A federal district court in Pennsylvania has ruled that a company that provides reports based on a search of public records meets the definition of a consumer intelligence agency (ARC) as provided by the Fair Credit Reporting Act (FCR).
In this case, the plaintiffs had applied for a loan from a bank to refinance their mortgage. The bank, in turn, requested a report from a third-party service based on a search of public records relating to the complainants. In order to provide the report, this service paid contractors to perform a physical search for documents in various public document repositories and then compiled the information to create a report which was sent to the bank.
The final product the bank received contained inaccurate information indicating that the plaintiffs had pending civil judgments against them. The complainants say they contacted the provider of the report about the error and were told that the provider would not be investigating the matter. The plaintiffs then filed a lawsuit against the provider of the report alleging FCRA violationsthe obligation to follow reasonable procedures to ensure that the information provided is accurate, as well as the obligation to carry out a new investigation in the event of disputed accuracy.
The defendant sought summary judgment claiming that he was not a CRA under the FCRA’s definition and that he did not provide consumer reports under its definition. Furthermore, the defendant asserted that even if he were to be considered subject to the requirements of the FCRA, a reasonable juror would not be able to conclude that he had violated the requirements of the law.
In response, the court analyzed the definitions of a consumer report and an ARC provided by the FCRA and concluded that whether or not the agency provided a consumer report, it would meet the definition of an ARC. because it collected monetary fees, used interstate commerce, and regularly engaged in gathering or evaluating information for the purpose of building a consumer credit file. Moreover, contrary to the defendant’s argument that he only accessed the public judgments rather than the assembly of information, the court concluded that the collection and aggregation of information is assembled for the purposes of the CARF.
The court also declined to grant summary judgment to the defendant on allegations that he failed to maintain reasonable procedures to ensure maximum accuracy. However, the court granted the defendant summary judgment on the allegation that he failed to reinvestigate because there was no evidence on the docket to show that the plaintiff had in fact inquired or wondered. been denied such a request.
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