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Fair Credit Reporting: 11.2.3.3.3 Possibility of annihilating damages

As with other federal consumer protection statutes, the FCRA imposes no limit on the size of a class action award for actual damages.127 Unlike certain others, including TILA, the FDCPA, and the ECOA, however, it also does not cap the amount of an award of statutory damages in class actions.128 As a result, one issue that sometimes arises under the FCRA but not under these other statutes, is whether putative class actions for statutory damages should be denied certification as not being the supe

Fair Credit Reporting: 11.2.3.3.4 Alternative of individual suits

Defendants often contend that a class action should not be certified because it would not be superior to individual suits, as required by Federal Rule of Civil Procedure 23(b)(3). The Fourth Circuit rejected this contention in Stillmock v. Weis Markets, Inc.,140 holding that a class action is superior because, inter alia, even the availability of punitive damages and attorney fees is unlikely to result in enforcement of FCRA by individual actions at a scale comparable to the potential enforcement by way of class action.

Fair Credit Reporting: 11.2.3.3.5 Declaratory or injunctive relief

A separate issue regarding class certification is whether a Rule 23(b)(2) class for declaratory or injunctive relief may be certified under the FCRA. Because the majority view is that neither declaratory nor injunctive relief is available under the federal FCRA in any kind of action,142 cases discussing whether the criteria for certification of a Rule 23(b)(2) class have been satisfied in this context are rare.

Fair Credit Reporting: 11.2.3.4 Examples of Class Settlements

  • Credit/Debit Card Number Truncation Cases: Brown v. 22nd Dist. Agric. Ass’n, 2017 WL 2172239 (S.D. Cal. May 17, 2017) (despite misgivings, approving class settlement providing for $.50 reduction in future entrance fees for up to 1.5 million class members where fairground vendor printed entire expiration date of credit card); Gonzalez v. The Harris Ranch Beef Co., 2015 WL 756541 (E.D. Cal. Feb. 23, 2015) (preliminary approval: $90,500 for class of 281,000); Torres v. Pet Extreme, 2015 WL 224752 (E.D. Cal. Jan.

Fair Credit Reporting: 11.3.1.2 Standing in State Courts

Article III standing doctrine does not apply in state courts, and standing requirements vary from state to state.222 Indeed, this fact was noted by Justice Thomas in his dissenting opinion in Ramirez.223 The FCRA permits claims to be brought in state court.224 Thus, depending on the standing requirements in their states, practitioners may want to consider filing FCRA actions in state court.

Fair Credit Reporting: 11.3.3 Obsolete Information

The FCRA prohibits most adverse items of information over seven years old from being included in consumer reports, with the exception of bankruptcies (which may be reported for ten years) and criminal convictions (which may be reported indefinitely).272 Violation of this provision presents clear concrete harm, in that there is a disclosure of negative information that Congress believed should not be disseminated as well as a violation of a person’s privacy interests.

Fair Credit Reporting: 11.3.4.1 Claims for Failure to Follow Reasonable Procedures to Assure Maximum Possible Accuracy

As noted above, the primary claims at issue in Spokeo and Ramirez were violations of section 1681e(b)’s requirement that CRAs “follow reasonable procedures to assure maximum possible accuracy of” consumer reports. This is a typical claim brought when a consumer’s report contains an inaccuracy. In most cases, the inaccuracy is obviously harmful on its face (e.g., late payment, defaulted credit account, debt in collection, criminal history, eviction).

Fair Credit Reporting: 11.3.4.2 Failure to Conduct a Reasonable Reinvestigation of a Dispute

Another of the key protections of the FCRA is the requirement for CRAs and furnishers to conduct a reasonable investigation if the consumer disputes an item in their credit file.304 The classic case under this provision involves the failure of a CRA or furnisher to conduct a reasonable investigation where the dispute involves an error consisting of adverse information. In such cases, there should be little doubt that there is a concrete injury.305

Fair Credit Reporting: 11.3.5.1 Generally

The FCRA contains a number of requirements for CRAs, furnishers, and users to provide notices to consumers. Note that for many of these notices, there is no private right of action for failure to provide them.314 Furthermore, the vast majority of courts have held that the adverse action notice requirement established by section 1681m is not privately enforceable.315

Fair Credit Reporting: 11.3.5.5 CRA Notices to Users and Furnishers

The FCRA requires CRAs to provide certain notices to users and to furnishers, for which the CFPB prescribes the contents.385 The notice to users was one of the claims in Spokeo v. Robins, and the majority specifically referenced it by stating: “A violation of one of the FCRA’s procedural requirements may result in no harm.

Fair Credit Reporting: 11.3.6 FACTA Credit and Debit Card Truncation Requirement

The FCRA, as amended by the Fair and Accurate Credit Transactions Act of 2003 (FACTA), requires merchants to truncate credit and debit card numbers on electronically printed receipts and prohibits them from printing the expiration date.388 Congress enacted this provision to reduce the risk of identity theft, based on its determination that including the expiration date and more than the last five digits of a credit or debit card number on transaction receipts created an unacceptable the risk of theft.

Fair Credit Reporting: 11.4.1 FCRA Claims May Be Brought in Federal or State Court

The FCRA provides that actions may be brought in federal courts without regard to the amount in controversy, or in any other court of competent jurisdiction.436 Bringing an action in state court does not alter substantive rights.437 If state court is the preferred forum, one advantage of including an FCRA claim is that it authorizes an award of punitive damages under certain circumstances, while state claims may not.

Fair Credit Reporting: 11.4.3 Personal Jurisdiction

Personal jurisdiction must exist to proceed against a defendant. However, unlike subject matter jurisdiction, personal jurisdiction may be waived if not raised as an affirmative defense in the initial answer to the complaint.456 When challenged, the plaintiff bears the burden of establishing through specific facts and admissible evidence that personal jurisdiction exists over a non-resident defendant.457 Often, the plaintiff lacks such evidence at the start of a case.

Fair Credit Reporting: 10.7.4.1 Generally

When a furnisher provides false information to a CRA, and a consumer seeks to bring a state law claim against the company, both the preemption and qualified immunity provisions of the FCRA may be implicated. This situation arises frequently, because the FCRA does not provide a private right of action to enforce the accuracy requirements it imposes on furnishers (with one exception),417 and injured consumers therefore have no remedy outside of state law (either state statutes or common law).