First American Real Estate Solutions, LLC; Analysis To Aid Public Comment

FEDERAL TRADE COMMISSION

[File No. 952-3267]

First American Real Estate Solutions, LLC; Analysis To Aid Public

Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed Consent Agreement.

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SUMMARY: The consent agreement in this matter settles alleged

violations of federal law prohibiting unfair or deceptive acts or

practices or unfair methods of competition. The attached Analysis to

Aid Public Comment describes both the allegations in the draft

complaint that accompanies the consent agreement and the terms of the

consent order--embodied in the consent agreement--that would settle

these allegations.

DATES: Comments must be received on or before January 4, 1999.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary,

Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: David Medine or Thomas Kane, FTC/S-

4429, Washington, D.C. 20580. (202) 326-3224.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal

Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46 and Section 2.34 of

the Commission's Rules of Practice (16 CFR 2.34), notice is hereby

given that the above-captioned consent agreement containing a consent

order to cease and desist, having been filed with and accepted, subject

to final approval, by the Commission, has been placed on the public

record for a period of sixty (60) days. The following Analysis to Aid

Public Comment describes the terms of the consent agreement, and the

allegations in the complaint. An electronic copy of the full text of

the consent agreement package can be obtained from the FTC Home Page

(for October 28, 1998), on the World Wide Web, at ``http:/www.ftc.gov/

os/actions97.htm.'' A paper copy can be obtained from the FTC Public

Reference Room, Room H-130, Sixth Street and Pennsylvania Avenue, N.W.,

Washington, D.C. 20580, either in person or by calling (202) 326-3627.

Public comment is invited. Such comments or views will be considered by

the Commission and will be available for inspection and copying at its

principal office in accordance with Section 4.9(b)(6)(ii) of the

Commission's Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order To Aid Public Comment

The Federal Trade Commission has accepted an agreement, subject to

final approval, to a proposed consent order from First American Real

Estate Solutions, LLC (``FARES''). The proposed order would settle

charges that First American CREDCO (``CREDCO''), which is now a

division of FARES, violated the Fair Credit Reporting Act (``FCRA'').

The FCRA requires, inter alia, that consumer reporting agencies such as

CREDCO reinvestigate items that consumers dispute on their consumer

reports and correct or delete items that are inaccurate.

The proposed consent order has been placed on the public record for

sixty (60) days for reception of comments by interested persons.

Comments received during this period will become part of the public

record. After sixty (60) days, the Commission will again review the

agreement and the comments received and will decide whether it should

withdraw from the agreement or make final the agreement's proposed

order.

According to the complaint, one of the consumer report products

that CREDCO produces is the Instant Merge Report (``IMR''). IMRs

contain blended consumer account information from two or three of the

national consumer reporting agencies (``repositories''), Trans Union,

Equifax, and Experian. The complaint alleges that, in connection with

its IMRs, CREDCO (1) failed to reinvestigate disputed information, (2)

failed to correct or delete information in consumers' files that CREDCO

found to be inaccurate or obsolete or whose accuracy can no longer be

verified, and (3) failed to include in subsequent IMRs a notation that

a consumer disputes an item and a statement by the consumer setting

forth the nature of the dispute or a codification or summary of that

statement. According to the complaint, these practices violated Section

611 of the FCRA, 15 U.S.C. 1681i.

The complaint also alleges that CREDCO failed to follow reasonable

procedures to prevent information that CREDCO has found to be

inaccurate or obsolete, or whose accuracy could not be verified, from

appearing on subsequent IMRs. According to the complaint, these

practices violated Section 607(b) of the FCRA, 15 U.S.C. 1681e(b).

Pursuant to Section 621(a)(1) of the FCRA, 15 U.S.C. 1681s(a)(1),

all violations of the FCRA constitute unfair or deceptive acts or

practices in commerce in violation of Section 5(a) of the Federal Trade

Commission Act (``FTC Act''), 15 U.S.C. 459a). Thus, the complaint also

alleges that CREDCO violated Section 5(a).

The proposed order contains injunctive provisions designed to

remedy the violations charged and to prevent respondent FARES from

engaging in similar acts and practices in the future. Specifically, the

order would require that FARES (1) reinvestigate consumer report items

that consumers dispute and record the current status of the items or

delete them; (2) within five business days after receiving a consumer

dispute, notify the furnisher that the item is disputed; (3) ``review

and consider'' all relevant information submitted by consumers in

connection with their disputes; (4) maintain reasonable procedures

designed to prevent the reappearance in a consumer's file, and in

consumer reports on the consumer, of information that has been deleted;

and (5) notify a consumer, within five business days after it completes

a reinvestigation, (a) that the consumer has the right to file a

dispute statement, and (b) that the consumer has the right to request

that FARES provide either a notice that the item has been corrected or

deleted, or the consumer's dispute statement, to any person

specifically designated by the consumer who has received a consumer

report that contained the deleted or disputed information within two

years prior to the consumer's request, for employment purposes, or

within six months prior to the consumer's request, for any other

purpose.

The proposed order also would require FARES to permit a consumer to

file a dispute statement if its reinvestigation does not resolve the

consumer's dispute. If the dispute statement is neither frivolous nor

irrelevant, the proposed order would require FARES to include the

statement, or a codification or summary of the statement, in all

subsequent consumer reports that FARES prepares concerning the consumer

that contain the disputed item. The proposed order also would require

FARES, at the request of a consumer, to provide a notification that a

disputed item has been corrected or deleted, or the consumer's dispute

statement or a codification or summary of the statement, to any person

specifically designated by the consumer who has received a consumer

report that contained the deleted or disputed

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information within two years prior to the consumer's request, for

employment purposes, or within six months prior to the consumer's

request, for any other purpose.

The proposed order also includes a number or recordkeeping and

reporting requirements designed to assist the Commission in monitoring

FARES's compliance.

Congress amended the FCRA in September 1996; the amendments became

effective in September 1997. Because the practices of CREDCO that

allegedly violated the FCRA occurred prior to September 1997, the

complaint alleges violations of the pre-amendment FCRA only. The

proposed order, however, requires FARES to comply with the post-

amendment FCRA and any future FCRA amendments.

The purpose of this analysis is to facilitate public comment on the

proposed order, and it is not intended to constitute an official

interpretation of the agreement and proposed order or to modify in any

way its terms.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 98-29514 Filed 11-3-98; 8:45 am]

BILLING CODE 6750-01-M