by Jeff Sovern
It may seem bizarre, but it appears that recommendations that contain information that goes beyond the transactions or experiences of the person writing the letter are subject to the Fair Credit Reporting Act. For example, if a law professor writes a letter that points out that a student has job experience in a particular practice area that the recipient of the letter values (assuming that the professor was not the employer or a co-worker), the FCRA probably applies to the letter. That means that the student would have a variety of protections under the FCRA and be entitled to certain notices–which makes no sense, but that's where the law takes you.
Let me explain. The FCRA applies to consumer reports issued by consumer reporting agencies (not just credit reports issued by credit bureaus). The statute defines “consumer report” as any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s . . . character, general reputation, personal characteristics, . . . which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for . . . employment purposes." 15 USC § 1681a(d)(1). When professors provide recommendations for a job, as we often do for clerkships, for example, what we say bears on the student's character, personal characteristics, etc., so that fits the definition. But there's an exception in § 1681a(d)(2)(A)(i) for reports "containing information solely as to transactions or experiences between the consumer and the person making the report." So if a professor limits the letter to the student's performance in class, it's not a consumer report. But professors sometimes (often?) want to sell a student and present a more complete view and so will include items in the letter that they think will aid the student that go beyond the professor's personal experience with the student. Those letters are consumer reports if the letter is from a consumer reporting agency.
A consumer reporting agency is defined in 15 USC § 1681a(f) as "any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports." Schools receive tuition, which presumably covers the cost of writing recommendations, so that probably covers the monetary fee part of the definition. But even if it doesn't, law schools act on a cooperative nonprofit basis when they recommend students in exchange for which students get jobs, enabling schools to brag about their employment statistics. Students are consumers of the law school's services (the FCRA defines consumer as "an individual" in 15 USC § 1681a(c)). The law school assembles information on students to furnish consumer reports to third parties, and surely uses interstate commerce in doing so. Accordingly, the FCRA seems to regulate recommendations that go beyond the recommender's personal experiences with the student. This was in fact the conclusion of a May 15, 1974 informal FTC staff opinion from Robert W. Russell.
What do all this mean as a practical matter? Because the FCRA was designed to protect consumers from misconduct of credit bureaus and users of their information, it contains various protections that don't fit well in the world of law school recommendations. For example, under 15 USC § 1681e, law schools would have to ask recipients of the recommendations (judges?) to certify certain things about their use of the information. Employers who based a decision at least in part on a recommendation would have to provide certain notices to the student, 15 USC § 1681m, after which students could obtain certain information from the school under 15 USC § 1681g. And so on.
Of course, professors and schools could avoid this problem by limiting their letters to their own experiences with students, but why is that in anyone's interest? It would limit the ability of schools to put students in the best light possible and tell a more complete story about the student. There might be some value in subjecting recommendations to the accuracy requirements of the FCRA if recommendations were balanced attempts to appraise students and even warn employers away from students. But, in my experience, at least, that's not what they are: the author is recommending the student for a job, which is why they're called recommendations. This issue is ripe for attention from Congress. I hope anyone who has a different view of the FCRA will say so in the comments.
