ID Theft Red Flags FAQ IIB10 – Is a lease offered by a financial institution or creditor a “covered account?”

Compliance > Lending > FCRA
Q:  Is a lease offered by a financial institution or creditor a “covered account?”
 
A:  A lease offered by a financial institution or creditor is an “account” because it involves a continuing relationship established by a person with a financial institution or creditor to obtain a product or service for personal, family, household, or business purposes.  Whether a lease is a “covered account” will depend on its features and risks.  For instance, a lease offered to a consumer by a financial institution or creditor will qualify as a “covered account” under the first part of the definition of “covered account” (set out above under II.B.1).  In contrast, a business-purpose lease is not covered by the first part of the definition because it is not primarily for personal, family, or household purposes.  Instead, each financial institution or creditor must determine which of its business leases, if any, present a reasonably foreseeable risk of identity theft under the second part of the definition of “covered account.”
 
 
ADDITIONAL INFORMATION:
This information was obtained from the Interagency FAQs for Identity Theft Red Flags and Address Discrepancies - https://www.federalreserve.gov/newsevents/pressreleases/files/bcreg20090611a1.pdf
 

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