Section 603(a) states that "definitions and rules of construction set forth in this section are applicable for the purposes of this title."

Section 603(b) defines person to mean "any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency or other entity."

1. Relation to Other Sections

Certain "persons" must comply with the Act. The term consumer reporting agency is defined in section 603(f) to include certain "persons." Section 619 subjects any "person" who knowingly and willfully obtains information from a consumer reporting agency on a consumer under false pretenses to criminal sanctions. Requirements relating to report users apply to "persons." Section 606 imposes disclosure obligations on "persons" who obtain investigative reports or cause them to be prepared. Section 615(c) uses the term person to denote those subject to disclosure obligations under sections 615(a) and 615(b).

2. Examples

The term "person" includes universities, creditors, collection agencies, insurance companies, private investigators, and employers.

Section 603(c) defines the term consumer to mean "an individual."

1. Relation to Other Sections

The term "consumer" denotes an individual entitled to the Act's protections. Consumer reports, as defined in section 603(d), are reports about consumers. A "consumer" is entitled to obtain disclosures under section 609 from consumer reporting agencies and to take certain steps that require such agencies to follow procedures in section 611, concerning disputes about the completeness or accuracy of items of information in the consumer's file. Disclosures required under section 606 by one procuring an investigative report must be made to the "consumer" on whom the report is sought. Notifications required by section 615 must be provided to "consumers." A "consumer" is the party entitled to sue for willful noncompliance (section 616) or negligent noncompliance (section 617) with the Act's requirements.

2. General

The definition includes only a natural person. It does not include artificial entities (e.g., partnerships, corporations, trusts, estates, cooperatives, associations) or entities created by statute (e.g., governments, governmental subdivisions or agencies).

Section 603(d) defines consumer report to mean "any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for (1) credit or insurance to be used primarily for personal, family, or household purposes, or (2) employment purposes, or (3) other purposes authorized under Section 604" (with three specific exclusions).

1. Relation to "Consumer Reporting Agency"

To be a "consumer report," the information must be furnished by a "consumer reporting agency" as that term is defined in section 603(f). Conversely, the term "consumer reporting agency" is restricted to persons that regularly engage in assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing "consumer reports" to third parties. In other words, the terms "consumer reporting agency" in section 603(f) and "consumer report" in section 603 (d)) are mutually dependent and must therefore be construed together. For example, information is not a "consumer report" if the person furnishing the information is clearly not a "consumer reporting agency" (e.g., if the person furnishing the information does not regularly furnish such information for monetary fees or on a cooperative nonprofit basis).

2. Relation to the Applicability of the Act

If a report is not a "consumer report," then the Act does not usually apply to it. 1 For example, because a commercial credit report is not a report on a consumer, it is not a "consumer report". Therefore, the user need not notify the subject of the name and address of the credit bureau when taking adverse action, and the provider need not omit "obsolete" information, as would be required if the FCRA applied.

1 However, a creditor denying a consumer's application based on a report from a "third party" must give the disclosure required by section 615(b).

3. Report Concerning a "Consumer's" Attributes and History

A. General. A "consumer report" is a report on a "consumer" to be used for certain purposes involving that "consumer."

B. Artificial entities. Reports about corporations, associations, and other collective entities are not consumer reports, and the Act does not apply to them.

C. Reports on businesses for business purposes. Reports used to determine the eligibility of a business, rather than a consumer, for certain purposes, are not consumer reports and the FCRA does not apply to them, even if they contain information on individuals, because Congress did not intend for the FCRA to apply to reports used for commercial purposes (see 116 Cong. Rec. 36572 (1970) (Conf. Report on H.R. 15073)).

4. "(C)redit Worthiness, Credit Standing, Credit Capacity, Character, General Reputation, Personal Characteristics, or Mode of Living * * *"

A. General. To be a "consumer report," the information must bear on at least one of the seven characteristics listed in this definition.

B. Credit guides. Credit guides are listings, furnished by credit bureaus to credit grantors, that rate how well consumers pay their bills. Such guides are a series of "consumer reports," because they contain information which is used for the purpose of serving as a factor in establishing the consumers' eligibility for credit. However, if they are coded (by identification such as social security number, driver's license number, or bank account number) so that the consumer's identity is not disclosed, they are not "consumer reports" until decoded. (See discussion of uncoded credit guides under section 604(3)(A), item 8 infra.)

C. Motor vehicle reports. Motor vehicle reports are distributed by state motor vehicle departments, generally to insurance companies upon request, and usually reveal a consumer's entire driving record, including arrests for driving offenses. Such reports are consumer reports when they are sold by a Department of Motor Vehicles for insurance underwriting purposes and contain information bearing on the consumer's "personal characteristics," such as arrest information. The Act's legislative history indicates Congress intended the Act to cover mutually beneficial exchanges of information between commercial enterprises rather than between governmental entities. Accordingly, these reports are not consumer reports when provided to other governmental authorities involved in licensing or law enforcement activities. (See discussion titled "State Departments of Motor Vehicles," under section 603(f), item 10 infra.)

D. Consumer lists. A list of the names of creditworthy individuals, or of individuals on whom credit bureaus have derogatory information, is a series of "consumer reports" because the information bears on credit worthiness.

E. Public record information. A report solely of public record information is not a "consumer report" unless that information is provided by a consumer reporting agency, is collected or used for the purposes identified in section 603(d), and bears on at least one of the seven characteristics listed in the definition. Public record information relating to records of arrest, or the institution or disposition of civil or criminal proceedings, bears on one or more of these characteristics.

F. Name and address. A report limited solely to the consumer's name and address alone, with no connotations as to credit worthiness or other characteristics, does not constitute a "consumer report," if it does not bear on any of the seven factors.

G. Rental characteristics. Reports about rental characteristics (e.g., consumers' evictions, rental payment histories, treatment of premises) are consumer reports, because they relate to character, general reputation, personal characteristics, or mode of living.

5. "(U)sed or Expected To Be Used or Collected in Whole or in Part for the Purpose of Serving as a Factor in Establishing the Consumer's Eligibility * * *"

A. Law enforcement bulletins. Bulletins that are limited to a series of descriptions, sometimes accompanied by photographs, of individuals who are being sought by law enforcement authorities for alleged crimes are not a series of "consumer reports" because they have not been collected for use in evaluating consumers for credit, insurance, employment or other consumer purposes, and it cannot reasonably be anticipated they will be used for such purposes.

B. Directories. Telephone directories and city directories, to the extent they only provide information regarding name, address and phone number, marital status, home ownership, and number of children, are not "consumer reports," because the information is not used or expected to be used in evaluating consumers for credit, insurance, employment or other purposes and does not reflect on credit standing, credit worthiness, or any of the other factors. A list of names of individuals with checking accounts is not a series of consumer reports because the information does not bear on credit worthiness or any of the other factors. A trade directory, such as a list of all insurance agents licensed to do business in a state, is not a series of consumer reports because it is commercial information that would be used for commercial purposes.

C. Use of prior consumer report in preparation. A report that would not otherwise be a consumer report may be a consumer report, notwithstanding the purpose for which it is furnished, if it includes a prior consumer report or information from consumer report files, because it would contain some information "collected in whole or in part" for consumer reporting purposes. For example, an insurance claims report would be a consumer report if a consumer report (or information from a consumer report) were used to prepare it. (See discussion, infra, in item 6-C under this subsection.)

D. Use of reports for purposes not anticipated by the reporting party. The question arises whether a report that is not otherwise a consumer report is subject to the FCRA because the recipient subsequently uses the report for a permissible purpose. If the reporting party's procedures are such that it neither knows of nor should reasonably anticipate such use, the report is not a consumer report. If a reporting party has taken reasonable steps to insure that the report is not used for such a purpose, and if it neither knows of, nor can reasonably anticipate such use, the report should not be deemed a consumer report by virtue of uses beyond the reporting party's control. A reporting party might establish that it does not reasonably anticipate such use of the report by requiring the recipient to certify that the report will not be used for one of the purposes listed in section 604. (Such procedure may be compared to the requirement in section 607(a), discussed infra, that consumer reporting agencies furnishing consumer reports require that prospective users certify the purposes for which the information is sought and certify that the information will be used for no other purpose.) For example, a claims reporting service could use such a certification to avoid having its insurance claims reports deemed "consumer reports" if the report recipient/insurer were to use the report later for "underwriting purposes" under section 604(3)(C), such as terminating insurance coverage or raising the premium.

6. "(E)stablishing the Consumer's Eligibility for (1) Credit or Insurance To Be Used Primarily for Personal, Family or Household Purposes, or (2) Employment Purposes, or (3) Other Purposes Authorized Under Section 604"

A. Relation to section 604. Because section 603(d)(3) refers to "purposes authorized under section 604" (often described as "permissible purposes" of consumer reports), some of which overlap purposes enumerated in section 603 (e.g., 603(d)(1) and 603(d)(2)), sections 603 and 604 must be construed together, to determine what are "consumer reports" and "permissible purposes" under the two sections. See discussion infra, under section 604.

B. Commercial credit or insurance. A report on a consumer for credit or insurance in connection with a business operated by the consumer is not a "consumer report," and the Act does not apply to it.

C. Insurance claims reports. (It is assumed that information in prior consumer reports is not used in claims reports. See discussion, supra, in item 5-C under this subsection.) Reports provided to insurers by claims investigation services solely to determine the validity of insurance claims are not consumer reports, because section 604(3)(C) specifically sets forth only underwriting (not claims) as an insurance-related purpose, and section 603(d)(1) deals specifically with eligibility for insurance and no other insurance-related purposes. To construe section 604(3)(E) as including reports furnished in connection with insurance claims would be to disregard the specific language of sections 604(3)(C) and 603(d)(1).

D. Scope of employment purpose. A report that is used or is expected to be used or collected in whole or in part in connection with establishing an employee's eligibility for "promotion, reassignment or retention," as well as to evaluate a job applicant, is a consumer report because sections 603(d)(2) and 604(3)(B) use the term "employment purposes," which section 603(h) defines to include these situations.

E. Bad check lists. A report indicating that an individual has issued bad checks, provided by printed list or otherwise, to a business for use in determining whether to accept consumers' checks tendered in transactions primarily for personal, family or household purposes, is a consumer report. The information furnished bears on consumers' character, general reputation and personal characteristics, and it is used or expected to be used in connection with business transactions involving consumers.

F. Tenant screening reports. A report used to determine whether to rent a residence to a consumer is a consumer report, because it is used for a business transaction that the consumer wishes to enter into for personal, family or household purposes.

7. Exclusions From the Definition of "Consumer Report"

A. "(Any) reports containing information solely as to transactions or experiences between the consumer and the person making the report;"--(1) Examples of Sources. The exemption applies to reports limited to transactions or experiences between the consumer and the entity making the report (e.g., retail stores, hospitals, present or former employers, banks, mortgage servicing companies, credit unions, or universities).

(2) Information beyond the reporting entity's own transactions or experiences with the consumer. The exemption does not apply to reports by these entities of information beyond their own transactions or experiences with the consumer. An example is a creditor's or an insurance company's report of the reasons it cancelled credit or insurance, based on information from an outside source.

(3) Opinions Concerning Transactions or Experiences

The exemption applies to reports that are not limited to the facts, but also include opinions (e.g., use of the term "slow pay" to describe a consumer's transactions with a creditor), as long as the facts underlying the opinions involve only transactions or experiences between the consumer and the reporting entity.

B. "(A)ny authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device;"--(1) General. The exemption applies to a credit or debit card issuer's written, oral, or electronic communication of its decision whether or not to authorize a charge, in response to a request from a merchant or other party that the consumer has asked to honor the card.

C. "(A)ny report in which a person who has been requested by a third party to make a specific extension of credit directly or indirectly to the consumer conveys his decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made and such person makes the disclosures to the consumer required under section 615."--(1) General. The exemption covers retailers' attempts to obtain credit for their individual customers from an outside source (such as a bank or a finance company). The communication by the financial institution of its decision whether to extend credit is not a "consumer report" if the retailer informs the customer of the name and address of the financial institution to which the application or contract is offered and the financial institution makes the disclosures required by section 615 of the Act. Such disclosures must be made only when there is a denial of, or increase in the charge for, credit or insurance. (See discussion of section 615, item 10, infra.)

(2) Information included in the exemption. The exemption is not limited to a simple "yes" or "no" response, but includes the information constituting the basis for the credit denial, because it applies to "any report."

(3) How third party creditors can insure that the exemption applies. Creditors, who are requested by dealers or merchants to make such specific extensions of credit, can assure that communication of their decision to the dealer or merchant will be exempt under this section from the term "consumer report," by having written agreements that require such parties to inform the consumer of the creditor's name and address and by complying with any applicable provisions of section 615.

Section 603(e) defines "investigative consumer report" as "a consumer report or portion thereof in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information. However, such information shall not include specific factual information on a consumer's credit record obtained directly from a creditor of the consumer or from a consumer reporting agency when such information was obtained directly from a creditor of the consumer or from the consumer."

1. Relation to Other Sections

The term investigative consumer report denotes a subset of "consumer report" for which the Act imposes additional requirements on recipients and consumer reporting agencies. Persons procuring "investigative consumer reports" must make certain disclosures to the consumers who are the subjects of the reports, as required by section 606. Consumer reporting agencies must comply with section 614, when furnishing "investigative consumer reports" containing adverse information that is not a matter of public record. Consumer reporting agencies making disclosure to consumers pursuant to section 609 are not required to disclose "sources of information acquired solely for use in preparing an investigative consumer report and actually used for no other purpose."

2. General

An "investigative consumer report" is a type of "consumer report" that contains information that is both related to a consumer's character, general reputation, personal characteristics or mode of living and obtained by personal interviews with the consumer's neighbors, friends, associates or others.

3. Types of Sources Interviewed

A report consisting of information from any third party concerning the subject's character (reputation, etc.) may be an investigative consumer report because the phrase "obtained through personal interviews * * * with others" includes any source that is a third party interviewee. A report containing interview information obtained solely from the subject is not an "investigative consumer report."

4. Telephone Interviews

A consumer report that contains information on a consumer's "character, general reputation, personal characteristics or mode of living" obtained through telephone interviews with third parties is an "investigative consumer report," because "personal interviews" includes interviews conducted by telephone as well as in person.

5. Identity of Interviewer

A consumer report is an "investigative consumer report" if personal interviews are used to obtain information reported on a consumer's "character, general reputation, personal characteristics or mode of living," regardless of who conducted the interview.

6. Noninvestigative Information in "Investigative Consumer Reports"

An "investigative consumer report" may also contain noninvestigative information, because the definition includes reports, a "portion" of which are investigative reports.

7. Exclusions From "Investigative Consumer Reports"

A report that consists solely of information gathered from observation by one who drives by the consumer's residence is not an "investigative consumer report," because it contains no information from "personal interviews."

Section 603(f) defines "consumer reporting agency" as "any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports."

1. Relation to Other Sections

A. Duties imposed on "consumer reporting agencies." The Act imposes a number of duties on "consumer reporting agencies." They must have permissible purposes to furnish consumer reports (section 604), avoid furnishing obsolete adverse information in certain consumer reports (sections 605, 607(a)), adopt reasonable procedures to assure privacy (section 604, 607(a)), and accuracy (section 607(b)) of consumer reports, provide only limited disclosures to governmental agencies (section 608), provide consumers certain disclosures upon request (sections 609 and 610) at no cost or for a reasonable charge (section 612), follow certain procedures if a consumer disputes the completeness or accuracy of any item of information contained in his file (section 611), and follow certain procedures in reporting public record information for employment purposes or when reporting adverse information other than public record information in investigative consumer reports (sections 613, 614).

B. Relation to "consumer reports." The term consumer reporting agency, as defined in section 603(f), includes certain persons who assemble or evaluate information on individuals for the purpose of furnishing "consumer reports" to third parties. Conversely, section 603(d) defines the term consumer report to mean the communication of certain information by a "consumer reporting agency." In other words, the terms "consumer report" in section 603(d) and "consumer reporting agency" as defined in section 603(f) are defined in a mutually dependent manner and must therefore be construed together. For example, a party is not a "consumer reporting agency" if it provides only information that is excepted from the definition of "consumer report" under section 603(d), such as reports limited to the party's own transactions or experiences with a consumer, or credit information on organizations.

2. Isolated Reports

Parties that do not "regularly" engage in assembling or evaluating information for the purpose of furnishing consumer reports to third parties are not consumer reporting agencies. For example, a creditor that furnished information on a consumer to a governmental entity in connection with one of its investigations, would not "regularly" be making such disclosure for a fee or on a cooperative nonprofit basis, and therefore would not become a consumer reporting agency, even if the information exceeded the creditor's transactions or experiences with the consumer.

3. Provision of Credit Report to Report Subject

A consumer report user does not become a consumer reporting agency by regularly giving a copy of the report, or otherwise disclosing it, to the consumer who is the subject of the report, because it is not disclosing the information to a "third party."

4. Employment Agency

An employment agency that routinely obtains information on job applicants from their former employers and furnishes the information to prospective employers is a consumer reporting agency.

5. Information Compiled for Insurance Underwriting

A business that compiles claim payment histories on individuals from insurers and furnishes them to insurance companies for use in underwriting decisions concerning those individuals is a consumer reporting agency.

6. Private Investigators and Detective Agencies

Private investigators and detective agencies that regularly obtain consumer reports and furnish them to clients may thereby become consumer reporting agencies.

7. Collection Agencies and Creditors

Collection agencies and creditors become consumer reporting agencies if they regularly furnish information beyond their transactions or experiences with consumers to third parties for use in connection with consumers' transactions.

8. Joint Users of Consumer Reports

Entities that share consumer reports with others that are jointly involved in decisions for which there are permissible purposes to obtain the reports may be "joint users" rather than consumer reporting agencies. For example, if a lender forwards consumer reports to governmental agencies administering loan guarantee programs (or to other prospective loan insurers or guarantors), or to other parties whose approval is needed before it grants credit, or to another creditor for use in considering a consumer's loan application at the consumer's request, the lender does not become a consumer reporting agency by virtue of such action. An agent or employee that obtains consumer reports does not become a consumer reporting agency by sharing such reports with its principal or employer in connection with the purposes for which the reports were initially obtained.

9. Loan Exchanges

Loan exchanges, which are generally owned and operated on a cooperative basis by consumer finance companies, constitute a mechanism whereby each member furnishes the exchange information concerning the full identity and loan amount of each of its borrowers, and receives information from the exchange concerning the number and types of outstanding loans for each of its applicants. A loan exchange or any other exchange that regularly collects information bearing on decisions to grant consumers credit or insurance for personal, family or household purposes, or employment, is a "consumer reporting agency."

10. State Departments of Motor Vehicles

State motor vehicle departments are "consumer reporting agencies" if they regularly furnish motor vehicle reports containing information bearing on the consumer's "personal characteristics," such as arrest information, to insurance companies for insurance underwriting purposes. (See discussion of motor vehicle reports under section 603(d), item 4c supra.)

11. Federal Agencies

The Office of Personnel Management collects and files data concerning current and potential employees of the Federal Government and transmits that information to other government agencies for employment purposes. Because Congress did not intend that the FCRA apply to the Office of Personnel Management and similar federal agencies (see 116 Cong. Rec. 36576 (1970) (remarks of Rep. Brown)), no such agency is a "consumer reporting agency."

12. Credit Application Information

A creditor that provides information from a consumer's application to a credit bureau, for verification as part of the creditor's evaluation process that includes obtaining a report on the consumer from that credit bureau, does not thereby become a "consumer reporting agency," because the creditor does not provide the information for "fees, dues, or on a cooperative nonprofit basis," but rather pays the bureau to verify the information when it provides a consumer report on the applicant.

Section 603(g) defines file, when used in connection with information on any consumer, to mean "all of the information on that consumer recorded and retained by a consumer reporting agency regardless of how the information is stored."

1. Relation to Other Sections

Consumer reporting agencies are required to make disclosures of all information in their "files" to consumers upon request (section 609) and to follow reinvestigation procedures if the consumer disputes the completeness or accuracy of any item of information contained in his "file" (section 611).

2. General

The term file denotes all information on the consumer that is recorded and retained by a consumer reporting agency that might be furnished, or has been furnished, in a consumer report on that consumer.

3. Audit Trail

The term "file" does not include an "audit trail" (a list of changes made by a consumer reporting agency to a consumer's credit history record, maintained to detect fraudulent changes to that record), because such information is not furnished in consumer reports or used as a basis for preparing them.

4. Other Information

The term "file" does not include information in billing records or in the consumer relations folder that a consumer reporting agency opens on a consumer who obtains disclosures or files a dispute, if the information has not been used in a consumer report and would not be used in preparing one.

Section 603(h) defines employment purposes to mean "a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee."

1. Relation to Other Sections

The term employment purposes is used as part of the definition of "consumer reports" (section 603(d)(2)) and as a permissible purpose for the furnishing of consumer reports (section 604(3)(B)). Where an investigative consumer report is to be used for "employment purposes" for which a consumer has not specifically applied, section 606(a)(2) provides that the notice otherwise required by section 606(a)(1) need not be sent. When a consumer reporting agency furnishes public record information in reports "for employment purposes," it must follow the procedure set out in section 613.

2. Security Clearances

A report in connection with security clearances of a government contractor's employees would be for "employment purposes" under this section.

Section 603(i) defines medical information to mean "information or records obtained, with the consent of the individual to whom it relates, from licensed physicians or medical practitioners, hospitals, clinics, or other medical or medically related facilities."

1. Relation to Other Sections

Under section 609(a)(1), a consumer reporting agency must, upon the consumer's request and proper identification, disclose the nature and substance of all information in its files on the consumer, except "medical information."

2. Information From Non-medical Sources

Information from non-medical sources such as employers, is not "medical information."