Chapter 9: Financial Privacy
Adverse Action Notices
An adverse action is any negative business, credit or employment decision. When a user acts adversely based even in part on a consumer report, it must notify the consumer with the CRA's identity, a statement that the CRA did not decide, and the consumer's rights to a free disclosure within 60 days and to dispute.
"Adverse action" is defined broadly. Note that no adverse action occurs where a creditor makes a counteroffer that the consumer accepts.
| Source of information | Consumer's disclosure window | Provider's response window |
|---|---|---|
| From a CRA | Free file disclosure if requested within 60 days; right to dispute with the CRA | Notice given when action taken (written, oral or electronic) |
| From a third party (non-CRA) | Written request within 60 days of notification | User discloses nature of information within a reasonable time |
| From an affiliate | Written request within 60 days of the notice | User discloses nature of information within 30 days of the request |
Counteroffer carve-out
If a creditor responds to an application with a counteroffer the consumer accepts, there is no adverse action and no adverse-action notice is triggered.
Key terms - quick answers
What is “Adverse action”?
Any business, credit or employment action with a negative impact on a consumer, such as denying or cancelling credit/insurance or denying employment or promotion.