United States: Eleventh Circuit Finds Consumer Report Publication To A Third Party Is Not Required For Plaintiffs To Recover Actual Damages Under FCRA § 1681i(a)

Collins v. Experian Info. Solutions, Inc., 2015 U.S. App. LEXIS 50 (11th Cir. 2015)

Facts: Plaintiff had an Equable Ascent Financial, LLC tradeline on his Experian consumer disclosure in June 2010. Equable sued Plaintiff in state small claims court for an alleged debt. Plaintiff prevailed; and judgment was entered in his favor on July 26, 2010. Plaintiff sent Experian a letter on July 30, 2010 in which he stated that he did not owe Equable any money, the tradeline was wrong, and judgment was entered in his favor in the suit filed by Equable against him. Plaintiff also included the small claims case number and the telephone numbers to the small claims court and to Equable's attorneys in the letter. Because of an alleged zip code discrepancy on the envelope of Plaintiff's July 30 letter, Experian responded by letter to Plaintiff's home address on August 9, 2010 that it had received a suspicious letter regarding Plaintiff's credit file. Experian's August 9 letter advised Plaintiff of how to dispute information on his credit file.

Plaintiff sent a second letter to Experian on August 19, 2010 in which he again stated that he did not owe Equable any money, the tradeline was wrong, and that he won a suit filed against him by Equable. He requested that Experian delete the tradeline and send him an updated disclosure. In response to Plaintiff's August 19, 2010 letter, Experian sent Equable an ACDV, including in the dispute reason that "EQUABLE ASCENT SUED ME FOR THIS DEBT IN JEFFERSON COUNTY ALABAMA AND I WON." Equable verified the tradeline as accurately reporting on Plaintiff's Experian consumer file.

Plaintiff claimed that Experian negligently and willfully violated § 1681i(a) of the FCRA by failing to conduct a reasonable reinvestigation of disputed information in his credit file. The district court granted Experian's motion for summary judgment on Plaintiff's claim.

  • Reinvestigation: The district court determined that there was an issue of material fact as to whether Experian's reinvestigation was reasonable when it disregarded the small claims court information Plaintiff provided and instead relied solely on Equable to verify the debt.
  • Damages: Because the district court determined that there was a genuine issue of material fact regarding whether Experian was negligent in failing to comply with its reasonable reinvestigation obligation, the district court then had to decide whether there was a genuine issue of material fact regarding whether Plaintiff could show actual damages as a result of Experian's alleged FCRA violation. The district court granted summary judgment to Experian on Plaintiff's claim that Experian negligently violated § 1681i(a) because it determined that Plaintiff could not show actual damages since he failed to present evidence that the inaccurate information regarding the Equable tradeline was ever published to a third party.

Noting that it was the first Circuit to address whether a plaintiff seeking damages for a negligent violation of § 1681i(a) must show the inaccurate information was published to a third party, the Eleventh Circuit reversed and remanded. The Eleventh Circuit stated that the important distinction in this case is the difference in the FCRA's definitions of "consumer report" and consumer "file," and that consumer reports are communicated by consumer reporting agencies, while a "file" is retained by them. In other words, the Eleventh Circuit found that a "consumer report" requires communication to a third party, while a "file" does not. Section 1681i(a) imposes a duty of conducting a reasonable reinvestigation of disputed information in a consumer's credit "file." Thus, claims for violations of § 1681i(a) do not require that the disputed information be published to a third party for plaintiffs to recover actual damages.

  • Willfulness: The Eleventh Circuit affirmed the grant of summary judgment in favor of Experian on Plaintiff's claim of willful violation of § 1681i(a). The Eleventh Circuit stated that while Experian relying solely on contacting Equable with an ACDV regarding the disputed tradeline might have been negligent, its conduct did not rise to a level of willfulness, meaning running "a risk of violating the law substantially greater than the risk associated with a reading that was merely careless."

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