CFPB Issues Advisory Opinion On Matching And FCRA Accuracy Requirements


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The CFPB recently issued an advisory opinion asserting that a consumer reporting agency (CRA) that uses “name-only matching,” among other inadequate matching procedures, in preparing consumer reports does not satisfy FCRA’s requirement that a CRA use reasonable procedures to assure maximum possible accuracy and that multiple additional elements beyond names often may be required to meet this standard.  The CFPB noted that any inaccurate information in consumer reports may significantly impact consumers and expressed particular concern for such impacts on those already struggling from the COVID-19 pandemic.  The advisory opinion became effective on November 10, 2021.

FCRA requires that CRAs, when preparing consumer reports, must follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.  According to the advisory opinion, CRA matching practices must comply with this obligation, and “name-only matching” is particularly likely to cause inaccuracies in consumer reports and violates this requirement.  Name-only matching describes when a CRA matches information to the particular consumer who is the subject of a consumer report based solely on whether their first and last names are identical or similar to the first and last names associated with the information, without verifying the match using additional identifying information for the consumer, such as address, date of birth, or Social Security number.  According to the CFPB, citing U.S. census data and related studies, the risk of mismatching from name-only matching is likely to be greater for Hispanic, Asian, and Black individuals because there is less last-name diversity in those populations than among the non-Hispanic white population.

CFPB Director Rohit Chopra issued a concurrent statement indicating that he “would warn consumer reporting companies against trying to evade their responsibilities under the FCRA simply by issuing a disclaimer that their report might not be matched to the right person.”  Director Chopra’s statement also warned that “nothing in today’s advisory opinion suggests that the responsibility to follow reasonable procedures to assure maximum possible accuracy can be met with a thoughtless application of any particular loose matching criteria, even if more than names alone are matched.”  The statement concluded with an assertion of the CFPB’s intended additional steps: (i) close collaboration between the CFPB and FTC on enforcement actions, noting that “[i]n the background screening context, the FTC may be able to prosecute unfair or deceptive conduct not covered by the Consumer Financial Protection Act”; (ii) the actions that the CFPB may take to address FCRA violations, including appropriate referrals (such as to the DOJ’s Civil Rights Division) to address potential violations of anti-discrimination laws; and (iii) the CFPB will support the FTC’s work “to monitor business models that rely on harvesting and monetizing personal data” (citing both “Big Tech giants and less well-known data brokers”) and will use its consumer protection tools as well.

The advisory opinion applies to all “consumer reporting agencies” as defined by FCRA.