[Federal Register Volume 71, Number 250 (Friday, December 29, 2006)]
[Notices]
[Pages 78438-78440]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-22406]
=======================================================================
-----------------------------------------------------------------------
FEDERAL TRADE COMMISSION
Agency Information Collection Activities; Submission for OMB
Review; Comment Request
AGENCY: Federal Trade Commission.
ACTION: Notice and request for comment.
-----------------------------------------------------------------------
SUMMARY: The information collection requirements described below will
be submitted to the Office of Management and Budget (``OMB'') for
review, as required by the Paperwork Reduction Act (``PRA''). The
Federal Trade Commission (``FTC'' or ``Commission'') is seeking public
comments on its proposal to extend through April 30, 2010 the current
OMB clearance for its Free Annual File Disclosures Rule (``Rule'').
That clearance expires on April 30, 2007.
DATES: Comments must be filed by February 27, 2007.
ADDRESSES: Interested parties are invited to submit written comments.
Comments should refer to ``Free Annual File Disclosures Rule: FTC
Matter No. P054816,'' to facilitate the organization of comments. A
comment filed in paper form should include this reference both in the
text and on the envelope and should be mailed or delivered, with two
complete copies, to the following address: Federal Trade Commission,
Room H-135 (Annex J), 600 Pennsylvania Ave., NW., Washington, DC 20580.
Because paper mail in the Washington area and at the Commission is
subject to delay, please consider submitting your comments in
electronic form, as prescribed below. However, if the comment contains
any material for which confidential treatment is requested, it must be
filed in paper form, and the first page of the document must be clearly
labeled ``Confidential.'' \1\
---------------------------------------------------------------------------
\1\ Commission Rule 4.2(d), 16 CFR 4.2(d). The comment must be
accompanied by an explicit request for confidential treatment,
including the factual and legal basis for the request, and must
identify the specific portions of the comment to be withheld from
the public record. The request will be granted or denied by the
Commission's General Counsel, consistent with applicable law and the
public interest. See Commission Rule 4.9(c), 16 CFR 4.9(c).
---------------------------------------------------------------------------
Comments filed in electronic form should be submitted by following
the instructions on the web-based form at https://secure.commentworks.com/freereports. To ensure that the Commission
considers an electronic comment, you must file it on the web-based form
at the https://secure.commentworks.com/freereports weblink. If this
notice appears at http://www.regulations.gov, you may also file an
electronic comment through that Web site. The Commission will consider
all comments that regulations.gov forwards to it.
The FTC Act and other laws the Commission administers permit the
collection of public comments to consider and use in this proceeding as
appropriate. All timely and responsive public comments will be
considered by the Commission and will be available to the public on the
FTC Web site, to the extent practicable, at http://www.ftc.gov. As a
matter of discretion, the FTC makes every effort to remove home contact
information for individuals from the public comments it receives before
placing those comments on the FTC Web site. More information, including
routine uses permitted by the Privacy Act, may be found in the FTC's
privacy policy at http://www.ftc.gov/ftc/privacy.htm.
FOR FURTHER INFORMATION CONTACT: Requests for additional information
should be addressed to Sandra Farrington, Attorney, Division of Privacy
and Identity Protection, Bureau of Consumer Protection, Federal Trade
Commission, 600 Pennsylvania Avenue, NW., NJ-3158, Washington, DC
20580, (202) 326-2252.
SUPPLEMENTARY INFORMATION: Under the Paperwork Reduction Act (``PRA''),
44 U.S.C. 3501-3520, federal agencies must obtain approval from OMB for
each collection of information they conduct or sponsor. ``Collection of
information'' means agency requests or requirements that members of the
public submit reports, keep records, or provide information to a third
party. 44 U.S.C. 3502(3); 5 CFR 1320.3(c). As required by section
3506(c)(2)(A) of the PRA, the FTC is providing this opportunity for
public comment before requesting that OMB extend the existing paperwork
clearance for the regulations noted herein.
The FTC invites comments on: (1) Whether the proposed collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (2) the accuracy of the agency's estimate of the burden of the
proposed collection of information, including the validity of the
methodology and assumptions used; (3) ways to enhance the quality,
utility, and clarity of the information to be collected; and (4) ways
to minimize the burden of the collection of information on those who
are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology, e.g., permitting electronic
submission of responses.
All comments should be filed as prescribed in the ADDRESSES section
above, and must be received on or before February 27, 2007.
The Rule, 16 CFR Parts 610 and 698, was promulgated pursuant to the
Free and Accurate Credit Transactions Act of 2003 (``FACT Act''), Pub.
L. 108-159 (Dec. 4, 2003), and the Fair Credit Reporting Act
(``FCRA''), 16 U.S.C. 1681 et seq. As mandated by the FACT Act, the
Rule requires nationwide and nationwide consumer specialty reporting
agencies to provide to consumers, upon request, one free file
disclosure within any 12-month period.
Generally, the Rule requires the nationwide consumer reporting
agencies, as defined in Section 603(p) of the FCRA, 15 U.S.C. 1681a(p),
to create and operate a centralized source that provides consumers with
the ability to request their free annual file disclosures
[[Page 78439]]
from each of the nationwide consumer reporting agencies through a
centralized Internet Web site, toll-free telephone number, and postal
address. The Rule also requires the nationwide consumer reporting
agencies to establish a standardized form for Internet and mail
requests for annual file disclosures, and provides a model standardized
form that may be used to comply with that requirement.
The Rule also requires nationwide specialty consumer reporting
agencies, as defined in Section 603(w) of the FCRA, 15 U.S.C. 1681a(w),
to establish a streamlined process for consumers to request annual file
disclosures. This streamlined process must include a toll-free
telephone number for consumers to make such requests.
Burden Statement
Estimated total annual hours burden: 311,000 hours (rounded to the
nearest thousand).
In its 2004 PRA-related Federal Register Notices \2\ and
corresponding submission to OMB, FTC staff estimated that consumer
reporting agencies would receive an average of 16.6 million new annual
file disclosure requests per year during the three-year period from May
1, 2004 through April 30, 2007.\3\ Thus, estimated average annual
disclosure burden for those three years was approximately 199,000
hours.\4\
---------------------------------------------------------------------------
\2\ 69 FR 13192 (Mar. 19, 2004); 69 FR 35468 (Jun. 24, 2004).
\3\ Staff predicted that nationwide consumer reporting agencies
and nationwide specialty consumer reporting agencies would receive
19.9 million new annual file disclosure requests per year. However,
the nationwide and nationwide specialty consumer reporting agencies
were not required to provide annual file disclosures under the Rule
until December 2004, 6 months after the Rule was published. On that
basis, staff predicted there would be 9.45 million new requests for
annual file disclosures for the first year of the clearance. [19.9
million/2] Thus, staff projected that consumer reporting agencies
would receive an average of 16.6 million new requests per year
during the requested clearance period. [(9.45 million + 19.9 million
+ 19.9 million)/3 = 16.6 million]
\4\ This total included estimated time to increase call center
and internet capacity to handle heightened request volume, alternate
use of live operators in limited instances, and processing mail
requests.
---------------------------------------------------------------------------
No provisions in the Rule have been amended since staff's prior
submission to OMB. However, the Consumer Data Industry Association
recently stated that since December 1, 2004, the nationwide consumer
reporting agencies have provided over 52 million free annual file
disclosures through the centralized Internet Web site, toll-free
telephone number, and postal address required to be established by the
FACT Act and the Rule.\5\ Applying this data, staff estimates that the
average annual disclosure burden for the three-year period for which
the Commission seeks OMB clearance is approximately 311,000 hours, as
detailed below, and that the nationwide consumer reporting agencies and
the nationwide specialty consumer reporting agencies will receive 26.69
million requests per year from consumers for free annual file
disclosures.\6\
---------------------------------------------------------------------------
\5\ Letter from Stuart K. Pratt, President & CEO, Consumer Data
Industry Association, to Rep. Barney Frank, Committee on Financial
Services, U.S. House of Representatives (Dec. 1, 2006).
\6\ This figure annualizes the Consumer Data Industry
Association's estimate of 52 million new requests for the two-year
period from December 1, 2004 to December 1, 2006 and revises it
upward over the next three years based on population growth
projections issued by the U.S. Census Bureau. See U.S. Census Bureau
Interim Projections by Age, Sex, Race, and Hispanic Origin,
available at http://www.census.gov/ipc/www/usinterimproj/.
---------------------------------------------------------------------------
Annual File Disclosures Provided Through the Internet
Both nationwide consumer reporting agencies and nationwide
specialty consumer reporting agencies will likely handle the
overwhelming majority of consumer requests through internet Web
sites.\7\ The annual file disclosures requests processed through the
internet will not impose any hours burden per request on the nationwide
and nationwide specialty consumer reporting agencies, even though there
will be some periodically recurring time and investment required to
adjust the internet capacity needed to handle the new changing request
volume. Consumer reporting agencies likely will make such adjustments
by negotiating or renegotiating outsourcing service contracts annually
or as conditions change. Negotiating and renegotiating such contracts
requires the time of trained personnel. Staff estimates that
negotiating such contracts will require a cumulative total of 8,320
hours and $425,152 in setup and/or maintenance costs.\8\ Such activity
is treated as an annual burden of maintaining and adjusting the
changing internet capacity requirements.
---------------------------------------------------------------------------
\7\ According to a HarrisInteractive poll, the percentage of
households that have access to the internet is currently over 60%
and increasing. See The Harris Poll 8, February 5, 2003,
available at http://www.harrisinteractive.com/harris_poll/index.asp?PID=356. In addition, internet users are probably more
likely to request an annual file disclosure. Accordingly, staff
estimates that annually, 75% of the 26.69 million new requests (or
approximately 20 million) will be made online.
\8\ Based on the time necessary for similar activity in the
federal government (including at the FTC), staff estimates that such
contracting and administration will require approximately 4 full-
time equivalent employees (``FTE'') for the web service contract.
Thus, staff estimates that administering the contract will require 4
FTE, which is 8,320 hours per year (4 FTE x 2080 hrs/yr). The cost
is based on the reported Bureau of Labor Statistics (BLS) rate
($48.03) for computer programmers for 2005 (most recently available
BLS data) multiplied by 6.286% (approximate wage inflation for 2005
and 2006 based on the BLS Employment Cost Index), resulting in a
wage of $51.10 per hour. Thus, the estimated setup and maintenance
cost for an internet system is $425,152 per year (8,320 hours x
$51.10/hour).
---------------------------------------------------------------------------
Annual File Disclosures Requested over the Telephone
Most of the telephone requests for annual file disclosures will
also be handled in an automated fashion, without any additional
personnel needed to process the requests. As with the internet,
additional time and investment will be needed to increase and
administer the automated telephone capacity for the expected increase
in request volume. The nationwide and nationwide specialty consumer
reporting agencies will likely make such adjustments by negotiating or
renegotiating outsourcing service contracts annually or as conditions
change. Staff estimates that this will require a total of 6,240 hours
at a cost of $301,142 in setup and/or maintenance costs.\9\ This also
is treated as an annual recurring burden necessary to obtain, maintain,
and adjust automated call center capacity.
---------------------------------------------------------------------------
\9\ Staff estimates that recurrent contracting for automated
telephone capacity will require approximately 3 FTE, a total of
6,240 hours (3 x 2,080 hours). Applying a wage rate of $48.26 based
on the 2005 BLS rate for marketing managers ($45.36/hr), the
estimate for setup and maintenance cost is $301,142 (6,240 x $48.26)
per year.
---------------------------------------------------------------------------
A small percentage of those consumers who telephone the centralized
source or the nationwide speciality consumer reporting agencies will
not have telephone equipment compatible with an automated system and
may need to be processed by a live operator.\10\ Based on their
knowledge of the industry, staff estimates that each of these requests
will take 5 minutes to process, for a total of 5,334 additional hours
of operator time. [(64,008 x 5 minutes)/60 minutes = 5,334 hours]
---------------------------------------------------------------------------
\10\ Based on their knowledge of the industry, staff estimates
that consumers will submit 24% (6.4 million) of the average 26.69
million new requests for annual file disclosures by telephone. Of
those, an estimated 1% (or 64,056) will not have telephone equipment
compatible with an automated system and may need to be serviced by
live personnel.
---------------------------------------------------------------------------
Annual File Disclosures that Require Processing by Mail
Based on their knowledge of the industry, staff believes that no
more than 1% of consumers (1% x 26.69 million, or 266,900) will request
an annual file disclosure through U.S. postal service mail. Staff
estimates that
[[Page 78440]]
10 minutes per request is required to handle these requests, thereby
totaling 44,483 hours of time by clerical personnel. [(266,900 x 10
minutes)/60 minutes = 44,483 hours] In addition, whenever the
requesting consumer cannot be identified using an automated method (a
Web site or automated telephone service), it will be necessary to
redirect that consumer to send identifying material along with the
request by mail. Staff estimates that this will occur in about 5% of
the new requests (or 1,321,155) that were originally placed over the
internet or telephone. Staff estimates that inputting and processing
those redirected requests will consume approximately 10 minutes apiece
at a cumulative total of 220,193 clerical hours. [(1,321,155 x 10
minutes)/60 minutes = 220,193 hours]
Instructions to Consumers
The Rule also requires that certain instructions be provided to
consumers. See Rule sections 610.2(b)(2)(iv)(A,B),
610.3(a)(2)(iii)(A,B). Minimal associated time or cost is involved,
however. Internet instructions to consumers are embedded in the
centralized source Web site and do not require additional time or cost
for the nationwide consumer reporting agencies. Similarly, regarding
telephone requests, the automated phone systems provide the requisite
instructions when consumers select certain options. Some consumers who
request their credit reports by mail may additionally request printed
instructions from the nationwide and nationwide specialty consumer
reporting agencies. Staff estimates that there will be a total of
1,588,055 requests each year for free annual file disclosures by
mail.\11\ Based on their knowledge of the industry, staff estimates
that of the predicted 1,588,055 mail requests 10% (or 158,806) will
request instructions by mail. If printed instructions are sent to each
of these consumers by mail, requiring 10 minutes of clerical time per
consumer, this will require 26,468 hours. [(158,806 instructions x 10
minutes)/60 minutes per hour]
---------------------------------------------------------------------------
\11\ This figure includes both the estimated 1% of 26.69 million
requests that will be made by mail each year (266,900), and the
estimated 5% of the requests initially made over the Internet or
telephone that will be redirected to the mail process (5% of 99% of
26.69 million = 1,321,155).
---------------------------------------------------------------------------
Labor costs: $5.18 million.
Labor costs are derived by applying hourly cost figures to the
burden hours described above. Accordingly, staff estimates that it will
cost $70,195 to provide annual file disclosures for requests that
require a telephone service representative. [5,338 hours x $13.15 per
hour].\12\ The remaining processing of requests for annual file
disclosures and instructions will be performed by clerical personnel,
which will require 291,144 hours at a cost of $4,387,540. [(44,483
hours for handling initial mail request + 220,193 hours for handling
requests redirected to mail + 26,468 hours for handling instructions
mailed to consumers) x $15.07 per hour.\13\] As elaborated on above,
staff estimates that a total of 14,560 labor hours (8,320 internet
contract hours + 6,240 telephone capacity contract hours) will be
needed to obtain, maintain, and adjust the new capacity requirements
for the automated telephone call center and the internet web services.
This will result in approximately $726,294 per year in labor costs.
[(8,320 hours x $51.10 per hour for automated phone service) + (6,240
hours x $48.26 per hour for Web services)] \14\ Thus, staff estimates
that all non-contract labor will cost $5.18 million each year.
---------------------------------------------------------------------------
\12\ The 2005 BLS wage rate for telephone operators, $12.36,
increased by 6.385% for compounded wage inflation, is $13.15.
\13\ The 2005 BLS wage rate for employees in administrative
support, clerical (level 4 of 9), $14.17, multiplied by 6.385% for
compounded wage inflation, is $15.07.
\14\ The 2005 BLS wage rate for top-level computer programmers,
$48.03, multiplied by 6.385% for compounded wage inflation, is
$51.10. The 2005 BLS wage rate for marketing managers, averaged
overall, is $45.36; compounded for wage inflation at 6.385% it
becomes $48.26.
---------------------------------------------------------------------------
Capital/other non-labor costs: $8.39 million.
Staff believes it is likely that the consumer reporting agencies
will use third-party contractors (instead of their own employees) to
increase the capacity of their systems. Because of the way these
contracts are typically established, these costs will likely be
incurred on a continuing basis, and will be calculated based on the
number of requests handled by the systems. Staff estimates that the
total annual amount to be paid for services delivered under these
contracts is $8.39 million.\15\
---------------------------------------------------------------------------
\15\ This consists of an estimated $7.69 million for automated
telephone cost ($1.20 per request x 6.41 million requests) and an
estimated $700,000 ($0.035 per request x 20 million requests) for
internet web service cost. Per unit cost estimates are based on
staff's knowledge of the industry.
---------------------------------------------------------------------------
Thus, combined, estimated annual labor and non-labor costs are
approximately $13.57 million per year.\16\
---------------------------------------------------------------------------
\16\ The consumer reporting industry is a multi-billion dollar
market. As of 2002, it is estimated to have more than $4 billion
dollars in sales of file disclosures. One study indicates that the
nationwide consumer reporting agencies had approximately $1.2
billion in earnings in 2002. See Michael Turner, Daniel Balis,
Joseph Duncan, and Robin Varghese, ``Free Consumer Credit Reports:
At What Cost? The Economic Impact of a Free Credit Report Law to the
National Credit Reporting Infrastructure,'' Washington, DC:
Information Policy Institute, September, 2003. Thus, the total labor
and non-labor cost burden estimate of $13.57 million represents a
small percentage--approximately 1% of the overall market ($13.57
million divided by $1.2 billion). This comparison is conservative,
as it does not include the earnings of the nationwide specialty
consumer reporting agencies.
William Blumenthal,
General Counsel.
[FR Doc. E6-22406 Filed 12-28-06; 8:45 am]
BILLING CODE 6750-01-P