What Does Permissible Purpose Mean?
The term permissible purpose is defined by the Fair Credit Reporting Act (FCRA) as a reason that a consumer reporting agency may furnish a consumer report to any person or organization. Unless the purpose for furnishing the report is listed as a permissible purpose, it cannot be provided without the individual consumer’s express consent.
WorkplaceTesting Explains Permissible Purpose
The Fair Credit Reporting Act (FCRA) is found at 15 U.S.C. 1681. This act is designed to protect consumers from unfair use of their credit information. In particular, the act addresses the sharing of personal information about consumers by consumer reporting agencies. This defines what is considered a permissible purpose.
A consumer reporting agency is an organization that gathers information about an individual’s financial transactions and shares that information with others. For instance, a consumer reporting agency might receive information from a person’s utility provider, credit card company, landlord, or employer. Then this information would be assembled and sold to another company. This information has become increasingly sought after as a way to assess the suitability of an individual for loans, jobs, and even insurance. TransUnion and Equifax are both consumer reporting agencies.
The Fair Credit Reporting Act required that consumer reporting agencies implement policies and procedures to protect consumer information and comply with the limitations set forth in the act. Among the FCRA’s requirements was that consumer information be protected and kept confidential. In 15 U.S.C. 1681(b), the act lists those circumstances under which a consumer’s credit report may be provided to a third party.
Included among the permissible purposes are when the consumer provides written permission and when disclosure is required by court order. The information may also be provided to prospective creditors, employers, insurers, and others as provided by the act.