Michigan's lawmakers protect the rights of consumers through statutes developed to regulate actions associated with consumer protection. Credit reporting laws that protect Michigan residents can be found in the Fair Credit Reporting Act passed by Congress in 1970. FCRA protects Michigan residents by ensuring consistent reporting and dissemination of credit information. Chapter 445 of Michigan Compiled Laws outline state rulings that coincide with the federal laws concerning consumer issues.
Michigan Consumer Protection
For the most part, Michigan has left consumer credit reporting laws to the federal government. However, Michigan's legislature did enact the Michigan Consumer Protection Act in 1976. The statutes contain rules and penalties governing business practices, relying on common sense applications that prohibit unfair, unconscionable or deceptive methods while conducting trade or commerce in the state. In 1981, the legislature focused on collection practices, setting down a comprehensive list of prohibited acts, barring the use of misleading and deceptive tactics and imposing punishment for violations.
Other Michigan Consumer Statutes
Realizing that identity theft was fast becoming a major problem, Michigan legislators addressed the crime in 2004 through the Identity Theft Protection Act. The law defines identity theft as the use of another person's identity to obtain credit, goods, services or vital records or to commit an unlawful act. Penalties may be criminal in nature, punishable by up to five years in prison or a fine of not more than $25,000 or both. Another portion of the act explains the rules and regulations for destroying records and imposes law that dictates a misdemeanor prosecution that includes a fine for a person who knowingly violates the statute. Another law, the Social Security Number Privacy Act of 2004, prohibits the public display of a consumer's complete Social Security number.
FCRA Preemptions
The Fair and Accurate Credit Act of 2003 enhances and broadens 1970's FCRA, making permanent preemptions enacted in 1996. Preemptions limit the state's ability to enact laws that exceed federal regulations. The 1996 preemptions, which were to expire on Dec. 31, 2003, and are now permanent, include: regulations concerning prescreening of consumer reports, setting of time frames for handling accuracy disputes, duties of people responsible for taking adverse actions against consumers, duties of people who use consumer reports for actions other than those initiated by the consumer, determination of what information is contained in a credit report, duties of the person forwarding information to credit reporting agencies, and sharing of information between affiliates.
FACTA Preemptions
In addition to making previous preemptions permanent, FACTA added new permanent preemptions to state law. The new preemptions cover: the obligation of businesses to provide information to identity theft victims, the rights of a consumer to opt out of affiliate-shared-based solicitations, the obligation to present risk-based pricing notices, the right of a consumer to obtain a free credit report once every 12 months, and the obligation of consumer reporting agencies and mortgage lenders to reveal credit scores when the score is used to determine credit worthiness.
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