Seven-Year Measuring Period for Criminal Charges Under FCRA Runs from Date of Entry Not Disposition

Fair Credit Reporting Act (FCRA)

Written By ESR News Editor Thomas Ahearn

On May 14, 2019, the United States Court of Appeals for the Ninth Circuit ruled in a lawsuit filed by a consumer against a consumer reporting agency (CRA) that the seven-year measuring period for criminal charges under the federal Fair Credit Reporting Act (FCRA) rule that prohibits CRAs from reporting any “record of arrest” older than seven years runs from the date of entry and not the date of disposition.

Plaintiff Gabriel Moran sued the CRA for issuing a background check report in 2010 with his criminal history – including a misdemeanor charge in 2000 – and violating FCRA and the California Investigative Consumer Reporting Agencies Act (ICRAA). A district court dismissed the claim that the CRA violated the FCRA seven-year rule since the reporting period for criminal charges began on the “date of disposition” and not the date of entry.

The Ninth Circuit disagreed and concluded the reporting period for a criminal charge began on the “date of entry” and not date of disposition since “the dismissal of a charge does not constitute an adverse item and may not be reported after the reporting window for the charge has ended.” Since the CRA possibly violated the FCRA by reporting the 2000 charge, the case was remanded to the district court.

FCRA § 605(a) details information that is excluded from consumer reports and FCRA § 605(a)(2) specifically prohibits CRAs from including the following charges in a consumer report: “Civil suits, civil judgments, and records of arrest that, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.”

FCRA § 605(a)(5) also prohibits CRAs from reporting: “Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years.” The reporting periods have been lengthened for certain adverse information pertaining to U.S. Government insured or guaranteed student loans, or pertaining to national direct student loans.

Enacted by Congress in 1970, FCRA 15 U.S.C. § 1681 promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs and was intended to protect consumers from the willful and/or negligent inclusion of inaccurate information in their credit reports. The FCRA regulates the collection, dissemination, and use of consumer information, including consumer credit information.

Costly class action lawsuits involving the FCRA are one of the main compliance concerns for employers performing background checks for employment purposes in an increasingly complex legal environment in the United States and this trend was chosen by leading global background check firm Employment Screening Resources® (ESR) as one of the “ESR Top Ten Background Check Trends” for 2019.

Employment Screening Resources® (ESR) offers two complimentary white papers that examine the many causes behind FCRA lawsuits: “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” and “Common Ways Consumer Reporting Agencies are Sued Under the FCRA.” The ESR White Paper Library is available at www.esrcheck.com/Tools-Resources/Whitepaper-Library/.

NOTE: Employment Screening Resources® (ESR) does not provide or offer legal services or legal advice of any kind or nature. Any information on this website is for educational purposes only.

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