Appeals Court Affirms Ruling that FCRA Requires Disputes to Come to CRAs Directly from Consumers

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

The United States Court of Appeals for the Ninth Circuit has affirmed an earlier summary judgement by a district court in favor of Experian – a consumer reporting agency or CRA – that the federal Fair Credit Reporting Act (FCRA) requires disputes to come “directly” to CRAs from consumers.

In the case of Warner v. Experian Information Solutions, Inc., a credit repair organization, Go Clean Credit, sent letters to Experian on behalf of plaintiff Trinity Warner, asserting items in plaintiff’s credit file were incorrect and asking Experian to conduct a reinvestigation to verify the accuracy of the items.

A panel of three Circuit Judges held Experian was not required to initiate a reinvestigation under FCRA Section 16881i because the plaintiff did not “directly” notify them of the disputed items, and did not violate the “reasonable procedures to assure maximum possible accuracy” of FCRA Section 1681e(b).

Section 1681i of FCRA requires CRAs such as Experian to conduct a “reasonable reinvestigation” of any item in a consumer file that “is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such a dispute…” within 30 days of receiving notice of the dispute.

The opinion by Judge Richard R. Clifton stated: Because Warner played no part in drafting, finalizing, or sending the letters Go Clean Credit sent to Experian on his behalf, those letters did not come directly from him. Consequently, under Section 1681i, Experian was not required to initiate a reinvestigation.

Passed by Congress in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs. A complete copy of the FCRA is available online at www.ftc.gov/enforcement/rules/rulemaking-regulatory-reform-proceedings/fair-credit-reporting-act.

Employers are still targeted by FCRA lawsuits even after the U.S. Supreme Court ruled plaintiffs must prove “concrete injury” for bare violations of federal statutes like the FCRA and Employment Screening Resources® (ESR) selected this trend as one of the “ESR Top Ten Background Check Trends” for 2019. 

Employment Screening Resources® (ESR) offers two complimentary white papers – “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” and “Common Ways Consumer Reporting Agencies are Sued Under the FCRA” – to help employers avoid FCRA class action lawsuits.

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