GNYADA 2019 Membership Directory & Services Guide

The Address Discrepancy Rule The FCRA imposes specific obligations on users of consumer reports when an address discrepancy is identified by a consumer reporting agency. Together with its Red Flags Rule, the FTC issued a companion rule related to the address discrepancy requirements. The law requires users of consumer reports who receive a notice of address discrepancy from a consumer reporting agency to have reasonable policies and procedures in place to form a reasonable belief that the consumer report relates to the consumer about whom the report was requested. For example, there are multiple John Smiths and the law requires you to take appropriate steps to verify that you have the consumer report for your applicant prior to taking any action based on the consumer report. In addition, dealers who establish a continuing relationship with consumers for whom they have received a notice of address discrepancy and who routinely furnish information to a nationwide consumer reporting agency (Experian, Equifax, Trans Union), must also reasonably verify the accuracy of the address provided by such consumers and furnish the verified address to the nationwide consumer reporting agency that provided the consumer report and notice of address discrepancy. Credit and Debit Cards: Fraud Prevention In an effort to prevent credit card fraud, the industry has moved to credit cards with computer chips (a“chip card”). The use of chip cards requires more sophisticated card readers that can read a random code generated by the device. If you do not have and use such a chip card reader after October 1, 2015, you face the risk of being liable for a fraudulent transaction committed using a chip card. Further, the Fair Credit Reporting Act (FCRA) prohibits printing more than the last five digits of a credit or debit card number or the card’s expiration date on any electronically printed card transaction receipt. Damages for doing so are $100 - $1,000 per receipt for willful violations (generally a knowing or reckless violation) with no cap on damages in a class action. Mastercard and Visa can also assess fines starting at $5,000 for the first violation and going up from there. Make sure your card processing machines are set up to not print any more than the last five numbers and do not print the card’s expiration date. Recommended Practices 1. Create a culture of security at your dealership and get senior management buy-in. Limit permissions to access customer information to only those persons who need access to perform their jobs; require passwords to contain letters, symbols, and numbers and be changed frequently. Know the flow of information that enters your system and monitor for any unusual data flows in or out. These may be signs that a hacker has entered your system and is compromising security. Keep logs of who accesses customer information and when they do so for both electronic and paper files. Train your employees on the importance of safeguarding customer information. Do not leave credit apps or credit reports out in the open or in unsecured file drawers. Consider using processes that can determine if your employees are actually following the policies and procedures in your Information Security Program. Regularly review access logs of the consumer information records and follow up promptly if you see any unusual spikes in any employee or other user accessing customer files. Lock down files at night and on weekends, and implement a “clean desk”policy that requires all paper documents containing customer information to be locked up when not in use.

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