Prior to the passage of the Fair Credit Reporting Act, credit reporting companies attempted to document all manner of personal and private information. Often, these credit reports included the personal judgments of investigators laced with prejudice. For example,

“In 1972, a man in San Francisco discovered that a consumer report about him for a life insurance policy included the comment that he used ‘his hands in an effeminate manner, also talks in an effeminate manner.'”

At that time, the Medical Information Bureau (MIB, Inc.) was under no legal compulsion to reveal itself or its activities to its customers. Researcher Robert Ellis Smith investigated these routine invasions of privacy by the insurance credit reporting agencies and uncovered “countless reports [that] included the fact that a prospected insured was living ‘without benefit of wedlock.'” Moreover, Smith reported that “unverified rumors of homosexuality” were common.

According to the Federal Trade Commission, “In addition to an individual’s credit history, data collected by the Medical Information Bureau (MIB) may include medical conditions, driving records, criminal activity, drug use, participation in hazardous sports, and personal or family genetic history, among other facts.”

Surprisingly, these “medical report” files contain both medical and non-medical information, as clearly demonstrated by these vintage insurance credit reports from the 1970’s describing effeminate men, homosexuals, and single mothers living alone. By design, consumers are largely unaware of the MIB’s existence. Until the Pennsylvania Insurance Commissioner threatened MIB member companies in the state in 1974, insurance agencies consulted MIB without telling applicants about the files.

For more information about the history of reputation management and passage of the Fair Credit Reporting Act (FCRA), see “Reputation Regulation: Disclosure and the Challenge of Clandestinely Commensurating Computing” by Frank Pasquale; Chapter 6 of The Offensive Internet – Privacy, Speech, and Reputation. Edited by, Saul Levmore and Martha C. Nussbaum. Harvard University Press. 2010.

“Reputation Regulation: Disclosure and the Challenge of Clandestinely Commensurating Computing”

By Frank Pasquale (2010)

Background on the Fair Credit Reporting Act

Much like today’s Internet, the files of pre-Fair Credit Reporting act (FCRA) credit bureaus were often contaminated with irrelevant and inaccurate information, or innuendo.

Their dossiers included judgments laced with prejudice; for example, “in 1972, a man in San Francisco discovered that a consumer report about him for a life insurance policy included the comment that he used ‘his hands in an effeminate manner, also talks in an effeminate manner.'” (Footnote 13 – Robert Ellis Smith, Ben Franklin’s Website 317 (2000) (discussing routine invasions of privacy by CRA’s; “countless reports included the fact that a prospected insured was living ‘without benefit of wedlock'”; “unverified rumors of homosexuality” were common; the sourthern-based Retail CRedit Co.’s “young, barely trained ‘investigators’ prepared reports for insurance companies that reported the drinking habits of consumers…”).)

Senator William Proxmire translated public concern about “erroneous and selective credit reporting” into hearings about credit industry practices and eventual passage of the Fair Credit Reporting Act (FCRA).

Congress passed the FCRA in 1970 to protect consumers and regulate the consumer credit reporting industry. The Congressional findings associated with the act describe the sorry state of the industry as it existed before the passage of the FCRA.

Congress intended the law “to require that consumer reporting agencies adopt reasonable procedures…for [compiling] consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information.

The act regulates the preparation of consumer credit reports by “credit reporting agencies,” as well as the disclosure of those reports, and procedures associated with the maintenance of consumer credit information.”

Excerpted from “Reputation Regulation: Disclosure and the Challenge of Clandestinely Commensurating Computing” by Frank Pasquale; Chapter 6 of The Offensive Internet – Privacy, Speech, and Reputation. Edited by, Saul Levmore and Martha C. Nussbaum. Harvard University Press. 2010.

Even today, the MIB remains secretive by steadfastly refusing to release its list of underwriting codes, even amidst controversy over its use of non-medical codes such as alcoholism, criminal activity, sexual deviance, sloppy appearance, drug use, marital status, single females living ‘without benefit of wedlock’, and homosexuality.

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