Ninth Circuit draws line on FCRA required disclosures
Apr 26, 2022
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In Theresa Tailford, et al. v. Experian Information Solutions , the U.S. Court of Appeals for the Ninth Circuit recently affirmed a district court decision which held that Experian Information Solutions, Inc. did not violate the Fair Credit Reporting Act because none of the information the plaintiffs alleged Experian should have disclosed was subject to disclosure by a consumer reporting agency (CRA) under the FCRA. In their underlying putative class action, plaintiffs argued that under 15 U.S.C. § 1681g(a)(1), (3), and (5), Experian was required to disclose, in addition to its traditional credit information (credit accounts, creditors, debts, and credit inquiries), other types of information stored by Experian for various purposes, including (i) behavioral data from its “ConsumerView” marketing database; (ii) “soft” credit inquiries from third parties and affiliates; (iii) the identity of all parties who procured consumer reports from Experian; and (iv) the date on which employment data was reported to Experian. Section 1681g(1) provides that, upon a consumer’s request, a CRA must provide “[a]ll information in the consumer’s file at the time of the request [subject to exceptions not relevant to the appeal].” The plaintiffs argued that under § 1681g(1), “[a]ll information in the consumer’s file” should be interpreted to mean that CRAs must furnish even information for internal and marketing use. Experian filed a motion to dismiss for failure to state a claim, and the district court held that Experian had no obligation to include the information alleged to be missing by plaintiffs in its § 1681g disclosures. The district court dismissed the plaintiffs’ lawsuit with prejudice. On appeal, the Ninth Circuit agreed with Experian and the district court, holding that none of the information alleged to be missing from Experian’s disclosures was required to be disclosed under § 1681g. The panel, first looking to § 1681g(a)(1), focused on what constitutes “all information in the consumer’s file,” and determined that such information did not constitute all information that “might be furnished” as argued by the plaintiffs. While agreeing with the plaintiffs that a consumer’s “file” was not limited to information that was previously contained in a consumer report, the Ninth Circuit determined that it only included “information similar to that shown to have been included by the CRA in a consumer report in the past or planned to be included in the future.” The Ninth Circuit found that none of the information that the plaintiffs alleged Experian should have disclosed was of this type. Additionally, the Ninth Circuit rejected the plaintiffs’ argument that Experian should have disclosed certain of the “soft inquiries” under § 1681g(a)(3), which requires disclosure of each person who has procured a consumer report. The Ninth Circuit indicated that actual procurement of a consumer report by an identified party is necessary to trigger disclosure under § 1681g(a)(3) and the plaintiffs had failed to allege that the parties making “soft inquiries” were actually sent anything by Experian or that what was sent was a consumer report. The Ninth Circuit also rejected the plaintiffs’ argument that because two of the “soft inquiries” were promotional inquiries, they should have disclosed under § 1681g (a)(5). § 1681g(a)(5) requires the disclosure of inquiries received by a CRA during the 1-year period preceding the consumer’s request “that identified the consumer in connection with a credit or insurance transaction that was not initiated by the consumer. The Ninth Circuit indicated that the provision’s reference to a “transaction” meant that it only applies to inquiries leading to a firm offer of credit and the plaintiffs had failed to allege that the two inquiries led to an offer. Accordingly, the Ninth Circuit affirmed the district court’s dismissal of the plaintiffs’ claims with prejudice. While the Ninth Circuit was unwilling to accept the plaintiffs’ broad reading of what must be disclosed under § 1681g, the decision should serve as a reminder to CRAs to review their policies and procedures for responding to consumer requests under § 1681g to confirm they are disclosing all required information.