Asked by Katelyn Smith on Jun 07, 2024
Verified
Auto & Life Insurance Company fails to notify its new customers when they are charged higher premium rates as a result of their credit scores. This is a willful violation of
A) the Equal Credit Opportunity Act.
B) the Fair Credit Reporting Act.
C) state law, but no federal law.
D) the Fair Debt Collection Practices Act.
Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) is a federal law designed to ensure accuracy, fairness, and privacy in the data used by consumer reporting agencies.
Auto & Life Insurance Company
An insurance company that provides both automobile insurance, protecting against vehicle-related damages, and life insurance, offering financial protection against death or disability.
Premium Rates
The cost of insurance coverage, typically charged monthly or annually, determined by risk factors and the amount of coverage.
- Understand the federal statutes that pertain to credit and the protection of consumers.
- Gain familiarity with the privileges consumers are accorded by the Fair Credit Reporting Act.
Verified Answer
JD
Jalee DavisJun 12, 2024
Final Answer :
B
Explanation :
The Fair Credit Reporting Act (FCRA) requires that consumers be notified when adverse actions are taken against them based on information in their credit reports, which includes being charged higher insurance premiums.
Learning Objectives
- Understand the federal statutes that pertain to credit and the protection of consumers.
- Gain familiarity with the privileges consumers are accorded by the Fair Credit Reporting Act.