Fair and Accurate Credit Transactions Act
November 25, 2003
Mr. BENNETT. Mr. President, this past Saturday, November 22, 2003, the Senate passed the Fair and Accurate Credit Transactions Act of 2003. Section 214 of the conference report, entitled "Affiliate Sharing," adds a new requirement for a notice and an opportunity for a consumer to opt-out of receiving solicitations from a person based on information that has been shared from an affiliate of that personSeveral exceptions to the notice and opt-out requirement are included in the bill. The first, and most logical one, is an exception for a business sending solicitations to its own customers. The conference report defines this as a "pre-existing business relationship."
The conference report further defines categories of relationships that qualify as a "pre-existing business relationship" and directs the regulators, including the Federal Trade Commission, to use their regulatory discretion to deem any "any other pre-existing customer relationship" as qualifying for the definition that may be appropriate but not clear from the statute.
The first category of relationships that the conference report definition of "pre-existing business relationship" lists is a relationship based on "a financial contract between a person and a consumer which is in force." "Financial contract," however, is not defined and it is not clear on its face what the term describes. In any case, I believe the operative concern is that it must be a contract in force.
As a conference, I believe the conference report intends that the term "pre-existing business relationship" includes a contractual relationship between a consumer and a person, where the consumer has requested the provision of a good or service, or affirmatively registered to receive a service, whether or not a fee is assessed.
Certain business models, such as those in the online world, do not follow the traditional fee for services model that characterizes the brick and mortar world. Financial consideration may not exchange up front with a customer, or at all for that matter. Accordingly, I urge the regulators to factor in new and innovative business models when issuing the regulations implementing section 214 of the Fair and Accurate Credit Transactions Act of 2003, particularly with regard to the definition of "pre-existing business relationship."