Home > Uncategorized > The FCRA’s two-year statute of limitations clause doesn’t impose much of a limitation.

The FCRA’s two-year statute of limitations clause doesn’t impose much of a limitation.

August 26, 2011

UPDATE: this 2011 post discussed some then-recent district court cases interpreting the FCRA’s statute of limitations.  Since then, other courts, including at least one appeals court, have interpreted the statute in a different (and more defense-friendly) way.  See my posts in January 2016; December 2015; and November 2015 for commentary. 

The FCRA was extensively amended by the “Fair and Accurate Credit Transactions Act” or FACTA in 2003.  Some of the amendments received a great deal of attention when they were made; others didn’t.  One of the amendments that didn’t get much attention made a change to the FCRA’s statute of limitations provision, at 15 USC 1681p.

Before the amendment, 1681p stated that a claim for an FCRA violation had to be brought “within two years from the date on which the liability arises” unless the defendant had knowingly or willfully failed to disclose something it should have disclosed, in which case the claim could be brought within two years of the discovery of the misrepresentation.

Now, after the amendment, 1681p states that a claim for an FCRA violation must be brought either: 1) within two years of the plaintiff’s discovery of the violation; or b) within five years of the date of the violation, whichever is earlier.  Not many cases have interpreted the new language, but the ones that have suggest that the FCRA effectively has a five-year limitations period, because it is not easy for a defendant to show when a plaintiff discovered a violation.

A good example is a recent decision in Andrews v. Equifax Info. Servs. LLC, 700 F. Supp. 2d 1276 (W.D. Wash. 2010).  Plaintiff Andrews sued Equifax for mixing another person’s credit information with her own and printing both sets of information in a credit report about her.  Her claims were for failure to use reasonable procedures (1681e(b)) and failure to reinvestigate (1681i).  Evidence, including her deposition, showed that plaintiff called Equifax with credit report disputes in September 2004 and October 2005, and that Equifax conducted reinvestigations and sent her three new credit reports, the last of which was sent in November 2005.  Plaintiff was also denied credit in early 2006.  Equifax moved for summary judgment and argued that these events demonstrated that plaintiff had “discovered” a violation, which meant that her lawsuit – which she filed in 2008 – was time-barred under the two-year limitations provision.

The court  denied Equifax’s motion.  The court found that none of the events of late 2005 and early 2006 clearly indicated that plaintiff knew that Equifax had violated the FCRA at that point.  She knew that her credit reports contained inaccuracies, and that she’d been denied credit, but she didn’t necessarily know – so the court found – that these issues were due to Equifax’s alleged failure to use reasonable procedures or to reinvestigate.  The court also noted that there was no clear evidence that plaintiff received the revised credit reports that Equifax sent her – she testified at her deposition that she didn’t remember if she received them, and Equifax could only show that it sent them, not that they were delivered to her (it used regular mail and not certified mail).

Because most consumer reporting agencies and credit furnishers send consumers form letters, not personalized records of disputes or credit denials, and because they send these form letters via regular mail, not certified mail, the Andrews decision suggests that it will be somewhere between difficult and impossible for a defendant agency or furnisher to show that a typical consumer ever “discovered” an FCRA violation.  It is too easy for the plaintiff to create a dispute of fact about the discovery date, by giving vague testimony about whether he or she ever received certain documents or understood them.

If Andrews is followed by other courts, the FCRA will essentially be a statute with a five-year limitations period, as it will be the rare case in which a defendant can establish that the plaintiff “discovered” a violation and triggered the two-year period.

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