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On March 29, the CFPB and the FTC jointly filed an amicus brief with the Eleventh Circuit in a matter involving a dispute under the Fair Credit Reporting Act. The case involves a consumer who filed disputes with a consumer reporting agency (CRA) after discovering multiple errors in her credit file, including incorrect personal information. However, the CRA failed to delete the disputed information, notify any furnishers of the consumer's dispute, or provide the sources of the disputed information. The consumer sued, alleging the CRA violated the FCRA's reinvestigation requirement by failing to reinvestigate her dispute regarding her name, address, and SSN information. The CRA claimed the text of the CRA did not require it to reinvestigate incorrect personal identifying information. At summary judgment, the district court found that while the reinvestigation requirement applied to personal identifying information, the CRA did not "willfully or negligently" violate the FCRA because its interpretation of the reinvestigation requirement was not objectively unreasonable.
In its amicus brief, the CFPB and FTC argue that the district court was indeed correct in finding that the FCRA's reinvestigation requirement applies to consumer disputes regarding name, address, and social security number information. But they claim the district court erred in holding that the CRA did not negligently or willfully violate the FCRA. First they claim the statute's text makes it clear that identifying information, such as names, addresses, and SSNs, are "information contained in [the] consumer's file" to which the reinvestigation requirement applies. Moreover, the agencies claimed the district court applied the wrong standard of liability, holding that the CRA needed to act recklessly (and therefore willfully) to be liable under the statute, when in fact it needed only to act negligently. The agencies urged the court not to let the CRA evade responsibility for failing to conduct a proper investigation.
Putting It Into Practice: The CFPB continues to focus on CRA and their reporting obligations (see previous blog posts on the CFPB's Guidance on FCRA Compliance Ensure here). CRAs should pay close attention to this decision and its eventual outcome as it may impact their responsibilities to reinvestigate disputed information.
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