U.s. Moves To Curb Prying (Press, 17 July 1971)

The issue of invasion of privacy has shifted from a concern that primarily affected the wealthy and famous to a widespread anxiety affecting nearly all adults in America. The rise of credit reporting agencies, now numbering approximately 2,500, coincides with a surge in consumer credit spending reaching about $9,000 million a month. These agencies compile extensive dossiers on individuals, with 105 million Americans already having their personal details recorded by member organisations of the Association of Credit Bureaus of America. The information stored by these agencies includes "hard data," which pertains to concrete details such as employment history and payment records. However, this data is often fraught with inaccuracies due to clerical errors, making it easier to rectify than "soft data," which consists of gossip or subjective opinions about individuals. Despite the significant impact that the information contained in these files can have on people’s lives, the ability to inspect and correct these records has been limited until recently. In April 1971, the Fair Credit Reporting Act was enacted, granting individuals the right to challenge the information held about them. Previously, credit bureaus could distribute dubious information without fear of legal repercussions. With the new legislation, if a credit or employment application is denied based on a report, the individual must be informed of the agency that supplied the information, enabling them to view their file and request corrections. Consumer advocate Ralph Nader commented on the pitfalls of these reports, noting that opinions and hearsay often contribute to inaccuracies. He highlighted the rushed nature of inquiries, which typically allow only about 40 minutes per report, inclusive of travel time. This timeframe does not accommodate thorough fact-checking, allowing for misreporting driven by pressure to meet quotas for derogatory information. One notable case involves the Retail Credit Company, which refused an insurance policy to two women based on unfounded moral criticisms derived from neighbourly gossip. The agency did not allow the women to challenge or understand the basis for this refusal. The Fair Credit Reporting Act requires agencies to verify or delete disputed information, yet critics point out that the sources of the data remain confidential, complicating the accuracy validation process. Professor Alan F. Westin of Columbia University calls for stricter regulations on the type of information that credit agencies can collect and disclose, including necessary mechanisms for individuals to challenge inaccuracies and a public review agency for dispute resolution. The shift towards recognising and protecting individual privacy in the face of pervasive credit reporting practices marks a significant change in American consumer rights.

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