In March 2024, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) filed an amicus brief in a case involving the Fair Credit Reporting Act (FCRA) that argued the FCRA requires consumer reporting agencies (CRAs) to perform a “reasonable reinvestigation” when consumers challenge the “completeness or accuracy” of information in their files.
Enacted by Congress in 1970, the FCRA imposes various requirements on CRAs to ensure fair and accurate credit reporting. The CFPB has exclusive rule-writing authority for most provisions of the FCRA and also interprets and enforces the law’s requirements. The FTC has long played a key role in the implementation, enforcement, and interpretation of the FCRA.
In the amicus brief filed in the U.S. Court of Appeals for the Eleventh Circuit, the CFPB and FTC argued that while a district court correctly determined that a reinvestigation was required, the court “erred” in concluding that the defendant CRA did not “negligently or willfully” violate the FCRA because the CRA’s interpretation of the FCRA was not “objectively unreasonable.”
The brief explained that the case involved a consumer who claimed she contacted a CRA after identifying several errors in her credit report regarding her name, address, and Social Security number (SSN). The CRA allegedly responded by instructing the consumer to contact the sources of the inaccurate information and did not delete all of the disputed information.
The brief stated that the consumer filed a lawsuit alleging the CRA negligently or willfully violated the FCRA’s reinvestigation requirement by failing to reinvestigate her dispute regarding her name, address, and SSN. The CRA argued it was not required to conduct a reinvestigation because that information was outside the scope of the FCRA’s reinvestigation provision.
The court held that the FCRA’s reinvestigation requirement applied to the name, address, and SSN information, but it also held that the CRA did not willfully or negligently violate the FCRA because the CRA’s interpretation of the scope of the reinvestigation requirement was, in the court’s view, not “objectively unreasonable,” according to the amicus brief.
The consumer appealed the judgment, arguing the standard used by the court applied to “willful” violations and not the proper “negligence” standard. “Given their roles in administering and enforcing the FCRA, the CFPB and the FTC have a substantial interest in the interpretation and application of the Act’s reasonable reinvestigation requirement for CRAs,” the brief stated.
The brief concluded the Court of Appeals should find the FCRA’s reinvestigation requirement applies to disputes regarding name, address, and SSN information, the CRA’s contrary interpretation could not reasonably have found support in courts, and the district court erred in applying the standard for recklessness and willfulness under the FCRA to negligence claims.
ClearStar is a consumer reporting agency (CRA) specializing in background checks, drug testing, and occupational health screening. ClearStar offers employers compliance services that include a full understanding of the FCRA and other laws affecting background screening in the United States and around the globe. To learn more about ClearStar, please contact us.
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Thomas Ahearn - Digital Content Editor
Thomas Ahearn is a Digital Content Editor at ClearStar, a leading Human Resources (HR) technology company specializing in background checks, drug testing, and occupational health screening. He writes about a variety of topics in the background screening industry including Artificial Intelligence (AI), "Ban the Box," class action lawsuits, credit reports, criminal records, drug testing, Equal Employment Opportunity Commission (EEOC), Fair Credit Reporting Act (FCRA), Form I-9, identity theft, privacy, social media screening, and workplace violence.
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