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Fair Credit Reporting: 10.4.6.3 Proof of Malice or Willful Intent

A factual record is generally necessary for a court to determine whether qualified immunity should bar a claim.198 Once discovery commences, practitioners should prepare to defend a summary judgment motion with evidence that could meet the stringent New York Times standard.199 For example, evidence that a furnisher verified false information as part of a reinvestigation of a dispute, after receiving strong evidence that the item was false, could suffice to survive a furnisher’s motion f

Fair Credit Reporting: 10.4.6.4 Information Must Be False

The FCRA’s qualified immunity provision requires that the tort claims not only establish malice or willful intent to injure, but also that the reported information was false.208 This imposes no new requirement for defamation claims where falsehood is an element of the tort and truth is a complete defense. But this does add a new element to negligence claims and may limit the effect of privacy torts.

Fair Credit Reporting: 10.5.1 Advantages of a Tort Claim

Common law tort claims are still widely used to challenge inaccurate reports on commercial businesses (often called “mercantile reports” in the case law). But the FCRA has largely replaced tort claims as a cause of action for consumer reporting issues. One reason for this is that the FCRA, like the tort claims, provides a cause of action for actual and punitive damages. But, unlike tort claims, the FCRA also provides for the consumer’s attorney fees.

Fair Credit Reporting: 18.1 Introduction

The Fair Credit Reporting Act (FCRA) protects a limited segment of financial privacy, by regulating consumer reporting agencies (CRAs) that collect credit and certain other information about consumers, those who provide information to the CRAs, and those who seek information from CRAs. However, many consumer financial transactions do not fall within the FCRA, and other sources of privacy law must be examined to see if they can protect personal financial data from those who seek to acquire and exploit it.

Fair Credit Reporting: 10.5.3 Invasion of Privacy Claims

Invasion of privacy is an umbrella term that generally comprises four torts: appropriation of name or likeness, intrusion upon seclusion, publicity given to private life, and publicity placing one in a false light.238 The last three of these have the most potential to apply to a consumer report situation, and are discussed in more detail in Chapter 18, infra.

Fair Credit Reporting: 10.5.4 Negligence Claims

The development and application of negligence law to consumer reporting activities was advancing when the FCRA was enacted. A few courts had expressly held CRAs liable for negligence,239 and another implied the possibility of a claim for negligent misstatements injuring a consumer.240 Moreover, the proof required to establish malice to overcome a CRA’s conditional privilege defense was beginning to approach traditional negligence standards.

Fair Credit Reporting: 10.6.1 State Credit Reporting Statutes

Most states have laws relating to consumer reporting agencies.242 Often, these laws mirror the federal statute. However, in many instances the state laws will provide important additional protections for consumers, or contain different statutes of limitation, remedies, or scope. Consequently, it is generally best to bring an action under both the federal and state statutes. In fact, where a consumer does not want an action removed to federal court, raising only the state law claim may be preferable to bringing an FCRA action.

Fair Credit Reporting: 10.7.3.5 Provision Regarding Businesses and Identity Theft

Business entities must provide a thief’s information to an identity theft victim.408 Even though there is no private right of action to enforce this provision,409 the FCRA preempts state laws that have the same subject matter.410 Nonetheless, this provision should not preempt actions alleging that the business entity was negligent at common law in providing an identity thief with the credit, goods, or services in the victim’s name, either because s

Fair Credit Reporting: 10.7.3.6 Obligations Arising in Contracts Are Not “Imposed” Under State Law and Can Be Enforced

A number of courts have concluded that preemption does not apply to breach of contract claims based on the reporting of negative information in violation of the terms of a settlement or other contractual agreement.413 The decisions are based on the argument that contractual obligations are entered into voluntarily by the parties, not “imposed” by state law, and cite Cipollone v.

Fair Credit Reporting: 10.7.4.3 Cases Holding That Only Statutory, Not Common Law Claims, Are Preempted

FCRA section 1681t(b) begins: “No requirement or prohibition may be imposed under the laws of any State.” Thus, the preemption provision applies only to the “laws of any State.” That language, when read in conjunction with section 1681h(e) limiting furnishers’ qualified immunity from tort claims, strongly suggests that Congress did not intend to preempt state common law claims, as opposed to state statutory or regulatory claims, brought for behavior that may also violate the FCRA.

Fair Credit Reporting: 10.7.4.5 Cases Preempting Only Claims Closely Resembling an FCRA Provision

As discussed elsewhere in this chapter, the FCRA’s preemption provisions should be read narrowly.484 Courts engaging in careful analysis examine the elements of the plaintiff’s claims to determine if they really relate to subject matter regulated by one of the enumerated provisions listed in section 1681t(b)(1). This analysis focuses on the “subject matter regulated by” phrase rather than the “requirement or prohibition” phrase.485

Fair Credit Reporting: 10.7.5 Affiliate Information Sharing Preemption—§ 1681t(b)(2)

Section 1681t(b)(2) preempts state requirements and prohibitions “with respect to the exchange of information among persons affiliated by common ownership or common corporate control.”527 The preempting provision has an exception for a Vermont statute, as it existed in 1996, that requires a consumer’s consent to obtain a consumer report, unless the report is obtained pursuant to a court order.528

Fair Credit Reporting: 10.7.6 Disclosure Preemption—§ 1681t(b)(3)

Section 1681t(b)(3) preempts state requirements or prohibitions with respect to various disclosures required by sections 1681g(c), 1681g(d), 1681g(e), 1681g(f), and 1681g(g).531 Section 1681t(b)(3)’s preemption provision explicitly preserves California’s532 and Colorado’s533 preexisting disclosure statutes, as in effect on December 4, 2003.

Fair Credit Reporting: 10.7.8.2 Consumer Reporting Agency Provisions That Preempt State Law

Section 1681t(b)(5) references conduct required by a number of FCRA provisions dealing with CRA obligations, and provides that “no requirement or prohibition may be imposed under the laws of any State . . . with respect to the conduct required by” those specific provisions. One provision is section 1681c-1, relating to identity theft prevention, fraud alerts, and active duty alerts. In general, the provision requires more of nationwide CRAs than other CRAs, imposing few duties on resellers and non-nationwide CRAs.

Fair Credit Reporting: 10.7.8.3 User Provisions That Preempt State Law

Section 1681t(b)(5) refers to a number of user provisions that preempt state laws that regulate the same conduct. One provision is section 1681c-1, relating to identity theft prevention, fraud alerts, and active duty alerts, requiring specific conduct of users when they are alerted to potential identity theft.

Fair Credit Reporting: 10.7.8.4 Furnisher Provisions That Preempt State Law

Section 1681t(b)(5) refers to a number of furnisher provisions that preempt state laws that regulate the same conduct. One such provision is section 1681m(f). Where identity theft leads to an FCRA block on the reporting of information about a debt, and the CRA so notifies the furnisher, the furnisher cannot sell or collect on that debt.

Fair Credit Reporting: 10.7.8.5 Debt Collector Provisions That Preempt State Law

Section 1681t(b)(5) refers to one debt collector provision that preempts state laws that regulate the same conduct. Section 1681m(g) requires certain conduct from a debt collector collecting on a debt owed a third party, after the collector has been notified that information related to the debt may be fraudulent because of identity theft. Once so notified, the debt collector must pass this information on to the party owed the debt.