In a recent decision, a district court denied a user’s motion to dismiss citing Spokeo under the Fair Credit Reporting Act (“FCRA”).
Facts: Walter Green, III, received a credit monitoring alert that RentGrow obtained a copy of his credit report from Trans Union on September 25, 2015. Mr. Green became concerned because he did not apply for an apartment rental and he believed he was a victim of identity theft. Mr. Green figured out that RentGrow pulled his credit report for an application for an apartment in Wisconsin. But, Mr. Green didn’t apply for an apartment and he didn’t live in Wisconsin. Accordingly, Mr. Green alleges RentGrow didn’t have a permissible purpose to obtain his credit report.
FCRA: The Fair Credit Reporting Act, 15 U.S.C. § 1681b(f), prohibits persons from using or obtaining a credit report unless the credit report is obtained for a purpose for which the consumer report is authorized to be furnished under this section. The FCRA also provides for the recovery of actual damages, statutory damages, attorney’s fees and costs for negligent and willful violations, pursuant to sections 1681n and o.
In his lawsuit, Mr. Green alleged RentGrow negligently or willfully violated the FCRA when it obtained his credit report without a permissible purpose. He also claimed that he is entitled to actual damages, including a lower credit score.
Procedural History: Citing Spokeo v. Robins, 136 S. Ct. 1540 (2016), RentGrow moved to dismiss Mr. Green’s claims under Federal Rule 12(b)((1), and argued Mr. green did not have standing to bring the claim against it in federal court because he did not sufficiently allege an injury sufficient to confer standing. RentGrow argued Mr. Green’s allegations fall short of the injury-in-fact standard articulated in Spokeo and were mere allegations of a “bare procedural violation” of the FCRA. Further, RentGrow argued Plaintiff’s allegation of a diminished credit score is insufficient to establish harm and satisfy the injury-in-fact requirement of Article III standing.
Standing Under the FCRA: Citing Burke v. Fed. Nat’l Mortgage Ass’n, No. 3:16-cv-153, 2016 WL 4249496 (E.D. Va. Aug. 9, 2016), the court noted the central issue is “whether a plaintiff who alleges a violation of section 1681b(f) of the FCRA has established a concrete harm sufficient to confer standing.” In Burke, the court denied the defendant’s motion to dismiss for lack of standing because the lack of an allegation of a tangible harm caused by an impermissible pull “does not necessarily mean that her alleged injury is only a bare, technical violation.” Id. at *3.
Applying Spokeo and Burke, the Green court held the plaintiff had standing because he alleged RentGrow obtained his credit report without a permissible purpose and “suffered an injury in fact – an invasion of the consumer’s right to privacy.”
Diminished Credit Score: “A decrease in credit score may still establish an injury in fact sufficient to confer standing.” Citing Santangelo v. Comcast Corp., 162 F.Supp. 3d 691, 698 (N.D. Ill. 2016) ( “[A] depleted credit score is sufficient to constitute an injury-in-fact for the purposes of establishing Article III standing”); See also Diedrich v. Ocwen Loan Servicing, LLC, No. 15-2573, 2016 WL 5852453, at *4 (7th Cir. Oct. 6, 2016) (finding that plaintiffs alleged an injury for purposes of standing where plaintiffs claimed to have “suffered damage to their credit” and were “forced to pay [the defendant] more money and higher interest rates”); Nicklaw v. Citimortgage, Inc., No, 15-14216, 2016 WL 5845682, at *4 (11th Cir. Oct. 6, 2016) (finding that plaintiff failed to allege a concrete injury, in part because complaint “does not allege that his credit suffered”).
Conclusion: The Magistrate’s report concluded Plaintiff alleged sufficient facts to confer Article III standing under Spokeo and recommended RentGrow’s Motion to Dismiss should be denied by the court. On November 30, 2016, the Article III judge adopted the Magistrate’s recommendation citing no objections to the report and denied RentGrow’s Motion to Dismiss. (See. Doc. 22).
Have you discovered an inquiry on your credit report, background report or landlord tenant history report that does not belong to you? Have you disputed the false information to the credit reporting agencies, background reporting agencies or landlord tenant reporting agencies?
The Fair Credit Reporting Act (FCRA) provides consumers with rights and remedies under federal law. The Adkins Firm represents identity theft victims and consumers who have credit report errors or background report errors. If you are a victim of identity theft or have a credit report error or background report, then you should contact us for a free case review at 1-800-263-9091 or contact us online for a free consultation.