Comments:

Before The

Federal Trade Commission

FACTA Free File Disclosures Proposed Rule,

Matter No. R411005

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Comments of

ReferencePro

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1620 Grant Ave., Ste 7

Novato, CA 94945

415-493-2118

888-877-0204

Summary of Comments

-   Specialty Consumer Reporting Agencies should be required to accept requests for disclosure from third parties working on the behalf of consumers.

-   Specialty Consumer Reporting Agencies should have the capability to process all requests over the period of a year's time.

Identification and Interest of ReferencePro

ReferencePro is a privately held firm, started by a team with substantial human resources, legal and investigate experience, in tandem with a highly successful software development team. ReferencePro is in the business of verifying past employment history on behalf of consumers and businesses.

Comments

FACTA requires nationwide specialty CRAs to provide consumers, upon request, a free copy of their file disclosures once every 12 months. Nationwide specialty CRAs are CRAs that maintain specific types of files on consumers, such as employment history, tenant history, medical records, and insurance claims. The FTC's proposed rule establishes a "streamlined process" by which consumers may request free file disclosures from nationwide specialty CRAs. Under the proposed rule, each nationwide specialty CRA is required to maintain a toll-free telephone number for such consumer requests.

-   While specialty CRAs are typically not as large as the big credit bureaus, the information they collect, store and report can have greater impact on consumers than credit data. While credit data typically affects consumers' ability to purchase goods, employment data affects consumers' ability to gain employment in their chosen field. Tenant data affects where a consumer can live. However, awareness of these specialty CRAs by consumers lags that of the larger credit bureaus. Further, many of these specialty CRAs do not have the processes and procedures in place to allow consumers to review information that is being reported on them. Indeed, it is frequently much easier for the users of the information to obtain the information than the subject of the reports themselves. Whether deliberately, or inadvertently, many specialty CRAs have implemented procedures for consumers to obtain their own information that are at worst exclusionary, and at best, unwieldy and daunting to the layperson.

ReferencePro supports the proposal for specialty CRAs to be required to develop a "streamlined process," though the myriad of different specialty CRAs complicates establishing a generic model. ReferencePro thereby strongly urges the FTC to explicitly state that third parties in a contractual relationship to represent the consumer are allowed--at the bequest of the consumer--to obtain the free report on the consumer's behalf. Specialty CRAs should be required to provide the information without charge to a third party working on behalf of a consumer.

Further, to prevent abuse, third parties working on behalf of consumers should be required to provide notice to consumers that the information they are obtaining on the consumer's behalf is being provided by the specialty CRA without charge to the third party. While the 3rd party may charge the consumer other fees for services rendered, the consumer should understand that the disclosure is free.

-   The requirement for specialty CRAs to provide a free report to consumers may prove burdensome. Most, if not all specialty CRAs would lack the ability to disclose to every consumer their information the first day, week or even month after the regulation becomes effective. However, there is also burden upon the prospective employee or tenant who is turned down for employment or tenancy because they don't know what information (perhaps false information) is being reported about them.

ReferencePro believes the middle ground would be for every specialty CRA to have the ability to make a free disclosure to every consumer in their file over the course of a year. Obviously, not all consumers will request a free copy of their report, but specialty CRAs should have the ability to handle a monthly volume that would equate to their ability to complete full disclosure within a year's period. Described a different way, specialty CRAs should be required to have the ability to process for free disclosure approximately 8.4% of their files on a monthly basis. If they receive requests from 10% of their database in the first month, approximately 1.6% could be carried over and disclosed the second month, etc.

Summary

Specialty CRAs affect consumers' lives (and livelihood) to an extent not widely appreciated. The FTC should promulgate rules that ensure that the rights of these consumers who are the subject of information held by specialty CRAs are protected. This can be done through mandating that third parties working at the bequest of these consumers are recognized and requiring specialty CRAs to have the ability to disclose their information within a reasonable time period which we suggest is one year.