Fair Credit Reporting Act Defense
Every year, it seems juries are awarding plaintiffs record-shattering, business-debilitating verdicts in class action lawsuits alleging Fair Credit Reporting Act (FCRA) violations. Credit reporting agencies used to be the only ones sued for FCRA violations. However, times are changing, and now commercial lenders and large companies are frequently defending against FCRA violations— and often paying out multi-million-dollar settlements.
The FCRA protects consumers from inaccurate information in their consumer reports and prevents wrongful disclosures of their private information. The FCRA applies to much more than just credit reports and protects any communications made by a consumer reporting agency that references a consumer’s creditworthiness, credit capacity, credit standing, payment patterns, public records, character, personal characteristics, or personal reputation to be used for establishing a consumer’s eligibility for credit, insurance, employment, or any other authorized purpose. The Federal Trade Commission (FTC) and Consumer Financial Protection Bureau (CFPB) are ceded with consequential regulatory and prosecutorial authority under the FCRA. Still, consumer lawsuits in courts seeking to recover monetary damages for violations of the FCRA are the prevalent avenue for plaintiff’s lawyers looking for swift recovery in lieu of potentially forgiving agency actions.
The FCRA imposes obligations upon consumer reporting agencies (CRAs) and businesses that request consumer reports for employment purposes, credit purposes, or any other authorized purpose. CRAs not only include large consumer credit reporting companies, but also smaller companies that provide personal consumer information for any purpose, such as for employment screening, tenant screening, financial lending screening, trade credit reporting, insurability evaluation, medical purposes, or driver history diligence. The FCRA imposes significant obligations upon CRAs, requiring them to maintain reasonable procedures to ensure the accuracy of the information contained in their reports, perform investigations to correct disputed information, and prevent wrongful disclosures of information. The FCRA also imposes obligations upon businesses or creditors that seek consumer reports by limiting the scope of information that can be requested and requiring them to provide consumers notice of their request or obtain consent. Additionally, businesses or creditors must inform a consumer when their report contained information that affected their decisions or exposed them to potential identity theft. Although the FCRA sets forth a variety of actionable obligations, most private claims center around common themes of negligent or willful disregard of credit reporting quality control procedures, improper credit investigations or credit dispute resolution, or obtaining reporting for impermissible uses. Prevalent defenses often focus on the accuracy in reporting, the reasonableness of the conduct, lack of actual injury, and whether the conduct actually caused the damages aggrieved.
The FCRA imposes civil liability for negligent and willful failures to comply with its requirements and inflicts strict penalties upon its violators. In class actions alleging FCRA violations against a CRA or business, damages resulting from willful failures to comply with the FCRA can add up in a hurry, as plaintiffs can seek statutory damages up to $1,000 per plaintiff, plus punitive damages and attorneys’ fees. Intent is an important element in evaluating FCRA exposure, as an erroneous consumer report does not automatically result in liability. Instead, the FCRA imposes monetary exposure based upon whether the reporting infraction was negligent or willful non-compliance. Negligence-based cases depend on determining whether the defendant acted reasonably and actually caused the harm the plaintiff alleges. Willful violation cases require plaintiffs to prove that the defendant either knowingly or recklessly violated the statute. This often requires proof that the defendant knew that the conduct was violative of the statute and unlawful, and/or that it was so careless not to prevent the mistake that the conduct should be viewed in a light closer to intentional than excusable.
Jimerson Birr offers FCRA claim defense and class action defense services to our clients. Our firm counsels and represents CRAs, businesses and insurers defending against a unique claims and class action claims alleging FCRA violations. The attorneys at Jimerson Birr have extensive experience defending class action claims and are well-equipped to challenge standing and class certification. Our attorneys recognize the procedural nuances associated with asserting FCRA claims and understand the intricacies of our client’s business, allowing them to efficiently sort through the facts of each case and highlight procedural safeguards that ensure compliance. Our attorneys diligently represent our clients throughout the litigation and work closely to develop a defense strategy unique to each situation that assesses risks and costs. Although our firm is renowned for our work in a courtroom, we will explore all available pre-trial avenues in line with client objections that may provide cost-efficient resolutions for our clients. However, should a trial be necessary, we are cognizant of the fact that the reputations of our firm and our client are on the line in that courtroom. When Jimerson Birr’s FDCPA defense lawyers are engaged, our clients rest assured knowing that our firm will provide the best possible defense.
Jimerson Birr offers the following FCRA unique claim and class action defense services including:
- Providing defense counsel for clients facing class action litigation arising from alleged FCRA violations
- Helping our clients understand the elements of an alleged FCRA violation and offering advice on improvements which could prevent future litigation
- Developing a defense strategy that highlights procedural mechanisms employed to ensure FCRA compliance
- Utilizing class action litigation strategies to challenge class certification and standing
- Negotiating and facilitating cost-effective resolutions when appropriate
- Trial counsel that challenges the allegations and limits exposure for damages
Jimerson Birr is a premier law firm with a market-leading defense practice that is tailored to the nuances of the industries we serve. Our teams have a global perspective and strong Florida roots. Our clients look to us to bring a distinctively high degree of quality, passion and creativity to resolve their FCRA challenges effectively and cost efficiently.
We’re honored to work with some of the world’s most accomplished organizations and the leaders who drive them. We know that on any given day our clients are confronting competition, corporate advancement, risk management, process and product innovation, resource allocation, efficiency stewardship and talent oversight problems; some days all the above. When our clients place their FCRA defense matters with us, they enlist sets of broad shoulders that carry their burdens for them so that they no longer feel their weight. This deep business partnership will give us both an opportunity to be at our best.
We draw on the strength of our character and talents to deliver the best of our firm to every client through true collaboration. On those occasions where our client is concerned it may have erred or is accused of being in the wrong, we help them become right. We don’t confuse effort with results, and we focus on the immutable, allied goals at all times. Partnership with Jimerson Birr on a FCRA class action defense matter means that you are not looking in any direction but ahead.