Session Laws

Whereas, The deferred operation of this act would tend to defeat its purpose, which is to immediately regulate consumer reporting agencies, therefore it is hereby declared to be an emergency law, necessary for the immediate preservation of the public convenience.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 50 of chapter 93 of the General Laws, as appearing in the 1994 Official Edition, is hereby amended by inserting before the definition of "Investigative consumer report" the following definition:-

"Firm offer of credit", any offer of credit to a consumer that will be honored if, based on information in a consumer report on the consumer and other information relative to the creditworthiness of the consumer, the consumer is determined to meet the criteria used to select the consumer for said offer.

SECTION 2. Said section 50 of said chapter 93, as so appearing, is hereby further amended by inserting after the definition of "Person" the following definition:-

"Prescreening", a process whereby a consumer reporting agency compiles or edits for a client a list of consumers who meet specific criteria and provides such list to the client or third party on behalf of the client for the purpose of making a firm offer of credit.

SECTION 3. Said chapter 93 is hereby further amended by striking out section 51, as so appearing, and inserting in place thereof the following two sections:-

Section 51. (a) A consumer reporting agency may furnish a consumer report under the following circumstances and no other:

(1) in response to the order of a court having jurisdiction to issue such an order; or

(2) in accordance with the written instructions of the consumer to whom it relates; or

(3) to a person which it reasonably believes:

(i) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer; or

(ii) intends to use the information for employment purposes; or

(iii) intends to use the information in connection with the underwriting of insurance involving the consumer; or

(iv) intends to use the information in connection with a determination of the consumer's eligibility, or continuing eligibility, for a license or other benefit granted by a governmental instrumentality required by law to consider an applicant's financial responsibility or status; or

(v) intends to use the information in connection with a transaction either entered into or being negotiated with a consumer, if by the terms of the transaction either party transfers an interest in real or personal property, pays money or renders services, or becomes obligated so to transfer property, pay money or render services; provided, however, that the consumer who is the subject of the report, except in the case of the rental or lease of residential property, has provided permission in writing or in the same manner in which the transaction was negotiated or entered into, that a consumer report may be requested in connection with the transaction; or

(vi) intends to use the information for the enforcement of child support orders under chapter one hundred and nineteen A; or

(b) A consumer reporting agency may furnish information for the purposes of a credit transaction under subclause (i) of clause (3) of paragraph (a) where the credit transaction is not initiated by the consumer, only if:

(1) the consumer authorizes the consumer reporting agency to furnish the consumer credit report to the person; or

(2) the proposed transaction involves a firm offer of credit to the consumer, the consumer reporting agency has complied with the provisions of section fifty-one A, and the consumer has not elected to have his name excluded from any list of names provided by the consumer reporting agency for purposes of reporting in connection with the potential issuance of firm offers of credit and the agency only provides the name and address of the consumer and information pertaining to a consumer which is not identified or identifiable with particular accounts or transactions of the consumer.

Section 51A. (a) A consumer may elect to have his name and address excluded from any list provided by a consumer reporting agency pursuant to clause (2) of paragraph (b) of section fifty-one by notifying the consumer reporting agency, by telephone or in writing, through the notification system maintained by the consumer reporting agency pursuant to paragraph (c), that the consumer does not consent to any use of consumer reports relating to the consumer in connection with any transaction that is not initiated by the consumer.

(b) An election by a consumer under this section shall be effective with respect to a consumer reporting agency, and any affiliate of the consumer reporting agency, on the date on which the consumer notifies the consumer reporting agency.

(c) Each consumer reporting agency that provides prescreening lists under clause (2) of paragraph (b) of section fifty-one in connection with a credit transaction not initiated by the consumer shall establish and maintain a notification system, including a toll-free telephone number, which permits any consumer, with appropriate identification and for whom the consumer reporting agency has a file, to notify the consumer reporting agency of the consumer's election to have the consumer's name removed from any list of names and addresses provided by the consumer reporting agency. Each consumer reporting agency which compiles and maintains files on consumers on a nationwide basis shall establish and maintain a notification system jointly with its affiliated consumer reporting agencies.

(d) Any person who uses a consumer report in connection with any credit transaction not initiated by the consumer and which consists of a firm offer of credit shall provide with any solicitation made to the consumer a clear and conspicuous statement that the consumer has a right to prohibit the use of information contained in the consumer's file with any consumer reporting agency in connection with any credit transaction that is not initiated by the consumer. Said statement shall inform the consumer that he may exercise this right by notifying the consumer reporting agency by employing the notification system or joint notification system established under paragraph (c). A consumer may cancel or review his decision to have his name removed from prescreening lists provided under clause (2) of paragraph (b) of section fifty-one by notifying the consumer reporting agency through the notification system established under said paragraph (c). Nothing in this paragraph shall preclude a person who uses a consumer report in connection with credit transactions not initiated by the consumer from establishing a notification system, pursuant to paragraph (c) and provide such toll-free telephone number on any solicitation pursuant to this paragraph, which allows the person to notify each applicable consumer reporting agency on the consumer's behalf after receiving notice from the consumer of his election to have his name removed from such prescreening list or of the consumer's decision to review or cancel such a removal.

SECTION 4. Said chapter 93 is hereby further amended by striking out section 53, as so appearing, and inserting in place thereof the following section:-

Section 53. (a) A person may not procure or cause to be prepared an investigative consumer report on any consumer unless:

(1) it is clearly and accurately disclosed in writing to the consumer, prior to requesting the consumer reporting agency to prepare the report, that an investigative consumer report commonly includes information as to the consumer's character, general reputation, personal characteristics, and mode of living, and the disclosure includes the precise nature and scope of the investigation requested and the right to have a copy of the report upon request; and

(2) the consumer provides the person requesting the report written permission to obtain the investigative consumer report prior to the person making such request to the consumer reporting agency.

(b) The consumer reporting agency shall upon the request of the consumer provide to the consumer a copy of such report upon its completion.

(c) No person may be held liable for any violation of paragraph (a) if he proves by a preponderance of the evidence that at the time of the violation he maintained reasonable procedures to assure compliance with said paragraph (a).

SECTION 5. Said chapter 93 is hereby further amended by inserting after section 54, as so appearing, the following section:-

Section 54A. (a) Every person who furnishes information to a consumer reporting agency shall follow reasonable procedures to ensure that the information reported to a consumer reporting agency is accurate and complete. No person may provide information to a consumer reporting agency if such person knows or has reasonable cause to believe such information is not accurate or complete.

(b) A person who (1) in the ordinary course of business regularly and on a routine basis furnishes information to one or more consumer reporting agencies about the person's own transactions or experiences with one or more consumers, and (2) determines that information on a specific transaction or experience so provided to a consumer reporting agency is not complete or accurate, shall promptly notify the consumer reporting agency of such determination and provide to the consumer reporting agency any corrections to that information, or any additional information, which is necessary to make the information provided by the person to the consumer reporting agency complete and accurate.

(c) While the completeness or accuracy of any information on a specific transaction or experience furnished by any person to a consumer reporting agency is subject to a continuing bona fide dispute between the affected consumer and that person, the person may not furnish the information to any consumer reporting agency without also including a notice that the information is disputed by the consumer; provided further, that no person may report to a consumer reporting agency that a consumer's account is delinquent until said bona fide dispute is resolved pursuant to the federal Fair Credit Billing Act.

(d) A person who regularly furnishes information to a consumer reporting agency regarding a consumer who has an open-end credit account with such person, and which account is closed by the consumer, shall notify the consumer reporting agency of the closure of such account by the consumer, in information regularly furnished for the period in which the account is closed.

(e) A person who places a delinquent account for collection, internally or by referral to a third party, charges the delinquent account to profit or loss, or takes similar action, and subsequently furnishes information to a consumer reporting agency regarding such action, shall include within the information furnished, the approximate commencement date of the delinquency which gave rise to such action, unless such date was previously reported to the consumer reporting agency. Nothing contained in this paragraph shall be deemed to require that a delinquency must be reported to a consumer reporting agency.

(f) Upon receiving notice of a dispute notice pursuant to paragraph (a) of section fifty-eight with regard to the completeness or accuracy of any information provided to a consumer reporting agency, the person that provided the information shall (1) complete an investigation with respect to the disputed information and report to the consumer reporting agency the results of that investigation before the end of the thirty-business-day period beginning on the date the consumer reporting agency receives the notice of dispute from the consumer in accordance with paragraph (a) of section fifty-eight and (2) review relevant information submitted to it.

(g) A person who furnishes information to a consumer reporting agency shall be liable for failure to comply with the provisions of this section, unless the person so furnishing the information establishes by a preponderance of the evidence that, at the time of the failure to comply with this section, such person maintained reasonable procedures to comply with such provisions.

SECTION 6. Said chapter 93 is hereby further amended by striking out section 56, as so appearing, and inserting in place thereof the following section:-

Section 56. (a) Every consumer reporting agency shall, upon request and proper identification of any consumer, clearly and accurately disclose to the consumer:

(1) the nature, contents and substance of all information, except medical information, in its file on the consumer at the time of the request, and which is obtainable based upon the identifying information supplied by the consumer when making such request, and if such consumer has made a written request, deliver a written copy or photocopy of all such information except any code identifications which are used solely for purposes of transferring such information to and from consumer reporting agencies; provided, however, that the names of the users corresponding to the code identifications shall be disclosed to the consumer; provided, further, that the agency shall provide a clear, simple and plain meaning explanation of the information provided under this paragraph and such explanation shall be in a readable format and type, which shall in no case be smaller than ten point type;

(2) the sources of all credit information obtained through routine credit reporting or through any other credit reporting techniques in the file at the time of the request, except that the sources of information acquired solely for use in preparing an investigative consumer report and actually used for no other purpose need not be disclosed; provided, however, that in the event an action is brought pursuant to section sixty-five, such sources shall be available to the plaintiff under appropriate discovery procedures in the court in which the action is brought; and

(3) the recipients of any consumer report on the consumer which it has furnished for employment purposes within the two year period preceding the request, and for any other purpose within the six-month period preceding the request.

(b) Every consumer reporting agency, upon contact by a consumer by phone, mail, or in person regarding information which may be contained in the agency files regarding that consumer, shall with each written disclosure, or in response to a request by the consumer to be advised as to his rights, promptly advise the consumer of the consumer's rights under this section. The written notice shall be in a clear and conspicuous format and be no smaller than ten point type. The notice shall inform the consumer of the consumer's rights under this chapter, provided in a clear and conspicuous manner, in substantially the following manner:

"You have a right to obtain a copy of your credit file from a consumer credit reporting agency. You may be charged a reasonable fee not exceeding eight dollars. There is no fee, however, if you have been turned down for credit, employment, insurance, or rental dwelling because of information in your credit report within the preceding sixty days. The consumer credit reporting agency must provide someone to help you interpret the information in your credit file. Each calendar year you are entitled to receive, upon request, one free consumer credit report.

You have a right to dispute inaccurate information by contacting the consumer credit reporting agency directly. However, neither you nor any credit repair company or credit service organization has the right to have accurate, current, and verifiable information removed from your credit report. In most cases, under state and federal law, the consumer credit reporting agency must remove accurate, negative information from your report only if it is over seven years old, and must remove bankruptcy information only if it is over ten years old.

If you have notified a consumer credit reporting agency in writing that you dispute the accuracy of information in your file, the consumer credit reporting agency must then, within thirty business days, reinvestigate and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service. Any pertinent information and copies of all documents you have concerning a dispute should be given to the consumer credit reporting agency.

If reinvestigation does not resolve the dispute to your satisfaction, you may send a statement to the consumer credit reporting agency to keep in your file, explaining why you think the record is inaccurate. The consumer credit reporting agency must include your statement about the disputed information in a report it issues about you.

You have a right to receive a record of all inquires relating to a credit transaction initiated in the six months preceding your request, or two years in the case of a credit report used for employment purposes. This record shall include the recipients of any consumer credit report.

You have the right to opt out of any prescreening lists compiled by or with the assistance of a consumer credit reporting agency by calling the agency's toll-free telephone number or contacting the agency in writing. You may be entitled to collect compensation, in certain circumstances, if you are damaged by a person's negligent or intentional failure to comply with the provisions of the credit reporting act".

SECTION 7. Section 57 of said chapter 93, as so appearing, is hereby amended by inserting after the word "provide", in line 13, the following words:- a toll-free telephone number and.

SECTION 8. Said chapter 93 is hereby further amended by striking out sections 58 and 59, as so appearing, and inserting in place thereof the following two sections:-

Section 58. (a) If the completeness or accuracy of any item of information in his file is disputed by a consumer, and such dispute is directly conveyed to the consumer reporting agency by the consumer, the consumer reporting agency shall within a reasonable period of time, but not to exceed thirty business days beginning on the date the consumer reporting agency receives notice from the consumer, reinvestigate and record the current status of such information unless it has reasonable grounds to believe that the dispute is frivolous or irrelevant; including by reason of a failure of the consumer to provide sufficient information, as requested by the consumer reporting agency, to resolve the dispute. Unless the consumer reporting agency determines that the dispute is frivolous or irrelevant before the end of the five business day period beginning on the date the consumer reporting agency receives notice of the dispute under this section, the agency shall notify any person who provided the information in dispute at the address provided by the person. A consumer reporting agency may require that disputes by consumers be in writing.

(b) If the consumer reporting agency determines that the dispute is frivolous or irrelevant, it shall notify the consumer by mail or, if authorized by the consumer for that purpose, by any other means available to the consumer reporting agency, within five business days after the determination is made that it is terminating its reinvestigation of the item of information. In this notification the consumer reporting agency shall state the specific reasons why it has determined that the consumer's dispute is frivolous or irrelevant. The presence of contradictory information in the consumer's file shall not in and of itself constitute grounds for believing the dispute to be frivolous or irrelevant.

(c) If after such reinvestigation such information is found to be inaccurate or can no longer be verified, the consumer reporting agency shall within three business days delete such information.

(d) If the reinvestigation does not resolve the dispute, the consumer may file a statement setting forth the nature of the dispute.

(e) Within ten business days after completion of a reinvestigation, the agency shall provide the consumer with written information, free of charge, that includes: (1) a statement that the reinvestigation is completed, (2) a consumer report that is based on the consumer's file as that file is revised as a result of the reinvestigation, (3) a description or indication of any changes made in the consumer report as a result of such revisions, (4) notice that, if requested by the consumer, a description of the procedure used to determine the accuracy and completeness of the information shall be provided to the consumer by the consumer reporting agency, including the business name, address, and telephone number of any furnisher of information contacted in connection with such information, (5) notice that the consumer has the right to add a statement to the consumer's file disputing the accuracy or completeness of the information, (6) notice that the consumer has the right to request that the consumer reporting agency furnish notifications under paragraphs (g) and (i), and (7) notice that the consumer has a right to obtain all information required to be disclosed under section fifty-six.

(f) Whenever a statement of dispute is filed, the consumer reporting agency shall, in any subsequent consumer report containing the information in question, clearly note that it is disputed by the consumer and provide the consumer's statement as part of its report.

(g) Following any deletion of information which is found not to be accurate, or whose accuracy can no longer be verified, the consumer reporting agency shall, upon the request of the consumer, within fifteen business days, furnish notification to any person who has within two years prior thereto received a consumer report for employment purposes, or within six months prior thereto received a consumer report for any other purpose, which contained the deleted item, that the item has been deleted.

(h) A consumer reporting agency shall accept the consumer's version of the disputed information and correct or delete the disputed item when the consumer submits to the consumer reporting agency documentation obtained from the source of the item in dispute or from public records confirming that the report was inaccurate or incomplete, unless the consumer reporting agency in good faith has substantial reason to doubt the authenticity of the documentation, or the completeness of the information provided.

(i) No information may be reinserted in a consumer's file after having been deleted pursuant to this section unless the person who furnishes the information to be reinserted verifies that the information is accurate. If any information so deleted from a consumer's file is reinserted in the file, the consumer reporting agency shall promptly notify the consumer of the reinsertion in writing or, if authorized by the consumer for that purpose, by any other means available to the consumer reporting agency. As part of, or in addition to, said notice the consumer reporting agency shall, within five business days of reinserting the information, provide, in writing to the consumer: (1) a statement that the disputed information has been reinserted; (2) a notice that the agency will provide to the consumer, within fifteen days following a request, the name, address, and telephone number of any furnisher of information contacted or which contacted the consumer reporting agency in connection with the reinsertion; (3) the toll-free telephone number of the consumer reporting agency that the consumer may use to obtain such name, address, and telephone number; and, (4) a notice that the consumer has the right to add a statement to his file disputing the accuracy or completeness of the information.

Section 59. (a) A consumer reporting agency shall make all disclosures pursuant to section fifty-six without charge to the consumer if, within sixty days after receipt by such consumer of a notification pursuant to section sixty-two or notification from a debt collection agency affiliated with such consumer reporting agency stating that the consumer's credit rating may be or has been adversely affected, the consumer makes a request under section fifty-six.

(b) Except as provided in paragraph (c), a consumer reporting agency shall not charge a consumer for any disclosures or a copy of a consumer report requested pursuant to section fifty-eight.

(c) Except as otherwise provided, the consumer reporting agency may impose a reasonable charge, not to exceed eight dollars: (1) for making disclosures to a consumer pursuant to section fifty-six, the charge for which shall be indicated to the consumer prior to making disclosure; and (2) for furnishing notifications, statements, or summaries, to a person pursuant to paragraph (g) of section fifty-eight, the charge for which shall be indicated to the consumer prior to furnishing such information.

(d) Each consumer reporting agency which compiles and maintains files on consumers on a nationwide basis shall furnish without charge to any consumer who has provided verification of his identity and who meets other requirements as set forth in section fifty-seven and who requests a copy of his consumer report, one complete consumer report per calendar year.

(e) Each consumer reporting agency which does not compile and maintain files on consumers on a nationwide basis shall furnish, for a charge not to exceed five dollars, to any consumer who has provided verification of his identity and who meets other requirements as set forth in section fifty-seven and who requests a copy of his consumer report, one complete consumer report per calendar year.

SECTION 9. Section 60 of said chapter 93, as so appearing, is hereby amended by adding the following paragraph:-

A consumer reporting agency which furnishes a consumer report for employment purposes shall enter into an agreement with the user of such consumer report which provides that no consumer report may be requested by the user until and unless the user has provided written notice to the employee or prospective employee that a consumer report regarding the employee will be requested. For current employees, notification in an employee manual shall be sufficient for the purposes of this section.

SECTION 10. Said chapter 93 is hereby further amended by inserting after section 60, as so appearing, the following section:-

Section 60A. A consumer reporting agency which compiles and reports items of information on consumers which are matters of public record, for the purpose of furnishing a consumer report, shall:

(a) Maintain reasonable procedures designed to insure that whenever public record information is reported, in a consumer report, it is complete and up to date to the extent practicable. It shall be deemed a reasonable procedure for a consumer reporting agency to accurately report the status of public record information as of the date recorded in its files provided that such information is updated on a regular basis.

(b) When conducting a reinvestigation as required by paragraph (a) of section fifty-eight, a consumer reporting agency shall promptly record and report the current status of the public record.

Nothing contained in this section shall permit the use of public record information otherwise prohibited under section fifty-two.

SECTION 11. Section 62 of said chapter 93, as so appearing, is hereby amended by striking out subsection (a) and inserting in place thereof the following subsection:-

(a) Whenever credit or insurance for personal, family or household purposes, or employment involving a consumer is denied or terminated or the charge for such credit or insurance is increased either wholly or partly or whenever a consumer's line of credit is reduced, except when the consumer is delinquent with regard to such line of credit, because of information contained in a consumer report from a consumer reporting agency, the user of the consumer report shall, within ten business days of its decision to deny or terminate such credit, insurance or employment, or to increase the charge for such credit or insurance, or to reduce a consumer's line of credit, except when the consumer is delinquent with regard to such line of credit, notify such consumer in writing against whom such adverse action has been taken. Said notice shall be in a clear and conspicuous format, no smaller than ten point type, and shall contain the name, address, and toll-free telephone number of any consumer reporting agency which provided any consumer report which was reviewed or otherwise taken into account in the making of such adverse action and shall inform the consumer of his rights in substantially the following manner:

"You have the right to obtain a free copy of your credit report within sixty days from the consumer credit reporting agency which has been identified on this notice. The consumer credit reporting agency must provide someone to help you interpret the information on your credit report. Each calendar year you are entitled to receive, upon request, one free consumer report.

You have the right to dispute inaccurate information by contacting the consumer credit reporting agency directly. If you have notified a consumer credit reporting agency in writing that you dispute the accuracy of information in your file, the agency must then, within thirty business days, reinvestigate and modify or remove inaccurate information. The consumer credit reporting agency may not charge a fee for this service.

If reinvestigation does not resolve the dispute to your satisfaction, you may send a statement to the consumer credit reporting agency, to be kept in your file, explaining why you think the record is inaccurate. The consumer credit reporting agency must include your statement about the disputed information in a report it issues about you".

SECTION 12. Section 63 of said chapter 93, as so appearing, is hereby amended by striking out, in line 1, the word "or", and inserting in place thereof the following words:- , person who furnishes information to any consumer reporting agency, or.

SECTION 13. Section 64 of said chapter 93, as so appearing, is hereby amended by striking out, in line 1, the word "or" and inserting in place thereof the following words:- , person who furnishes information to any consumer reporting agency, or.

SECTION 14. This act shall take effect on January thirty-first, nineteen hundred and ninety-six.