The Fair Credit Reporting Act (FCRA) is a federal law of the United States of America. The function of the Fair Credit Reporting Act (FCRA) is to decide the aggregation, distribution and uses of the available customer credit information. It is one of the few laws which act as the basis of the credit rights of the American consumers.
Modes of operation of Fair Credit Reporting Act (FCRA):
As an individual and autonomous entity, FCRA operates with assistances from several Credit Reporting Agencies (CRAs) in America, like Equifax, Experian and TransUnion. The credit reporting agencies are bodies, endowed with the responsibility of gathering and dispersing all consumer-related information, used later for credit assessments and some other purposes.
The consumer databases which are there with these credit reporting agencies actually form the basis of the preparation of credit reports. However, the ultimate decision regarding the setting of norms rests with the Fair Credit Reporting Act.
Relation between information furnishers and Fair Credit Reporting Act:
Several companies, collecting agencies (known as Third Party Collectors), municipal courts or state act as information furnishers, offering information to the consumer reporting agencies.
In fact, they act as creditors, having some kind of credit agreements with the customers. Under the Fair Credit Reporting Act, these information furnishers are no decision-making entities. They can only report to the credit reports of consumers, under certain guidelines laid down by the Act. It is for the FCRA to decide the retention or rejection of the information gathered by the information furnishers.
Outcomes of violating the Fair Credit Reporting Act:
In case the FCRA is violated, Section 602 of the Act allows the consumers to file suit in federal or state courts not only to enforce the Act, but also to claim statutory damages worth a maximum amount of $1000. In addition, he/she may as well ask for financial compensations for the real and punitive damages, fees of the attorney as well as costs for wishful disobedience with the Act.
Companies under the regulation of FCRA: