In February 2022, the U.S. Court of Appeals for the Ninth Circuit found a tenant screening company did not “willfully or negligently” violate the Fair Credit Reporting Act (FCRA) by providing a consumer report that contained a non-conviction record more than seven years after the date of the charge.
Filed in 2011, the lawsuit claimed the tenant screening company issued a consumer report that included a non-conviction record predating the report by more than seven years in violation of the FCRA. The screening firm argued the record was included because it was less than seven years after the charge was dismissed.
Under FCRA § 1681c(a)(5): “Requirements relating to information contained in consumer reports [§ 1681c]” (a) Information excluded from consumer reports. (5) Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years.
Two agencies that enforce the FCRA – the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC) – filed an amicus brief in 2013 supporting the argument that the seven-year time period for non-conviction records started at the time of the charge and not at the time of dismissal.
The Ninth Circuit upheld the lawsuit’s dismissal: “Defendant introduced evidence that its interpretation was consistent with industry norms. The FTC’s only guidance on the question at the time (although discussing the statute before the 1998 amendment) appeared to permit reporting the charge.”
The court found no proof of negligence or willfulness: “We cannot say, nor could any other reasonable fact finder, that on this record Defendant’s violation of § 1681c(a)(5) was negligent, much less willful.” Enacted in 1970, the FCRA promotes the accuracy, fairness, and privacy of consumer information.
ClearStar – a Hanover Investors portfolio company – is a leading provider of Human Capital Integrity℠ technology-based services specializing in background, credit, and medical screening. To learn more about ClearStar, please visit www.clearstar.net. Follow ClearStar on Facebook, Twitter, and LinkedIn.