OCC / FCRA – 11. Must disclosures be made when a bank that issues credit cards refuses to honor a credit card or to authorize a merchant to honor one, because of information received from any outside source?

Compliance > FCRA
Q:  Must disclosures be made when a bank that issues credit cards refuses to honor a credit card or to authorize a merchant to honor one, because of information received from any outside source?
 
A:  Yes. The issuer must disclose the name and address of the consumer reporting agency, or the consumer’s right to know the nature of the information when it was received from someone other than a consumer reporting agency. In the latter instance, when a merchant is involved, it appears that the retailer must make disclosures on the issuer’s behalf, since the consumer must receive notice of his/her right “at the time such adverse action is communicated to the consumer.” However, if the information does not bear upon the customer’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living (for example, if the information is merely that the card is lost, stolen, or being used in an unauthorized manner), or if the information is not obtained from an outside source, disclosures would not be required.
 
 
This Q&A was obtained from the Comptroller’s Handbook on Fair Credit Reporting that may be found here:  https://www.occ.gov/publications-and-resources/publications/comptrollers-handbook/files/fair-credit-reporting/index-fair-credit-reporting.html
 
 
 

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