Privacy Rights in Credit Reporting: Federal

David A. Szwak

Privacy Rights in Credit Reporting: Federal

Postby David A. Szwak » Sat Oct 01, 2005 6:44 am

The innate right to privacy or "right to be let alone" from intrusion by fellow private citizens cannot be found in our Constitution. Warren and Brandeis, "The Right to Privacy," 4 Harv.L.Rev. 193.

Yet the basis of this individual right exists and is recognized by courts. Tureen v. Equifax, 571 F.2d 411 (8th Cir. 1978) [Mo.].

Various federal acts protect consumers from invasions of privacy by governmental agencies. See, e.g., 12 U.S.C. 3401, et. seq. [Right to Financial Privacy].

The Fair Credit Reporting Act provides that "...consumer reporting agencies (must) exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy. (emphasis added.)" 15 U.S.C. 1681(a)(4).

Further, "...consumer reporting agencies (must) adopt reasonable procedures for meeting the needs of commerce for consumer credit,... in a manner which if fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information... (emphasis added.)" 15 U.S.C. 1681(b).

In short, federal law fails to provide any real protection to the consumer. Courts have acknowledged that the advent of computerized information storage and retrieval increased the danger of harm to consumers resulting from inaccurate and unwarranted disclosures of personal and credit data. State v. Credit Bureau of Nashua, 342 A.2d 640 (N.H. 1975).

The Court in People v. Blair, 602 P.2d 738 (Cal. 1979), in a criminal setting, found that a credit cardholder had a reasonable expectation of privacy and a correlative right to privacy in the information contained in credit card account and charge receipt records and that same will be kept confidential and not disclosed except if compelled by legal process.

Privacy issues are important in this field, as consumer reports, and their underlying data sources, contain sensitive information about the target of the ultimate consumer report and that information can easily be misused. St. Paul Guardian Ins. Co. v. Johnson, 884 F.2d 881, 884 (5th Cir. 1989) [Tex.]. Some courts have taken the position that credit bureaus do not invade your privacy by collecting and retaining your past credit, medical and insurance histories as long as future disclosure is for a legitimate purpose. Tureen v. Equifax, 571 F.2d 411 (8th Cir. 1978) [Mo.].

Of course, today the consumer reporting superbureaus collect far more data about each American than any one of us could imagine. David Szwak, "Theft of Identity: A Credit Nightmare," Texas Bar Journal, Texas Bar Association, Vol. 56, No. 10, pp.994-999 (November, 1993).

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