The “Address Discrepancy Rules” set by the Federal government in the Fair & Accurate Credit Transaction Act (FACT Act) are one of the most common reasons why a flag or alert will appear on a consumer credit report.
The nationwide consumer reporting agencies (“NCRA”, e.g. Experian, Equifax and/or TransUnion) are required to notify all end users of consumer credit reports (including landlords and employers) anytime the address provided when the credit report was requested “substantially differs” from the address the NCRA has in the consumer’s file. The primary purpose of the Address Discrepancy Rules is to enhance the accuracy of consumer reports. They focus on determining whether a notice of address discrepancy indicates that the end user does not have the correct credit report for the consumer they are screening.
Whenever an end user receives a credit report with a notice of address discrepany from an NCRA they are obligated to “develop and implement reasonable policies and procedures” to form a reasonable belief that the consumer credit report is related to the consumer being screened.
The Address Discrepancy Rules are purposefully vague to accommodate a wide variety of businesses and all end users of credit reports are strongly encouraged to review all policies, procedures and documents, including those related to the Address Discrepancy Rules, with a qualified and experienced legal professional. For landlords or employers obtaining credit, compliance means developing and following a set of policies and procedures outlining your response if and when you receive a notice of address discrepancy. Your response could include:
- Asking questions of the consumer to confirm that the content of the credit report pertains to them.
- Cross-checking the current and previous addresses returned on the report with those provided by the consumer.
- Confirming that the information entered when requesting then consumer report is accurate.
- Cross-checking the account information on the consumer report with materials provided by the consumer.
- Using information from the consumer or a third-party to verify that the consumer report pertains to the consumer.
- The regulation also indicates that other “reasonable” authentication procedures may be used.