On October 1, a district judge in the Eastern District of Pennsylvania issued a decision involving disclosure and adverse action claims under the Fair Credit Reporting Act. In its decision, the Court granted summary judgment for the defendants, recognizing a preliminary decision does not constitute adverse action under the FCRA.
In her complaint, the plaintiff alleged the defendants violated § 1681b(b)(3)(A) by failing to provide her with a copy of her consumer report and summary of rights prior to taking adverse action. The plaintiff claimed, based upon internal notes and emails from the defendants, that the defendants made the decision to deny her employment prior to sending her a pre-adverse action letter. The Court disagreed.
The Court found that the defendants provided a pre-adverse action letter stating it would “be completing [a] review of [Plaintiff’s] application … and may take adverse action based on the enclosed report.” The letter also included a notice of rights. Seven days later, after telephone conversations and emails about the plaintiff’s criminal history, the defendants sent the plaintiff an adverse action letter informing her of their decision not to hire her. The Court found that this process complied with the FCRA. In holding that the defendants acted in accordance with the FCRA, the Court emphasized that “a preliminary decision to take adverse action does not trigger the FCRA’s notice obligation.”
The plaintiff also alleged that one of the defendants, a subsidiary of the other defendant, violated § 1681b(b)(2) by procuring her credit report without authorization. The plaintiff argued that she only provided the parent company with authorization to procure her credit report—not the subsidiary. In disposing of this claim, the Court noted that the plaintiff acknowledged in her deposition testimony that the defendants were one and the same. The Court held it was immaterial if the parent procured the report or directed the subsidiary to procure the report because the report was procured for the benefit of both.