 "Subject." An individual about whom a report is made.
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1 "User." A person other than a subject who requests or
2 receives a report.
3 Section 3. Permissible dissemination of reports.
4 (a) General rule.--Subject to subsections (b), (c) and (d),
5 a reporting agency may furnish a report only under the following
6 circumstances:
7 (1) In response to the order of a court having
8 jurisdiction to issue such an order.
9 (2) In accordance with the written instructions of the
10 subject to whom it relates.
11 (3) To a person if the reporting agency has reason to
12 believe that the person meets any of the following:
13 (i) Intends to use the information in connection
14 with a credit transaction involving the subject and
15 involving the extension of credit to or review or
16 collection of an account of the subject.
17 (ii) Intends to use the information for employment
18 purposes.
19 (iii) Intends to use the information with the
20 underwriting of insurance involving the subject.
21 (iv) Intends to use the information in connection
22 with the determination of a subject's eligibility for a
23 license or other benefit granted by a governmental
24 instrumentality required by law to consider an
25 applicant's responsibility or status.
26 (v) Otherwise has a legitimate business need for the
27 information in connection with a business transaction
28 involving the subject, including a review of a subject's
29 application for the rental of a dwelling or for check-
30 cashing privileges.
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1 (b) Requests by third parties.--
2 (1) A reporting agency may not furnish a report under
3 subsection (a)(3)(i) or (v) to a user in connection with a
4 credit or business transaction which is not initiated by the
5 subject unless the subject has:
6 (i) had an opportunity to notify the reporting
7 agency that the subject does not consent to the use of
8 information in connection with a credit or business
9 transaction which is not initiated by the subject; and
10 (ii) not notified the reporting agency of lack of
11 consent.
12 (2) A reporting agency may provide a third party only
13 the name and address of a subject in connection with a credit
14 or business transaction which is not initiated by the
15 subject.
16 (c) Notice requirements.--
17 (1) A reporting agency which furnishes a report under
18 subsection (a)(3)(i) or (v) in connection with a credit or
19 business transaction which is not initiated by the subject
20 shall do all of the following:
21 (i) Maintain a notification system which permits a
22 subject whose report is maintained by the reporting
23 agency to notify the reporting agency of the subject's
24 election to have the subject's name and address removed
25 from a list of names and addresses provided by the
26 reporting agency.
27 (ii) Publish at least annually in a publication of
28 general circulation in the area served by the reporting
29 agency the address and toll-free telephone number for
30 notifying the reporting agency of the election under
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1 subparagraph (i).
2 (2) A reporting agency which compiles and maintains
3 reports on a Statewide basis shall establish the notification
4 system under paragraph (1) on a Statewide basis. Reporting
5 agencies may operate a notification system under this
6 paragraph jointly.
7 (3) A user who utilizes a report for the purpose of
8 soliciting credit or business transactions which are not
9 initiated by the subject shall provide the subject with
10 information about how the subject may have the subject's name
11 removed from solicitation lists under paragraph (1).
12 (d) Permissible employment purposes.--
13 (1) Subject to paragraph (2), a reporting agency may
14 furnish a report, and a user may use a report, for employment
15 purposes only under the following circumstances:
16 (i) Employment is required or expected to require a
17 security clearance.
18 (ii) Employment in which the employee is required to
19 be covered by a fidelity bond.
20 (iii) Employment requiring the employee, on a
21 regular basis and as part of the normal duties of
22 employment, to handle or have access to substantial
23 amounts of money or other things of value belonging to or
24 in charge of the employer or to engage in conduct or
25 activity in which the employee has a fiduciary duty.
26 (2) A reporting agency may furnish a report for
27 employment purposes only if the user certifies all of the
28 following:
29 (i) The disclosure required under paragraph (3)(i)
30 or (4) has been made.
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1 (ii) Information from the report will not be used in
2 violation of any Federal or State equal employment
3 opportunity law.
4 (3) A user may not procure a report for employment
5 purposes with respect to a subject who is not an employee at
6 the time the report is procured unless all of the following
7 apply:
8 (i) A clear and prominent disclosure is made in
9 writing to the subject before the report is procured that
10 a report may be obtained for purposes of considering the
11 subject for employment.
12 (ii) The subject authorizes the procurement of the
13 report.
14 (4) The following disclosures apply to subjects who are
15 existing employees:
16 (i) Except as provided in subparagraph (ii), a user
17 may not procure a report for employment purposes with
18 respect to any employee unless the employee has received
19 written notice that reports may be used for employment
20 purposes.
21 (ii) Subparagraph (i) shall not apply with respect
22 to a report about an employee who the employer has
23 reasonable cause to believe has engaged in specific
24 activity which constitutes a violation of the law.
25 (e) Bankruptcy.--A report which contains information about
26 bankruptcy shall cite the chapter of Title 11 of the United
27 States Code under which the bankruptcy action has been filed and
28 is proceeding.
29 Section 4. Investigative reports.
30 (a) General rule.--A user may not procure an investigative
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1 report unless the following are met:
2 (1) It is clearly and accurately disclosed to the
3 subject that an investigative report may be made. Disclosure
4 under this paragraph shall be made in writing to the subject
5 not later than three days after the date on which the report
6 was first requested. The notice required by this paragraph
7 must be in writing and must inform the subject of all of the
8 following:
9 (i) That an investigative report has been requested.
10 (ii) The name and address of the user.
11 (iii) The name and address of the reporting agency.
12 (iv) That a copy of the investigative report and the
13 sources of all the information contained in it is
14 available to the subject upon request.
15 (2) The subject has consented in writing to the
16 procurement of the report.
17 (b) Effect of refusal.--A subject's refusal to consent under
18 subsection (a)(2) constitutes grounds for denial of credit,
19 insurance, employment or any other business transaction.
20 (c) Information to subject.--Within 30 days of a subject's
21 request, the reporting agency shall provide to the subject a
22 copy of the investigative report, the sources of all the
23 information contained in it and the names and business addresses
24 of all users.
25 (d) Restrictions on investigative reports.--
26 (1) No adverse information in the investigative report
27 may be included in a subsequent report unless the adverse
28 information has been verified in the process of making the
29 subsequent report.
30 (2) An investigative report shall be in writing. A copy
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1 of the investigative report shall be retained by the
2 reporting agency for at least one year after it is issued.
3 Section 5. Reporting of obsolete information prohibited.
4 A reporting agency may not make a report containing any of
5 the following items of information:
6 (1) Cases under 11 U.S.C. (relating to bankruptcy) that,
7 from the date of entry of the order for relief, antedate the
8 report by more than ten years.
9 (2) A civil action which, from date of entry of final
10 order, antedates the report by more than seven years.
11 (3) A paid tax lien which, from date of payment,
12 antedates the report by more than seven years.
13 (4) An account placed for collection or charged to
14 profit and loss which, from the day 180 days after the
15 account becomes past due, antedates the report by more than
16 seven years.
17 (5) Criminal history record information which, from date
18 of disposition, including serving the sentence, antedates the
19 report by more than seven years.
20 (6) An account which is not more than 30 days overdue.
21 (7) Any other adverse item or matter which, from the
22 date of resolution, antedates the report by more than six
23 years.
24 Section 6. Disclosures to subjects.
25 (a) General rule.--A reporting agency shall, upon request of
26 a subject, disclose to the subject all of the following:
27 (1) All information in writing in its files on the
28 subject at the time of the request. This paragraph includes
29 medical information, credit score, risk factor rating or
30 other evaluation of a subject's creditworthiness, with a
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1 clear explanation of the credit score, risk factor rating or
2 creditworthiness evaluation and process.
3 (2) The sources of all of the information.
4 (3) The users within the three-year period preceding the
5 request.
6 (4) Detailed identification of any person who had
7 access, directly or indirectly, to any information pertaining
8 to the subject. This paragraph includes:
9 (i) The name of the person and, if applicable, any
10 trade name under which the person conducts business.
11 (ii) The address of the person.
12 (iii) The certified purpose for which the
13 information was obtained and used.
14 (b) Exception.--Subsection (a) shall not apply to
15 information received or information furnished prior to the
16 effective date of this act except to the extent that the matter
17 involved is contained in the files of the reporting agency on
18 the effective date of this act.
19 (c) Explanation.--Disclosure under subsection (a) shall
20 include a written and readily understandable summary of rights
21 and remedies of the subject under this act and a toll-free
22 telephone number which the subject can use to communicate with
23 the reporting agency.
24 (d) Means.--The disclosure required under this section shall
25 be made by any of the following methods:
26 (1) In person if the subject appears in person and
27 furnishes proper identification. In this case, the subject
28 shall be permitted a visual inspection of the file and, upon
29 request, shall be furnished a copy of the entire file or any
30 part of the file.
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1 (2) By telephone if the subject has made a written
2 request for telephone disclosure, and the toll charge for the
3 telephone call is prepaid by or charged directly to the
4 subject. At the time of the disclosure by telephone, the
5 subject shall be advised of the right to receive a complete
6 written disclosure of the information.
7 (3) By mailing a copy or transcription of all
8 information in the subject's file to him if he has made a
9 written request.
10 (e) Assistance.--A reporting agency shall provide trained
11 personnel to explain to subjects any information furnished.
12 Information furnished by mail must be accompanied by an
13 explanation of the information if it is provided in code or
14 trade terminology.
15 (f) Agents.--A subject who seeks disclosure under subsection
16 (d)(1) shall be permitted to be accompanied by one other
17 individual of the subject's choosing. A reporting agency may
18 require the subject to furnish a written statement granting
19 permission to the reporting agency to discuss the subject's file
20 in the presence of the other individual.
21 Section 7. Procedures in case of disputed accuracy.
22 (a) Reinvestigation.--
23 (1) If the completeness or accuracy of an item of
24 information contained in a subject's file at a reporting
25 agency is disputed by the subject and the subject notifies
26 the reporting agency directly of the dispute, the reporting
27 agency shall reinvestigate and record the current status of
28 the disputed information within 30 days from the date the
29 reporting agency receives the notice from the subject. If the
30 reinvestigation and recording is not completed within 30
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1 days, the reporting agency shall delete the disputed
2 information from the subject's file.
3 (2) Within five business days of a reporting agency's
4 receipt of notice of a dispute under paragraph (1), the
5 reporting agency shall notify any person who provided any
6 item of information in dispute.
7 (b) Procedure.--
8 (1) A reporting agency may terminate a reinvestigation
9 under subsection (a) if the reporting agency determines that
10 the dispute is frivolous.
11 (2) Upon making a determination under paragraph (1), a
12 reporting agency shall promptly notify the subject in writing
13 of the determination and the specific reasons for the
14 determination.
15 (3) In conducting a reinvestigation, the reporting
16 agency shall review and properly consider all information
17 submitted by the subject with respect to the disputed
18 information.
19 (c) Deletion of inaccurate or unverifiable information.--
20 (1) If, after a reinvestigation under this section, the
21 information is found to be inaccurate or cannot be verified,
22 the reporting agency shall promptly delete the information
23 from the subject's file.
24 (2) Information that is deleted from any file under
25 paragraph (1) may not be reinserted in the file unless the
26 person who furnishes the information certifies in writing
27 that the information is complete and accurate. If information
28 is reinserted in the file under this paragraph, the reporting
29 agency shall notify the subject of the reinsertion within
30 five days.
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1 (d) Notice of completion of reinvestigation.--
2 (1) A reporting agency shall provide written notice of
3 the results of any reinvestigation under this section within
4 five days of the completion of the reinvestigation.
5 (2) The notice required under this subsection shall
6 include all of the following:
7 (i) A statement that the reinvestigation is
8 completed.
9 (ii) A statement of the determination of the
10 reporting agency on the completeness or accuracy of the
11 disputed information.
12 (iii) A description of the manner in which the
13 information will appear in any subsequent report.
14 (iv) A description of the procedure used to
15 determine the accuracy and the completeness of the
16 information, including the name, business address and
17 telephone number of any person contacted in connection
18 with the information.
19 (v) If the agency has determined that the disputed
20 information is accurate, a statement of the specific
21 reasons for the determination.
22 (vi) A summary of the subject's rights under this
23 act.
24 (vii) A copy of the subject's file.
25 (e) Statement of dispute.--
26 (1) If the reporting agency determines that the dispute
27 if frivolous or if the reinvestigation does not resolve the
28 dispute, the subject may file a brief statement setting forth
29 the nature of the dispute.
30 (2) If a statement of dispute is filed, the reporting
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1 agency shall, in any subsequent report containing the
2 information in question, clearly note that the information is
3 disputed by the subject and shall include in the report the
4 subject's statement and shall notify the provider of the
5 continuing dispute.
6 (f) Users.--Following deletion of information which is found
7 to be inaccurate or whose accuracy can no longer be verified or
8 a notation as to disputed information, the reporting agency
9 shall, at the request of the subject, furnish notification that
10 the item has been deleted or furnish the statement under
11 subsection (e) to any user specifically designated by the
12 subject who has, within the preceding two years, received a
13 report for employment purposes or has, within the preceding six
14 months, received a report for any other purposes, which
15 contained the deleted or disputed information.
16 (g) Follow-up.--A reporting agency shall maintain reasonable
17 procedures designed to prevent the reappearance of information
18 that has been deleted as a result of a dispute.
19 Section 8. Charges for disclosures.
20 (a) Free report.--
21 (1) A reporting agency shall make all disclosures under
22 section 6(a) without charge to the subject if, within 60 days
23 after receipt by the subject of a notification under section
24 9 or notification from a debt collection agency stating that
25 the subject's credit rating may be or has been adversely
26 affected, the subject makes a request under section 6(a) or
27 7.
28 (2) A reporting agency shall furnish all reports under
29 section 7(d) without charge.
30 (3) Upon the request of a subject, a reporting agency
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1 shall make all disclosures under section 6(a) without charge
2 to the subject at least once each year.
3 (b) Reasonable charges.--Except as provided in subsection
4 (a), a reporting agency may impose a reasonable charge for
5 making disclosure to a subject. The charge shall be indicated to
6 the subject prior to making disclosure.
7 Section 9. Use.
8 (a) Notice of adverse action.--
9 (1) If a user takes adverse action with respect to a
10 subject which is based on information contained in a report,
11 the user shall do all of the following:
12 (i) Provide written notice of the adverse action to
13 the subject.
14 (ii) Provide the subject with the name and address
15 of the reporting agency which furnished the report and a
16 toll-free telephone number which the subject can use to
17 communicate with the reporting agency.
18 (iii) Provide the subject with a written summary of
19 the rights and remedies under this act.
20 (2) If credit for personal, family or household purposes
21 is denied or the charge for such credit is increased because
22 of information obtained from a person other than a reporting
23 agency bearing upon the subject's creditworthiness, credit
24 standing, credit capacity, character, general reputation,
25 personal characteristics or mode of living, the user shall,
26 within 30 days, upon the subject's written request for the
27 reasons for the adverse action, disclose the nature of the
28 information to the subject. The user shall disclose to the
29 subject the right to make a written request under this
30 paragraph at the time adverse action is communicated to the
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1 subject.
2 (b) Defense.--No person shall be liable for a violation of
3 this section if the person maintains reasonable procedures to
4 maintain compliance with this section.
5 (c) Transaction not initiated by subject.--A user who
6 utilizes a report for the purpose of soliciting credit or
7 business transactions which are not initiated by the subject
8 shall provide the subject with information about how the subject
9 may have the subject's name removed from solicitation lists by
10 directly initiating contact with the user.
11 Section 10. Responsibilities of providers.
12 (a) General rule.--A provider who, in the course of
13 conducting business, furnishes information about a subject to a
14 reporting agency shall follow reasonable procedures which do all
15 of the following:
16 (1) Assure the maximum possible accuracy of the
17 information.
18 (2) Provide for a prompt reinvestigation and correction
19 of information upon receiving notice from the subject or a
20 reporting agency that the completeness or accuracy of the
21 information is disputed.
22 (b) Complete and accurate information.--
23 (1) A provider may not provide information to a
24 reporting agency which the provider has reasonable cause to
25 believe is incomplete or inaccurate.
26 (2) If a provider has furnished to a reporting agency
27 information which the provider determines or has reason to
28 believe is not complete or accurate, the provider shall
29 promptly notify any reporting agency to which the information
30 has been furnished of the determination or belief together
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1 with corrections of the information.
2 (3) If the completeness or accuracy of information
3 furnished by a provider to a reporting agency continues to be
4 disputed, the provider may not furnish the information to any
5 reporting agency without notice that the information is
6 disputed.
7 (c) Notice to subjects.--A provider who, in the usual course
8 of conducting business, regularly furnishes information about a
9 subject to a reporting agency shall give written notice of that
10 fact to the subject before providing information about the
11 subject to a reporting agency. Written notice provided shall
12 contain the following information:
13 (1) A description of the type of information which may
14 be furnished to a reporting agency.
15 (2) A description of the time or the circumstances under
16 which information is furnished to a reporting agency.
17 (d) Dispute.--Upon receiving notice of a dispute with regard
18 to the completeness or accuracy of information provided by a
19 provider to a reporting agency, the provider shall do all of the
20 following:
21 (1) Complete an investigation with respect to disputed
22 information and report the results of the investigation
23 within 30 days of the date the provider receives the notice.
24 (2) Review all relevant information provided by the
25 subject in connection with the dispute.
26 (3) Provide the subject with a copy of any notice
27 provided under subsection (b)(2) and a list of all reporting
28 agencies to which such notice was transmitted.
29 Section 11. Remedies.
30 (a) Equitable.--The department or a person aggrieved by a
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1 violation of this act may seek an injunction in a court of
2 competent jurisdiction.
3 (b) Legal.--
4 (1) A person aggrieved by a negligent violation of this
5 act may recover in an action in a court of competent
6 jurisdiction all of the following:
7 (i) The greater of:
8 (A) actual damages sustained; or
9 (B) punitive damages in the amount of $1,000.
10 (ii) Attorney fees.
11 (2) A person aggrieved by an intentional or reckless
12 violation of this act may recover in an action in a court of
13 competent jurisdiction all of the following:
14 (i) The greater of:
15 (A) actual damages sustained; or
16 (B) punitive damages in an amount determined by
17 the trier of fact on the basis of the degree of
18 intentional or reckless conduct.
19 (ii) Attorney fees.
20 Section 12. Penalty.
21 A person who intentionally violates this act commits a
22 misdemeanor of the third degree and shall, upon conviction, be
23 sentenced to pay a fine of $2,500 or to imprisonment for not
24 more than one year, or both.
25 Section 13. Administration.
26 In order to administer this act, the department has the
27 following powers and duties:
28 (1) Conduct investigations to determine compliance with
29 this act.
30 (2) Process complaints concerning violations of this
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1 act.
2 (3) Promulgate regulations to implement this act.
3 Section 14. Effective date.
4 This act shall take effect as follows:
5 (1) Section 13(3) and this section shall take effect in
6 60 days.
7 (2) The remainder of this act shall take effect in 240
8 days.
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