Video 11 – Government Regulations–FCRA

Transcription of Government Regulations – part 11 of our Consumer Credit Advice video series.

Now we will cover the government regulations on the credit bureaus. When they started, credit bureaus were not regulated. They started as a business, they decided they could do that and started generally with just credit cards and store vending. Then they started thinking how do we know if they are good or not good as communities got bigger and people moved around more. They decided well let’s create a database and we can trade this information back and forth and that grew into this huge industry. Along about 1970, there were a lot of complaints on this industry because it had such a profound effect on our lives. What we can buy, what we can’t buy, what we can do, what we can’t do and there’s a lot of mistakes in those files. Almost 90% of those credit files are full of mistakes. So there was a fear and Congress got together and said let’s make The Fair Credit Reporting Act. We’ve all heard of that. Let’s regulate how they can collect this information, who and under what circumstances they can sell this information and most importantly to us they set standards for the accuracy and the verifiability of the information in that credit file. What that means to us is that if we can test it, they have to be able to prove that it is accurate and verifiable within a reasonable amount of time. If they can’t prove that, they have to remove it from the credit report, ok. Now the nice thing here is, for the same reason that they seem to be very challenged at providing the accurate information on that credit report, we find there’s many circumstances where they can’t verify something that is potentially accurate, Certainly not afraid to jump through that loophole if the opportunity presents itself. So, the object is to audit very intensively all that information and make it very difficult to verify.

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