Arizona Health Insurance Practice Exam

A consumer who has been recently denied insurance, credit, or employment based on an unfavorable consumer report must be advised as such. Which statute does this originate from?

1. Truth in Lending Act

2. Fair Credit Reporting Act

3. Consumer Protection Act

4. Equal Credit Opportunity Act

The correct answer is: Fair Credit Reporting Act

The Fair Credit Reporting Act (FCRA) is the correct statute that requires consumers to be notified when they are denied insurance, credit, or employment based on information in a consumer report. This law was enacted to promote accuracy and ensure the privacy of consumer information. Under the FCRA, when an adverse action is taken, such as a denial based on a consumer report, the consumer must be informed not only about the denial but also about the source of the information and their rights regarding that report. This notification process is crucial for allowing consumers to understand the reason for adverse actions taken against them and to ensure they have an opportunity to dispute any inaccuracies in their credit reports. The other statutes mentioned, while related to consumer rights and credit, do not specifically address the requirement for notifying consumers about denials linked to consumer reports in the same manner as the Fair Credit Reporting Act does.