California Private Investigator Practice Exam

Which federal law regulates the accuracy, fairness, and privacy of information maintained by consumer reporting agencies?

1. The Privacy Act

2. The Fair Credit Reporting Act

3. The Consumer Credit Protection Act

4. The Data Protection Act

The correct answer is: The Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) is the federal law that specifically addresses the accuracy, fairness, and privacy of information held by consumer reporting agencies. Enacted in 1970, the FCRA was designed to promote reliability and ensure that consumer information is handled in a responsible manner. One of the key components of the FCRA is that it gives consumers the right to know what information is being collected about them and allows them to dispute inaccuracies in their credit reports. It also outlines the obligations of consumer reporting agencies to maintain accurate records and to ensure that the information is not misused, thereby protecting consumers' rights and promoting transparency in the reporting process. In contrast, the Privacy Act is focused on the federal government's collection, use, and dissemination of personal data, while the Consumer Credit Protection Act is a broader piece of legislation aimed at protecting consumer rights in credit transactions. The Data Protection Act generally refers to regulations concerning data protection and privacy practices in various contexts, but it does not specifically target the regulation of consumer reporting agencies like the FCRA does. Therefore, the Fair Credit Reporting Act is the most relevant law in this context.