Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On September 9, 2020, the United States Court of Appeals for the Fifth Circuit affirmed a district court’s dismissal of Hammer v. Equifax and Experian that claimed two consumer reporting agencies (CRAs) violated the federal Fair Credit Reporting Act (FCRA) because they failed to include a single credit item on credit reports.

Plaintiff Hammer filed a lawsuit under the FCRA against the two defendant CRAs – Equifax Information Services and Experian Information Solutions – after they deleted a favorable credit item from his credit report and refused to restore it. The district court dismissed Hammer’s claims and the Fifth Circuit affirmed the decision.

According to the Fifth Circuit, Plaintiff obtained a Capital One credit card in 2010 and Equifax, Experian, and a third CRA TransUnion reported the account until 2017. After learning the CRAs stopped reporting the account, he requested they restore it. TransUnion complied with his request but Equifax and Experian refused.

Plaintiff claimed his credit score fell as a result of losing a positive and favorable credit item from his report which caused him to be denied credit. He sued Experian and Equifax for negligent and willful violations of the FCRA. The district court granted the Defendants’ motions to dismiss and Plaintiff appealed the decision.

The Firth Circuit Court of Appeals held “the omission of a single credit item does not render a report ‘inaccurate’ or ‘misleading’” and a requirement that a credit report must reflect all relevant information on a consumer “would be impossible for a CRA to satisfy, as creditors furnish CRAs with consumer information only on a voluntary basis.”

Enacted by Congress in 1970, the FCRA 15 U.S.C § 1681 promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs, and protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, including consumer credit information.

Employment Screening Resources® (ESR) – a leading global background check provider – offers background screening solutions that comply with the FCRA as well as whitepapers on how employers may avoid FCRA lawsuits and on how CRAs may avoid FCRA lawsuits. To learn more about ESR, visit www.esrcheck.com.

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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