Ninth Circuit Ruling Limits Scope of Required FCRA Disclosures

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The U.S. Court of Appeals for the Ninth Circuit has recently affirmed a district court’s decision to deny a motion to remand and granted a motion to dismiss a putative class action alleging that a major credit reporting bureau had violated the Fair Credit Reporting Act (FCRA) by failing to disclose all information in the consumer’s file upon request. In its ruling, the Ninth Circuit found that the consumer reporting agency (C.R.A.) was under no obligation to release the allegedly missing information.

In this case, the plaintiffs argued that a C.R.A. had committed violations under 15 U.S.C. Section 1681g(a)(1), (3), and (5) by failing to disclose behavioral data from its marketing database, “soft inquiries” from third parties and affiliates, the identity of certain parties who procured consumer reports, and the date on which employment data was reported.” 

After the C.R.A. removed the case to a federal district court, the plaintiff moved for the case to be remanded to a state court arguing that the C.R.A. had failed to establish that the plaintiff’s had suffered an injury to satisfy Article III requirements.

The Ninth Circuit rejected this argument finding that the C.R.A. had suitably established that the plaintiff’s pleadings concerned particularized privacy and information interests. The court found that this was sufficient under the Spokeo III test because the statutory provisions in question were created in order to protect consumers’ interests in privacy and accuracy rather than procedural rights alone.

After finding that the plaintiffs held standing, the Ninth Circuit looked to the merits of their claim that the C.R.A. had violated 15 U.S.C. §1681g several points of the FCRA. 

The District Court rejected the plaintiff’s argument finding that the C.R.A. had no obligation to supply this information in the required FCRA disclosures. Learn More

The Ninth Circuit affirmed this ruling finding that the wording that a C.R.A. must, upon request, provide “all information in the consumer’s file” did not mean that a C.R.A. must include all potential data that could be furnished; instead, it must supply information “similar to that shown to have been included by the C.R.A. in a consumer report in the past or planned to be included in the future.”

For the plaintiff’s argument that the C.R.A. should have disclosed “soft inquiries” that were performed under the FCRA’s requirement for disclosure of all parties who have requested a consumer report, the Ninth Circuit found that these inquiries do not actually involve the disclosure of a consumer report, nor have they ever previously been disclosed or are they planned to be. 

Therefore, they do not need to be disclosed. For the plaintiff’s specific argument that two of the soft inquiries were for promotional purposes and should have been identified, the Ninth Circuit concluded that they did not lead to a “transaction” and therefore need not be included.

As a result, the Ninth Circuit affirmed the dismissal of the plaintiff’s claims. Though this ruling refused to accept the broad reading of the FCRA, it provides a clear analysis of the components that must be included in a consumer disclosure.

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