Clarity Services, Inc. Streamlines the Adverse Action Notification Process

CLEARWATER, FL, December 04, 2012 (Press-News.org) Clarity Services, Inc., the leading real-time credit bureau addressing fraud detection and credit risk management solutions for the under-banked and non-prime consumer segment, announces its newest service, Clear Adverse Action Notification. The service will assist lenders and credit-based service providers in meeting stringent adverse action notification compliance requirements.

Clarity Services' Clear Adverse Action Notification service expedites the delivery and proper handling of adverse action notices that are required after a credit application has been denied.

"Clarity has always taken a proactive approach to addressing lender needs," said Tim Ranney, founder and president of Clarity Services, Inc. "It has been our impression that one of the primary areas of concern is ECOA and FCRA compliance. As a result, we are ready to help lenders directly address those areas."

Under the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA), creditors must give notification to applicants against whom an adverse action has been taken, such as a denial or revocation of credit, a change in terms of an existing credit arrangement, or a refusal to grant credit in the amount or on the terms requested. Collectively, these laws require that the reasons for denial, along with the contact information of the consumer reporting agencies providing the information that resulted in the denial, are included in the notification. For businesses that depend on Clarity products to make lending decisions, the adverse action notification process just became easier.

"There is some confusion with online lenders over whether they have to provide adverse action notices under certain circumstances," said Justin Hosie, a partner at Hudson Cook, LLP, a nationally recognized consumer finance law firm. "It's clear that if you deny an application, you must provide an adverse action notice, and if the denial is based on information from a credit bureau, you must include the FCRA adverse action notice."

What starts off clear may become unclear when leads and lead providers are introduced to the process.

"Assuming there is no way to know whether another creditor provided credit to the same consumer, if you decide to not purchase a lead based on information from a credit bureau, you should provide the applicant a combined FCRA and ECOA adverse action notification, and if you decide to not purchase a lead based on your own internal evaluation, even if you do not use a credit report to evaluate the application, you must provide the applicant an ECOA adverse action notification," said Hosie. "Even in situations where it is not crystal clear whether the circumstances require the creditor to send an adverse action notification, perhaps the safest and best option may be to provide the notifications and avoid costly fines, damages, and litigation."

Clarity's new service automates the notification to denied applicants by sending nightly emails that itemize each inquiry that resulted in a denial, including the lender name and contact information, lead generator name, date of denial, denial reason(s), and the bureau(s) that provided the information used to make the decision. The notification also provides contact information for each bureau and a link to the consumer's Clarity file.

"This service assures that lenders and businesses stay in compliance with the terms of the adverse action policies," said Ranney. "Even if a consumer applies for a loan through a lead generator, a letter outlining each lender that reviewed the application and in turn denied them, will be included in the notification."

At a cost of only $.04 per denial, the Clear Adverse Action Notification service benefits the lenders who enroll by streamlining the notification process, reducing postage, supplies, overhead expenses, and directing consumers back to lead generators, rather than lenders.

Clear Adverse Action Notification is available now. For more information, sign up for a webinar at www.clarityservices.com/webinar or email sales@clarityservices.com.

With over 30 million unique Social Security Numbers, Clarity Services is an industry leader in providing powerful reporting products on under banked, non-prime, thin file consumers with real-time consumer data to facilitate fraud detection, risk management, and more.

For more information on Clarity's robust reporting solutions, please visit: www.clarityservices.com.