Archive for September, 2012

The FCRA and Employment: Still in the News

September 28, 2012 Leave a comment

Perhaps the hottest area in consumer reporting law right now – in the press, if not in actual litigation – pertains to consumer reports and employment. Traditionally, plaintiffs have filed FCRA lawsuits when they were denied a loan, due to inaccuracies on their credit reports.  Now, however, it is increasingly well known that employers are using credit reports and/or criminal background reports – both of which are regulated by the FCRA – to decide whether to hire or fire employees.  I am seeing lawsuits about this use in my practice, and I predict that we’ll soon see as many, if not more, of them than of the traditional “I didn’t get a loan” lawsuit.

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CFPB issues new FCRA forms

September 21, 2012 Leave a comment

As I noted last week, the federal CFPB has been granted primary authority to enforce the FCRA on behalf of the federal government (the FTC says it will continue to play a role, though it’s not clear how extensive it will be or under what authority it will do so).

Recently, and in a very subtle way, the CFPB has begun to use this new authority.  It issued revised versions of the disclosures that credit bureaus and others must use when they provide someone with a copy of a credit report or take other regular actions.  There’s been no announcement of this on the CFPB website (search it for yourself; I found nothing), but the forms have been revised to note the CFPB existence here – see Appendices K, M, and N. 

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Dual Enforcement of the FCRA

September 14, 2012 Leave a comment

Last year around this time, the Federal Trade Commission, which has been enforcing the FCRA since the law first became effective circa 1970, noted that under new legislation, the new Consumer Financial Protection Bureau would be enforcing the FCRA.  I noted the change and wondered aloud whether the FTC would continue to play a role in FCRA enforcement.

This week, we got an answer to that question:  yes.  The FTC testified to Congress that it still considers FCRA enforcement to be an agency priority.  This means that there will for the foreseeable future be dual enforcement of the FCRA:  by both the FTC and the CFPB.

Should be interesting, especially if the agencies take different approaches to what particular FCRA provisions mean.

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Beware of blurbs about FCRA cases

September 7, 2012 Leave a comment

The August 17, 2012 edition of West’s Pennsylvania Reporter, which summarizes recent judicial decisions in my part of the country, just came around the office.  It indicated that the Eastern District of Pennsylvania recently held that a “consumer did not sustain any damages under Fair Credit Reporting Act (FCRA) due to lost credit opportunities.’  The case is Van Veen v. Equifax, 844 F. Supp. 2d. 599 (E.D. Pa. 2012).  That piqued my interest, as I read it to imply that a court gave a consumer nothing because he hadn’t been harmed.

In reading the case itself, it turns out that there’s no basis for such an implication.  The court held that Dennis Van Veen had a colorable legal claim against AT&T for violating the FCRA (he claimed that it refused to delete an account that he never opened, but which AT&T reported to Experian).  But did AT&T harm Mr. Van Veen by doing this?  The court didn’t say “no”; it said “maybe and no.”  It found that Mr. Van Veen’s only evidence of lost credit opportunities or harm to credit reputation had to do with a December 2008 loan that he applied for and received.  Because he didn’t raise a dispute about the AT&T account until March 2009, the court held – I think correctly – that its refusal to resolve his dispute on his terms caused him harm.

However, the court did what almost every court in the country does – it held that even though he had no firm evidence of emotional distress, merely alleging it was enough to give him the right to plead his case to a jury and let it decide the extent to which his distress was genuine.

Conclusion:  it’s hard for consumers to prove actual financial losses due to FCRA violations, but fairly easy for them to get to the jury on claims of emotional distress.  This isn’t news, but the Van Veen decision does a nice job of illustrating it.

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