Last month, on February 16, 2021, the United States District Court Middle District of Florida Tampa Division denied a motion to dismiss by Defendant when Plaintiff claimed that Defendant allegedly violated the federal Fair Credit Reporting Act (FCRA). Plaintiff claims that Defendant requested their credit report from two Consumer Credit Reporting Agencies without a “permissible purpose” under the FCRA. 

Plaintiff alleged the Defendant had obtained their credit report without their consent for “marketing purposes” which is not a permissible purpose under the FCRA. The FCRA prohibits a person from using or obtaining a consumer report for any purpose unless “the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished” under the FCRA and “the purpose is certified in accordance” with the FCRA.

Plaintiff alleged that Defendant engages in consumer lending of high-interest bearing loans and had obtained Plaintiff’s credit report two times without her consent to assess whether she would be a good loan prospect for Defendant’s marking efforts.

The United States District Judge Kathryn Kimball Mizelle stated in the order that the court must accept the conduct is not a permissible purpose as true at this point under the FCRA. She also stated that “Defendant fails to make any argument that it obtained Plaintiff’s credit report for a permissible purpose or under a reasonable interpretation of the statute. Accepting Plaintiff’s allegations as true and viewing them in the light most favorable to her, the Court concludes that Plaintiff has adequately pleaded enough facts to proceed past the motion-to-dismiss stage.”

In 1970, Congress enacted the FCRA to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRA’s), protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulate the collection, dissemination, and use of consumer information, including consumer credit information. 

In background screening, lawsuits for alleged violations of the FCRA have become very common and can result in monetary awards in thousands or even millions of dollars. In 2020, FCRA lawsuit settlement proposals reached up to an $18 million. According to the provider Employment Screening Resources® (ESR), FCRA lawsuits will continue to serve as a legal compliance signposts for employers conducting background checks on job applicants.