Credit Reports – Available By Court Order
May 10, 2020
Consumer credit reports are typically available only with consumer consent and for a permissible business purpose. One notable exception permitted under the Fair Credit Reporting Act (FCRA) – is when a valid court order has been issued, requesting the consumer's credit file. Law firms and attorneys often need these types of accounts.
One of the more common instances where a "Credit Reports – By Order of the Court" account has to be established is for a fiduciary purpose. When an individual becomes incapacitated, a court will often appoint a guardian or conservator to safeguard the personal, medical, and fiscal matters of the individual, who has been deemed incompetent by the court to handle their own affairs.
These fiduciaries usually obtain the credit report of the individuals they protect annually or more frequently to ensure that any debt obligations are being satisfied, and that no new unauthorized debt obligations are being incurred. Law firms often assume the fiduciary role, particularly attorneys with an estate and/or tax law specialty. In other cases, the fiduciary may be licensed by the state, or may be a financial advisor.
Another frequent occurrence where court orders are obtained involve domestic disputes, generally with divorce proceedings. Divorce attorneys who obtain court orders and their law firms, can also establish "Credit Reports – By Order of the Court" accounts. This is particularly helpful as financial disputes are common with divorces, and credit reports will help uncover other mortgages, credit cards, loans and spending habits that will reveal financial resources that may not have otherwise been known.
Regardless of the type of court order, when law firms and attorneys secure any valid court order to obtain an individual's credit report, all law practices can establish "Credit Reports – By Order of the Court" accounts.
However, as credit bureaus require an on-site inspection by a third-party company to ensure compliance with the credit bureaus' data security and confidentiality requirements, law firms should be proactive to establish their "Credit Reports – By Order of the Court" account in advance of their need for the credit report, so as to allow for time for the on-site inspection to be completed.
Posted by: Rudy Troisi, L.P.I., President and CEO, Reliable Background Screening
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