Ninth Circuit Affirms Consumers Must Suffer Actual Harm To Claim Violation of FCRA

In a recent case against one of the three largest credit reporting agencies (CRA), the Ninth Circuit Court has affirmed a judgment against a consumer who filed a lawsuit against the CRA, claiming they committed a willful or negligent violation of the Fair Credit Reporting Act (FCRA). The ruling confirmed that in order to support a claim of willful or negligent violations, a consumer must be able to point to intentional or reckless actions for willful claims or some form of concrete harm for claims of negligence.

In this case, the plaintiff learned of an error in their credit report claiming they owed a debt that had been previously discharged by a bankruptcy court. The plaintiff requested that the CRA correct this. The CRA complied but reported the date of discharge as several months later than it really was. Upon discovering this, the plaintiff filed suit alleging willful or negligent violation of the FCRA.

The district court ruled in favor of the CRA. However, the plaintiff appealed to the Ninth Circuit Court. Upon this appeal, the Court examined both the claims of willful and negligent violation and considered them separately. The Ninth Circuit found that the plaintiff had failed to demonstrate that the CRA had knowingly altered the date of the discharge, and therefore this was at most negligence.

To consider the claim of negligence, the Court looked for actual harm, which is the minimum standard for claims of FCRA negligence. The plaintiff had claimed the date affected their credit score, caused emotional distress, and cost both time and money to correct.

The Ninth Circuit found that none of these claims met the standard of actual harm. The plaintiff failed to demonstrate that the inaccurate date affected their credit score, and the time and money spent were solely to correct the report, not because of it. The Court found that the claims of emotional distress simply did not meet the standards necessary to meet the threshold of an FCRA claim.

This case shows that the bar for an FCRA claim is high for claims of emotional distress, and to prevail in a case of negligent FCRA violation, plaintiffs must be able to point to some concrete harm.