State RegulationsNY specificDifficulty 2/5
A New York insurer charges an applicant a higher premium rate because of information in a consumer report. Under the Fair Credit Reporting Act (15 U.S.C. §1681), the insurer must
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under the Fair Credit Reporting Act (15 U.S.C. §1681), a user of a consumer report that takes an adverse action — such as a higher premium rate or a declination based on information in the report — must notify the consumer of the action and of the consumer's right to obtain a free copy of the report from the consumer reporting agency and to dispute inaccurate information.
Why the other options are wrong
- A) The right of file access runs to the consumer through the consumer reporting agency, not to the producer selling the policy.
- B) No court order is needed; underwriting use of a consumer report is a permissible purpose under the Act.
- C) Silence is the violation — adverse-action notice with the consumer's rights is exactly what the Fair Credit Reporting Act requires.
Memory hook
Adverse action from a report? Notify: free copy plus dispute rights.