15 U.S.C. § 1681c-2 – Block of Information Resulting from Identity Theft: Statutory Language for the Defense Lawyer of Class Action Lawsuits Under the FCRA (Fair Credit Reporting Act)

As a resource for attorneys defending against class actions under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide the text of the FCRA. This article sets forth additional provisions concerning identity theft:

§ 1681c-2. Block of information resulting from identity theft

(a) Block.

Except as otherwise provided in this section, a consumer reporting agency shall block the reporting of any information in the file of a consumer that the consumer identifies as information that resulted from an alleged identity theft, not later than 4 business days after the date of receipt by such agency of–

(1) appropriate proof of the identity of the consumer;

(2) a copy of an identity theft report;

(3) the identification of such information by the consumer; and

(4) a statement by the consumer that the information is not information relating to any transaction by the consumer.

(b) Notification.

A consumer reporting agency shall promptly notify the furnisher of information identified by the consumer under subsection (a) –

(1) that the information may be a result of identity theft;

(2) that an identity theft report has been filed;

(3) that a block has been requested under this section; and

(4) of the effective dates of the block.

(c) Authority to Decline or Rescind

(1) In general.

A consumer reporting agency may decline to block, or may rescind any block, of information relating to a consumer under this section, if the consumer reporting agency reasonably determines that–

(A) the information was blocked in error or a block was requested by the consumer in error;

(B) the information was blocked, or a block was requested by the consumer, on the basis of a material misrepresentation of fact by the consumer relevant to the request to block; or

(C) the consumer obtained possession of goods, services, or money as a result of the blocked transaction or transactions.

(2) Notification to consumer.

If a block of information is declined or rescinded under this subsection, the affected consumer shall be notified promptly, in the same manner as consumers are notified of the reinsertion of information under section 1681i(a)(5)(B) of this title.

(3) Significance of block.

For purposes of this subsection, if a consumer reporting agency rescinds a block, the presence of information in the file of a consumer prior to the blocking of such information is not evidence of whether the consumer knew or should have known that the consumer obtained possession of any goods, services, or money as a result of the block.

FCRA Class Actions Statutes & Rules Uncategorized

Centuori v. Experian-FCRA Class Action Defense Cases: Consumer Reporting Agency May Be Liable Under Federal Fair Credit Reporting Agency (FCRA) For Failing To Ensure Public Defender Sought Consumer Report For Permissible Purpose Arizona Court Hold

Federal District Court Denies Defense Motion to Dismiss FCRA Claims Against Consumer Reporting Agency Because a Jury Could Find that it Acted Recklessly in Allowing Public Defender’s Investigator to Access Consumer’s Credit Report Even Though Reasons Given were Facially Valid

A consumer filed suit against credit reporting agencies for violating the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq., after a public defender’s office twice requested and received a credit report for the consumer, an alleged eyewitness to a crime, “in an attempt to impeach his credibility on the theory that his poor credit history created a financial motive to testify against the criminal defendant.” Centuori v. Experian Information Solutions, Inc., 431 F.Supp.2d 1002 (D. Ariz. 2006). The investigator from the public defender’s office gained access to the credit report through a written agreement with Merchants Information Solutions (MIS), which in turn had access to Experian’s consumer records through an agreement whereby MIS promised to ensure that MIS’s customers utilized Experian’s records only for lawful purposes and in compliance with all state and federal laws. In 1998, the public defender’s office had executed a “Permissible Purpose Certificate” for MIS “which listed the permissible and impermissible purposes of access a credit history under the FCRA.” Id., at 1004-05 (footnote omitted).

In 2001, Experian allowed MIS customers direct access to its database via the Internet, thereby saving Experian’s millions of dollars. Experian’s internal policies required that access requests be “properly validated and authorized before access is provided.” Centuori, at 1005. Experian’s policies also generally disallowed access to records by private investigators and attorneys (save for attorneys involved in debt collection) “because of a ‘high risk’ that they would access credit reports for impermissible purposes”; nonetheless, Experian accepted an application from the “Chief Criminal Investigator” of the “Pima County Public Defender,” and provided him with a user ID and password. Id. The access underlying the lawsuit consisted of two requests by the investigator for “collection purposes” and “government fee for service” – both of which are “facially proper purposes under the FCRA,” id., at 1006, though the true purpose is noted above, id., at 1007-08.

Class Action Court Decisions FCRA Class Actions Uncategorized

Beneficial Mortgage TILA Class Action Defense Case: By Joining Class Action Settlement Homeowners Released Any Federal Truth In Lending Act (TILA) Claims Against Lender Virginia Court Holds

Federal District Court Grants Defense Motion to Dismiss TILA Claims Against Lender Upholding Releases Signed by Plaintiffs and Distinguishing Case from Others that Held TILA Releases Void

Two homeowners filed suit against a lender seeking rescission and statutory damages for its alleged failure to make disclosures required under the federal Truth in Lending Act (TILA), 15 U.S.C. §§ 1601 et seq. Tucker v. Beneficial Mortgage Co., ___ F.Supp.2d ___, 2006 WL 1975769 (E.D. Va. 2006). Defense attorneys moved to dismiss the complaint on the grounds that plaintiffs were bound by a class action settlement negotiated by the Virginia Attorney General, and that the action was brought outside TILA’s one-year limitations period. The district court agreed with the defense, specifically holding that plaintiffs released their TILA claims as part of the class action settlement, and that “[p]laintiffs may waive their rights to bring TILA claims in a class action lawsuit.” Slip Opn., at 2.

Briefly, plaintiffs refinanced their home with Beneficial Mortgage in September 2002 – three months before the Virginia Attorney General negotiated a settlement of a consumer class action lawsuit against the lender. Plaintiffs affirmatively joined the settlement and in October 2003 signed a general release absolving Beneficial of liability for “all civil claims . . . whether known or unknown.” Slip Opn., at 3-4 (citation omitted). In September 2004, plaintiffs sought to rescind their Beneficial loan on the grounds that Beneficial “failed to make certain material TILA and Home Ownership and Equity Protection Act (‘HOEPA’) disclosures regarding the loan, including finance charges, the amount financed, and the annual percentage rate.” Id., at 4. Plaintiffs then filed suit in October 2005, alleging that these failures extended their right to rescind the transaction to three years. Id. The district court disagreed.

Class Action Court Decisions RESPA/TILA Class Actions Uncategorized

Levine v. World Financial-FCRA Class Action Defense Cases: Facially Valid Request for Consumer Credit Report Does Not Relieve Consumer Reporting Agency Of Duty To Evaluate Permissible Purpose Of Request Pursuant To Federal FCRA (Fair Credit Reporting Act

Federal District Court Order Granting Defense Motion to Dismiss FCRA Action Against Consumer Reporting Agency Reversed

A consumer (Stephen Levine) opened a store credit card account with a clothing retailer (Structure) through its financial affiliate (World Financial National Network Bank) that the consumer closed in 1998. Credit reports at a consumer reporting agency (Experian Information Solutions) showed that the account had been paid in full and closed. Nonetheless, in 2002 Structure requested credit reports on Levine from Experian, stating that it needed them for purposes of “account review.” Structure had not reported Experian with any new information on Levine’s account during the preceding four years, and Levine had not made any inquiries to Experian or Structure concerning his closed account. Experian provided copies of Levine’s credit report to Structure in May 2002 and in August 2002. Levine sued Experian and Structure for violating the federal Fair Credit Reporting Act (FCRA). 15 U.S.C. §§ 1681 et seq. Experian’s defense attorneys moved to dismiss the complaint. The district court granted the motion on two grounds: (1) “FCRA does not suggest that a credit report may only be permissibly obtained for account review during particular points in the parties’ relationship” and “Experian had not duty to investigate a facially valid request for a consumer report,” and (2) Levine failed to adequately allege damage. Levine v. World Financial Network Nat’l Bank, 437 F.3d 1118, 1119-20 (11th Cir. 2006). The Eleventh Circuit reversed.

Class Action Court Decisions FCRA Class Actions Uncategorized

FCRA Class Action Defense Issues-American Bankers v. Gould: Federal FCRA (Fair Credit Reporting Act) Preempts Portions of California’s Financial Information Privacy Act (SB1) Ninth Circuit Holds

Ninth Circuit Remands Case to Federal District Court to Determine Whether Any Portion of the Affiliate-Sharing Provisions of California’s Financial Privacy Act Survive Preemption Under FCRA Separate articles concerning class action defense cases and issues discuss the Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq., which establishes procedures for reporting and challenging information contained in consumer credit reports, Federal courts have described FCRA’s statutory scheme as “comprehensive” and “complex.

Class Action Court Decisions FCRA Class Actions Uncategorized

15 U.S.C. § 1681c-1 – Identity Theft Prevention; Fraud Alerts And Active Duty Alerts: Statutory Language of the FCRA (Fair Credit Reporting Act) for the Class Action Defense Lawyer

As a resource for defense lawyer defending against class actions under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide on this site the text of the FCRA. The next section we include discusses identity theft, fraud alerts and active duty alerts, which is governed by the following statute:

§ 1681c-1. Identity theft prevention; fraud alerts and active duty alerts

(a) One-call Fraud Alerts

(1) Initial alerts.

Upon the direct request of a consumer, or an individual acting on behalf of or as a personal representative of a consumer, who asserts in good faith a suspicion that the consumer has been or is about to become a victim of fraud or related crime, including identity theft, a consumer reporting agency described in section 1681a(p) of this title that maintains a file on the consumer and has received appropriate proof of the identity of the requester shall–

(A) include a fraud alert in the file of that consumer, and also provide that alert along with any credit score generated in using that file, for a period of not less than 90 days, beginning on the date of such request, unless the consumer or such representative requests that such fraud alert be removed before the end of such period, and the agency has received appropriate proof of the identity of the requester for such purpose; and

(B) refer the information regarding the fraud alert under this paragraph to each of the other consumer reporting agencies described in section 1681a(p) of this title, in accordance with procedures developed under section 1681s(f) of this title.

(2) Access to free reports.

In any case in which a consumer reporting agency includes a fraud alert in the file of a consumer pursuant to this subsection, the consumer reporting agency shall–

(A) disclose to the consumer that the consumer may request a free copy of the file of the consumer pursuant to section 1681j(d); and

(B) provide to the consumer all disclosures required to be made under section 1681g of this title, without charge to the consumer, not later than 3 business days after any request described in subparagraph (A).

FCRA Class Actions Statutes & Rules Uncategorized

15 U.S.C. § 1681c – Requirements Relating to Information Contained in Consumer Reports: Statutory Language for the Defense Lawyer of Class Action Lawsuits Under the FCRA (Fair Credit Reporting Act)

As a resource for defense lawyer defending against class actions under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., we provide on this site the text of the FCRA. Attorneys in FCRA class action cases often focus on the contents of consumer reports, which is governed by the following statute:

§ 1681c. Requirements relating to information contained in consumer reports

(a) Information excluded from consumer reports.

Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:

(1) Cases under Title 11 or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.

(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.

(3) Paid tax liens which, from date of payment, antedate the report by more than seven years.

(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.

(5) Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years.

(6) The name, address, and telephone number of any medical information furnisher that has notified the agency of its status, unless–

(A) such name, address, and telephone number are restricted or reported using codes that do not identify, or provide information sufficient to infer, the specific provider or the nature of such services, products, or devices to a person other than the consumer; or

(B) the report is being provided to an insurance company for a purpose relating to engaging in the business of insurance other than property and casualty insurance.

(b) Exempted cases.

The provisions of paragraphs (1) through (5) of subsection (a) of this section are not applicable in the case of any consumer credit report to be used in connection with

(1) a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more;

(2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or

(3) the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more.

FCRA Class Actions Statutes & Rules Uncategorized

Weekly Filings of Class Action Cases No Surprise – Defense Attorneys To Face More Employment Law Class Actions Than Any Other Category

As a service to California class action defense attorneys, we provide weekly, unofficial summaries of the legal categories for class actions filed in California state and federal courts in the Los Angeles, San Francisco, San Jose, Sacramento, San Diego, San Mateo, Oakland/Alameda and Orange County areas. Our hope is that the class action defense lawyer may better anticipate claims against which they must defend. This report covers the time period from July 21 – July 27, 2006.

Class Actions In The News Uncategorized

Court Approves Google $90 Million Class Action Settlement In Click-Fraud Case

The Los Angeles Times reports that yesterday an Arkansas judge approved the $90 million settlement of the click-fraud class action lawsuit against Google. While more than 70 objections to the proposed settlement had been filed, Google’s class action defense attorneys noted that all but one of Google’s 20 largest advertisers approved of the settlement. The court reportedly downplayed the concerns of small advertisers, and concluded that the terms of the settlement were “fair, reasonable and adequate.

Class Actions In The News Uncategorized

Putkowski v. Irwin Home Equity-FCRA Class Action Defense Cases: Mailer Offering Pre-Approved Equity Line From $15,000-$300,000 At Interest From 5.65%-16.9% Is “Firm Offer Of Credit” Under Federal FCRA (Fair Credit Reporting Act) California Court Holds

California Court Dismisses Class Action Agreeing With Defense Attorneys that Federal Fair Credit Report Act (FCRA) Does Not Require Terms of Equity Line Offer in Mailer to be a Specific Dollar Figure or Interest Rate, and that No Private Right of Action Exists for Alleged Violations of § 1681m’s Disclosure Requirements

A putative class action was filed against a lender for allegedly violating the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. §§ 1681 et seq., by sending out unsolicited mailers offering equity lines of credit in broad amounts (in plaintiff’s case, $15,000 – $300,000) at a range of interest rates (in plaintiff’s case, 5.65% – 16.9%), and by failing to include the disclosures required by § 1681m(d). Putkowski v. Irwin Home Equity Corp., 423 F.Supp.2d 1053, 1055-56 (N.D. Cal. 2006). Defense attorneys moved to dismiss the class action; plaintiff’s lawyer argued that the mailer was nothing more than a “sales pitch” and that it did not constitute a “firm offer” under the FCRA because it “failed to state the rate of interest to be charged or the amount of credit to be extended.” Id., at 1057. The class action defense team also argued that no private right of action exists for alleged violations of § 1681m. The district court agreed with the defense.

Defense attorneys argued that “firm offers of credit” under the FCRA may be “conditional” – that it need not specify the amount of the loan offered or the interest rate, and that “the offeror may later withdraw the offer if the consumer does not meet the creditworthiness criteria.” Putkowski, at 1058. The district court distinguished Cole v. U.S. Capital, Inc., 389 F.3d 719 (7th Cir. 2004) [holding mailer failed to comply with FCRA], and found that the terms of the “offer” set forth in the mailer sent to plaintiff were sufficient “firm” to satisfy FCRA. Id., at 1059-60.

Class Action Court Decisions FCRA Class Actions Uncategorized