FCRA Compliance

Eyes on FCRA Violations

Supreme Court Case to Watch

In a recent attorney/client letter, Covington & Burling LLP, alerted their clients of a case that could have far reaching implications for businesses that work with consumer information and/or become targets of class action legal proceedings. A class action lawsuit, Robins v. Spokeo, Inc., is the case to watch. Robins, the plaintiff alleges that the public information aggregator, Spokeo, Inc. violated the Fair Credit Reporting Act (FCRA) because information about the plaintiff on the Spokeo website were false.

Since we didn’t know much about Spokeo, we did a quick internet search and also looked at Spokeo’s website to see what we could learn about how the violation came about but we didn’t see any type of consumer credit information being advertised…so why is the FCRA involved? Digging a little deeper, we found various sources such as Fox News that claimed Spokeo provided information such as estimated income, religion, spouse’s name, credit status and number of people in the household at some point in time. Voila! Whatever it may be, somewhere along the line someone believes that Spokeo crossed the line and is filing charges.

So you may be asking, what is the big deal and how might this affect my business? Here is the story:

The plaintiff initially filed suit and was unable to provide any proof of damages or injury incurred as a result of Spokeo’s purported inaccurate personal information so the case was dismissed. Then there was an appeal and after a bit of ping pong in the legal system, the federal courts are now agreeing to hear the case without the constitutional requisites under Article III for the existence of a standing in court, also known as a hearing or trial. This could lay the groundwork for similar cases in the future pending the U.S. Supreme Court’s decision about whether a plaintiff can sue for a statutory violation of federal law despite suffering no concrete harm.

We see this as an opportune time to remind our friends, clients, and partners that it is more important than ever to make sure your business in in full compliance with the laws surrounding consumer privacy and data usage, this includes your vendors all the way up the ladder from data broker to data aggregators/suppliers and lenders that extend credit on behalf of you or your client’s business.

According to the client alert issued by Covington & Burling LLP, the Supreme Court’s opinions could have broader implications beyond the FCRA. Numerous other federal laws—such as the Truth in Lending Act, the Fair Debt Collection Practices Act, the Telephone Consumer Protection Act, the Electronic Communications Privacy Act, and the Stored Communications Act—have been construed to give plaintiffs a private right of action to recover statutory damages even if they cannot demonstrate they have suffered actual harm.

In addition to this case playing out in the high courts, there are also other consumer protection agencies and legal professionals that are waiting at the helm, looking for “opportunities” to identify errors, fraud and misuse of consumer data that falls under FCRA regulations. For example, the National Association of Consumer Advocate’s (NACA) recently held their 2015 Fair Credit Reporting Act Conference in Las Vegas, Nevada with an invitation to all attorneys and practitioners interested in learning how to pursue and grow their business going after FCRA disputes. Their agenda was for conference attendees to “…learn how to expand their practices to encompass more clients, bring more complex cases to successful resolution, and find new partners for co-counseling.” NACA describes FCRA disputes as a growing field of consumer law with large payouts.

It’s worth saying again. If you are not already paying close attention to how consumer data plays a role in your business, now is the time to make sure you and your data partners and clients are in full compliance and have some protection for your business.

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