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Time limit for providing adverse action notice- question


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This is a strange thing -- I found the section that requires them to notify you of an adverse action, but it doesn't seem to give them a time limit to do it.

§ 615. Requirements on users of consumer reports [15 U.S.C. § 1681m]

(a) Duties of users taking adverse actions on the basis of information contained in consumer reports. If any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, the person shall

(1) provide oral, written, or electronic notice of the adverse action to the consumer;

(2) provide to the consumer orally, in writing, or electronically

(A) the name, address, and telephone number of the consumer reporting agency (including a toll-free telephone number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis) that furnished the report to the person; and

(B) a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken; and

(3) provide to the consumer an oral, written, or electronic notice of the consumer's right

(A) to obtain, under section 612 [§ 1681j], a free copy of a consumer report on the consumer from the consumer reporting agency referred to in paragraph (2), which notice shall include an indication of the 60-day period under that section for obtaining such a copy; and

(B) to dispute, under section 611 [§ 1681i], with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.

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This is a strange thing --

Tell me about it! I've read that FCRA I don't know how many times, and either I'm reading right past it or there just isn't any time requirement imposed for notification of adverse action. I'd hate to go to court on a noncompliance claim for someone not providing the required disclosure and then they just provide it a day before the scheduled court date! :? Seriously though, there's got to be some kind of reasonable time frame for this. One attorney I spoke to today who said he's not up to speed on any recent amendments and such, said he was pretty sure it's 30 days. I talked to the state finance division regarding bank loan transactions and those have a 10 day notice requirement. I just don't know what applies to other users such as insurance companies. I've even read a bunch of opinion letters from the FTC and still nothing that references time frames for compliance. :(

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The only thing I can think of is that you have 60 days to request a copy of your credit report if you have had an adverse action, so that sort of implies that they have to notify you in time for you to get your report.

Unfortunately, that 60 day window to request your free report is based on section 612 2.(B), which just shoots it right back to § 615.

(§ 612. Charges for certain disclosures......(b)Free disclosure after adverse notice to consumer......not later than 60 days after receipt by such consumer of a notification pursuant to section §615.

Notice the "60 days after receipt" has no date certain to calculate from. Only "after receipt" which is anyone's guess how long they have in which provide the notice to you. What really gets me steamed is that if a person isn't aware that this requirment applies to insurance companies, they'll never know without receipt of the adverse action notice what their rights are in this regard. I'm going to call the FTC in the morning to get this answered.

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You need to look under the Equal Credit Opportunity Act.

It states the exact time they have to get back to you AND what they have to provide you with more in depth

That act calls for punitive damages of UP TO $10,000

Check it out.

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15 U.S.C. section 1691:

(2)

Each applicant against whom adverse action is taken shall be entitled to a statement of reasons for such action from the creditor. A creditor satisfies this obligation by -

(A)

providing statements of reasons in writing as a matter of course to applicants against whom adverse action is taken; or

(B)

giving written notification of adverse action which discloses

(i)

the applicant's right to a statement of reasons within thirty days after receipt by the creditor of a request made within sixty days after such notification, and...

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You need to look under the Equal Credit Opportunity Act.

.

:D Thanks for input, but I don't think that applies to insurance. :( It would apply to any type of creditor, but I'm sure insurance companies don't fall under the ECOA. But because they are "users" of credit info they're required to comply with the FCRA.

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the applicant's right to a statement of reasons within thirty days after receipt by the creditor of a request made within sixty days after such notification, and...

Thanks for trying to help! :D Unfortunately, this just gives the requirement set forth for a creditor to meet the required discloser timeframe that has been activated by request by the applicant, but it doesn't address when the creditor has to provide "such notification" after the application was considered. Also as mentioned in a post above, I don't think this applies to insurance companies anyway.

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Does anyone know where I can find info on whether there is any time frame that has to be met to provide an adverse action notice? The adverse action itself triggers the requirement for the CR user to have to provide notice, but within what amount of time? Is there any set time frame?

:!: I just received an e-mail reply from an an attorney who works for a large law firm specializing in FCRA violations. He said it is 30 days. The reply was rather brief and to the point, (the entire reply consisted of "Thirty days. Where are you located?"), but he didn't answer my question about where this time requirement was promulgated. :? I replied to ask again, so hopefully he'll tell me. Also I did specify that my inquiry was as relates to insurance companies.

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I'm going to call the FTC in the morning to get this answered.

:!: Just got a call from the FTC regarding the time frame question as pertains to insurance companies and other non-credit related "users" of CR's. It appears that there may not be any statutory time frame imposed in these situations. He has referred this to someone more knowledgeable in insurance underwriting situations and I'll post as soon as I hear from him / her. He did say that it may fall under generally accepted time frames and he indicated that would be a thirty day time limit as did the attorney that replied to me elsewhere in this thread. Meanwhile the attorney who wrote to me inquired as to what insurance companies I've dealt with, but still didn't say where he gets this 30 day time frame... :x

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15 U.S.C. section 1691:

the applicant's right to a statement of reasons within thirty days after receipt by the creditor of a request made within sixty days after such notification, and...

I'm wondering if by essentially extending credit i.e. writing a policy and creating a contract whereby insurance coverage is extended immediately, but payment is accepted later after the customer is sent a bill for the premium would require that insurance companies be held to this section of Title 15 - where I've bracketed some definitions that could possibly apply:

Sec. 1691a. - Definitions; rules of construction

(d)

The term ''credit'' means the right granted by a creditor to a debtor to [defer payment of debt or to incur debts and defer its payment] or to [purchase property or services] and defer payment therefor.

(e)

The term ''creditor'' means [any person who regularly extends, renews, or continues credit;] any person who regularly arranges for the extension, renewal, or continuation of credit; or any assignee of an original creditor who participates in the decision to extend, renew, or continue credit.

I'm sure that's a stretch, but there has to be some way for consumers to be made aware by the insurance company in a timely manner that they have certain rights under the FCRA.

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That is VERY good thinking. There is absolutely a credit component to an insurance policy where monthly payments are made. Although the credit risk is far less than a credit card (because the insurance can be cancelled for non-payment), a car insurer will tell you that the risk of loss is greater at the beginning of the policy than the end. This is why many insurers use the "rule of 78's" or some other "non pro-rata" method to calculate a refund upon cancellation.

When I get a chance, I will look into your other questions.

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There is absolutely a credit component to an insurance policy where monthly payments are made.

I think the following (below) may also factor in on making the determination on whether they fall under the requirements for creditors. If the definition "any class of credit application" applies to applying for insurance, then the preceding time limit inthat section would also apply.

(All caps on time frame and description added by me for emphasis.)

Sec. 1691. - Scope of prohibition

(d) Reason for adverse action; procedure applicable; ''adverse action'' defined

(1)

WITHIN THIRTY DAYS (or such longer reasonable time as specified in regulations of the Board FOR ANY CLASS OF CREDIT TRANSACTION) after receipt of a completed application for credit, a creditor shall notify the applicant of its action on the application.

Btw, I got a reply from the FCRA attorney who must really see something in this, because he said the companies in question are big enough to "warrant a suit in another state, assuming that there is a good case". He asked where I am located (to see if they are licensed here I presume). He still hasn't answered as to where he gets the thirty day notice requirement though.. :? He asked me to send him documents. That's part of the problem. I have no documents. What I have is a credit inquiry and date of inquiry for each insurance company with which to inquire what there permissible purpose was for pulling my CR. If it was for a quote for insurance, then I fully expect them to provide documentation (the quote). That way I can prove adverse action by either the high premium or that they declined to write a policy for me based in part on my credit score / history. If they can't produce a quote, then I have them for not having permissible purpose :p:twisted:

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The adverse action itself triggers the requirement for the CR user.....

:oops: I'm sorry if I didn't make clear enough in my original post that the question was regarding "users" of credit reports -other than creditors- and in particular insurance companies. I am aware of the 30 day notice for creditors. Thanks for all the input, :D but I still don't have a firm answer on this. No call from the FTC yet either.

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I still think they fall under a creditor because you have to make "APPLICATION" to get their services

I could be wrong but either way.. I think 30 days is fair

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ROCK [insurance company] HARD PLACE!

Does that mean ya think I've got 'em in a tight spot? :D

I finally got an answer from the FCRA attorney about the 30 day time requirement for adverse action notification / disclosure. Just like we all figured-

15 USC 1691(d). 8)

He didn't say why it applies though. :? He's got to be one of the most 'to the point / brief as possible' attorneys I've ever dealt with! Also, no word from the FTC yet.

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I still think they fall under a creditor because you have to make "APPLICATION" to get their services

:) I know you're really trying to help and I truly appreciate it, but I can't find anything that supports that. In fact the insurance industry is actually regulated by the states - not the federal government. Also, IMO the criteria for regulation under the ECOA is based on the definition of creditor and not on the fact that a credit transaction is initiated by an application - because the civil liability results from the creditors actions or noncompliance with the ECOA after application is made. In any articles I've found where both insurance underwriting and ECOA are discussed, it's generally stated that the ECOA does not apply to the insurance industry. Here's a link to Fair Issac discussion of their insurance bureau scoring policies / procedures. Scroll down to: Information Not Used in Fair, Isaac Insurance Bureau Scores about seven paragraphs down.

http://216.239.53.104/search?q=cache:YDEI681H3H4J:www.michigan.gov/documents/cis_ofis_fair_isaac_statement_31825_7.pdf+ECOA+applies+to+insurers&hl=en&ie=UTF-8

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