CFPB warns companies over name-matching

Consumer reporting companies that rely on name-matching alone to match records to an individual are violating the Fair Credit Reporting Act, the Consumer Financial Protection Bureau said.

Consumer reporting companies that rely on name-matching alone to match records to an individual are violating the Fair Credit Reporting Act, the Consumer Financial Protection Bureau said. Such companies must verify information with “maximum possible accuracy,” the CFPB said. “Regulators are concerned about the significant harms caused by false identity matching.”

Using only first and last name to determine whether a particular item of information relates to a particular consumer — without it with other personally identifying information such as address, date of birth, or Social Security number — consumer reporting companies are not meeting accuracy thresholds, the bureau said.

Black, Hispanic and Asian consumers are particularly vulnerable to this phenomenon because of a lack of “surname diversity,” the agency said, and inaccurate information can negatively impact consumers as they apply for new employment or rental housing. 

The CFPB will be working with the Federal Trade Commission to ensure compliance with FCRA requirements.

“When background screening companies and their algorithms carelessly assign a false identity to applicants for jobs and housing, they are breaking the law,” said CFPB Director Rohit Chopra. “No one should lose out on a job or an apartment because of sloppy and illegal matching. Error-ridden background screening reports may disproportionately impact communities of color, further undermining an equitable recovery.”

Fredrikson & Byron Law