Written By Digital Content Editor Thomas Ahearn
On July 12, 2022, a federal court rejected an attempt to impose liability against the Chief Executive Officers (CEOs) of the three largest nationwide Credit Reporting Agencies (CRAs) – Equifax, Experian, and TransUnion – over claims that the CEOs and CRAs allegedly violated the federal Fair Credit Reporting Act (FCRA).
Plaintiff claimed the three CRAs and their CEOs allegedly violated the FCRA by failing to respond to communications or remove an errant account from Plaintiff’s credit report and that these actions violated the FCRA’s “reasonable procedures to assure maximum possible accuracy” requirement.
Under FCRA section 15 U.S.C. § 1681e(b): “Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” A copy of the FCRA is available here.
However, United States District Judge Susan M. Brnovich found that “the CEO Defendants are not CRAs for the purposes of the FCRA but are merely officers of the CRAs themselves. The FAC [First Amended Complaint] contains no allegations which would allow the Court to find that the CEOs are themselves CRAs.”
Judge Brnovich continued: “Furthermore, the allegations in the FAC do not allege that the CEOs took actions individually which led to the CRA violations. Instead, the allegations merely conflate the CEOs with the CRAs themselves. This is insufficient for the Court to find liability on behalf of the CEO Defendants individually.”
Judge Brnovich concluded: “Additionally, no allegations in the FAC allege that CEOs were the ‘guiding spirits’ behind the conduct that allegedly caused the FCRA violations. Accordingly, Plaintiff has not alleged sufficient facts to hold the CEO Defendants liable under the FCRA.” A copy of the ruling is available here.
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