Be aware of ‘specialty’ credit reports

But most consumers have no clue about the existence of so-called “specialty” reports — until they’ve been denied jobs, mortgages, insurance or apartment rentals.

“You could say that they are the unknown consumer report,” said Paul Stephens director of policy and advocacy at the Privacy Rights Clearinghouse, a nonprofit consumer group. “It’s grown tremendously, and it just does not get the media attention that credit reports receive.

“It’s quite important because what you find in these reports can affect numerous things,” Stephens said: “How much you pay for insurance; whether or not you can get a job; whether you can open a bank account, and many other things.”

And just as it does with credit reports, the federal Fair Credit Reporting Act gives consumers the right to one free copy a year of each of these lesser-known dossiers. The problem is that there is no central source for free specialty reports. Requests must be made to each company, and there can be dozens.

FTC regulations don’t require these companies to create Web sites or facilitate mail-in requests. The only mandate is that they create a toll-free number, published where the company does business.

The files they accrue can be a compilation of publicly available data gleaned from all over: real estate transaction and ownership data; lien, legal judgment and bankruptcy records; and professional licenses. Or they can contain more private details compiled from insurance files and medical applications and prescriptions.

The amount of information and the places to get it can be overwhelming. Here’s a quick rundown of some major players:

● LexisNexis and ChoicePoint build wide-ranging databases used for identity checks, employee screenings, collecting debt and more.

● The Medical Information Bureau keeps information about health conditions and lifestyles. Its files don’t contain medical specifics, but they use codes for specific conditions and risky lifestyles, such as skydiving or smoking. Each time an applicant for life or medical insurance fills out forms disclosing significant illnesses, accidents and other details, that coded medical underwriting information is sent to MIB, which has about 750 health, life, disability and long-term care insurer members.

● Milliman and Ingenix provide risk analysis for insurance companies by compiling prescription drug histories they glean from insurance company pharmacy benefit managers.

● A-PLUS and CLUE reports, providing information about paid insurance claims, are used by insurers to determine the risk level of applicants for home and auto coverage.

● Shared Check Authorization Network and TeleCheck maintain databases of returned checks and instances of fraud. The companies verify checks for member retailers.

Then there are dozens of background-check and tenant-screening companies. The National Association of Professional Background Screeners has more than 300 members.

The proliferation of data gatherers has some privacy experts concerned.

“I’m certain there are other consumer reports we just don’t know about,” Stephens said. “For example, the medical prescription history reports were pretty much unknown. This was going on in the background.”

In 2007, the FTC ruled that Milliman and Ingenix, which collect prescription drug data, had to comply with the file disclosure requirements of the fair credit law.

“I wouldn’t be surprised if there aren’t a number of consumer reporting agencies out there that aren’t complying,” Stephens said.

FTC spokesman Frank Dorman encourages consumers to act on any concerns.

“If they follow the process and are not satisfied, they should let the FTC know,” he said. “If they want to file a complaint about a company they feel may be violating the law, we certainly want to hear from them.”

Pamela Devata, a partner in the labor and employment department of Seyfarth Shaw law firm in Chicago, believes most companies are complying. And the law, she said, has a system in place to help consumers.

“There are checks and balances,” said Devata, who has represented providers of background information and been on the board of the background screeners group. “It’s just a question if people know about them or not.”

If an employer, insurance company or lease company turns a consumer down because of one of these “specialty” reports, the consumer has a right to a copy. Consumers have the right to dispute the report’s accuracy or completeness. The company that creates the report has to investigate within 30 days. If there’s an error, it must be reported to the source of information, whether that is a court, credit bureau or a background screener.

“The idea is that, upstream, it gets corrected,” Devata said. “Then ... the agency has to revise the report and re-issue it to the consumer and the end-user.”

Besides cases when something goes wrong, when should consumers start gathering their own intelligence? Stephens believes it’s important for consumers to be aware of what reports are available. But not everyone needs to see every piece of paper maintained by these specialty reporting companies.

If you have group health insurance, for example, there’s probably no reason to order an MIB report. But if you are in the market for car or homeowners insurance, a CLUE or A-PLUS report would be a good idea.

The more complete files provided by LexisNexis and Choicepoint are probably the best place to start, he said, “in terms of an overall catchall or check-up.”

Who’s keeping tabs on you?

Here’s how to get more information and free file disclosures from some major “specialty” consumer agencies that compile consumer information. The information includes real estate transaction and ownership data, liens, legal judgments, risks for medical and life insurance coverage, bankruptcy records, financial information and professional license information.

Background Reports:

● Lexis Nexis: Here’s what a “person report” from LexisNexis looks like:

bit.ly/9PhdnV

Instructions for getting a LexisNexis report:

bit.ly/a7shqk

www.lexisnexis.com/risk/factact

● Choice Point: The ChoicePoint Full File Disclosure includes insurance, criminal records and any pre-employment background checks, if they’ve ever been ordered. Here’s more information:

bit.ly/crmNBy

bit.ly/aJrcf5

● National Association of Professional Background Screeners: The organization lists more than 300 member background check companies. www.napbs.com

Insurance:

A-PLUS and CLUE reports are used by two major companies to create a risk assessment for home and automobile insurance:

● ISO Property and Casualty Insurance Risk’s A-PLUS report: bit.ly/bVcCbB

● ChoicePoint’s CLUE report: Call 866-312-8076 or visit www.choicetrust.com and navigate to CLUE reports.

Prescription and Medical Histories:

● Medical Information Bureau: To receive a file call 866-692-6901 and follow the voice-response system. bit.ly/cEROHW

● Ingenix’s MedPoint: Call 888-206-0335 and be prepared to provide identifying information such as date of birth and Social Security number.

● Milliman’s Intelliscript: Call 877-211-4816 and provide name, address, last four digits of Social Security number, birth date and telephone number.

Check Writing History:

● ChexSystems: Call 800-428-9623 or see: consumerdebit.com

● TeleCheck: Call 800 835-3243 and be prepared to navigate a few voice prompts.

Sources: Company Web sites; consumerist.com; privacyrights.org

--------------------

How we got the story

While researching a story about changes to federal law that help consumers with credit reports, a Spotlight reporter saw the law’s wording on “specialty” reports and decided to look into just how many such reports there might be. The reporter ordered many of her own reports and talked to privacy experts, attorneys and regulators about how the system works and how consumers can protect themselves.

--------------------