What does the Fair Credit Reporting Act require insurers to do when using a third-party source?

The Fair Credit Reporting Act (FCRA) requires insurers to notify denied applicants of the identity of the credit source they used in making their decision. This regulation is in place to ensure transparency and provide consumers with the opportunity to understand the factors that influenced their application results. When an application is denied based on information from a third-party credit report, informing the applicant about the source allows them to address any potential inaccuracies or disputes with that reporting agency.

This requirement is intended to protect consumers from unfair practices and gives them the ability to rectify any issues that may have led to a denial, ultimately fostering fair treatment in credit transactions. The other options presented do not reflect the specific obligations outlined in the FCRA regarding third-party credit sources.