Which option is a permitted method for supplying notice of negative information under the FACT Act?

• A. Supplying it in advance to all applicants, whether or not you actually supply negative information about all of them.
• B. Supplying it only to persons about whom you actually supply negative information, immediately upon supplying the negative information.
• C. Supplying it to the consumer only after the consumer requests it.
• D. Not providing any notice at all.

Answer: (B)

The key idea is that when a furnisher reports negative information about a consumer to a credit reporting agency, the consumer must be informed directly about that negative information. The best approach is to notify the consumer only if you actually report negative information about them, and do so immediately when you report it. This direct notice helps the consumer understand what is being reported and respond or dispute if needed. Pre-notifying all applicants in advance would be unnecessary and potentially confusing, while waiting for a consumer request or not notifying at all would deprive the consumer of timely information about adverse data.