On June 25, the U.S. Court of Appeals for the Eighth Circuit issued a decision affirming summary judgment in favor of a consumer reporting agency (CRA) that allegedly issued an inaccurate consumer report by inadvertently including the subject’s twin brother’s speeding ticket in the background check report. The decision provides useful guidance on the standard for “reasonable procedures to assure maximum possible accuracy” under the Fair Credit Reporting Act (FCRA) and the circumstances under which a CRA may rely on official court records without further investigation.

Background

The plaintiff, Austin Fraase, applied for a full-time position with the Fargo Parks District, which ordered a background check from Advantage Credit Bureau. Advantage searched the North Dakota courts’ public website using the plaintiff’s name and date of birth and returned a result showing a speeding ticket conviction, which allegedly actually belonged to the plaintiff’s twin brother, Aaron Fraase. The court’s website had grouped the brothers together under a single “case jacket,” however, and listed Austin as an alias for Aaron. Advantage reported the ticket in both an initial background check and a second one subsequently ordered by Fargo Parks. Despite the erroneous report, Fargo Parks offered the plaintiff the full-time position after he explained the error during his interview, and the plaintiff started the job on schedule.

The plaintiff sued Advantage under § 1681e(b) of the FCRA, which requires CRAs to “follow reasonable procedures to assure maximum possible accuracy” of the information included in consumer reports. The district court granted summary judgment in Advantage’s favor, finding both that Advantage had followed reasonable procedures and that the plaintiff had suffered no actual damages. The plaintiff appealed.

The Eighth Circuit’s Ruling

The Eighth Circuit affirmed on the reasonable procedures ground, without reaching the damages question. The court’s analysis addressed three arguments the plaintiff raised on appeal.

First, the court rejected the plaintiff’s argument that it was unreasonable for Advantage to rely on the North Dakota courts’ public website. The court reaffirmed that the FCRA is not a strict liability statute and that a CRA is not liable for inaccurate information obtained from a source it reasonably believed to be reputable, absent notice of systemic problems with that source. Because the court website served as a public-facing repository of North Dakota court records, Advantage’s reliance on it was reasonable as a matter of law. The court noted that holding otherwise would require CRAs to go beyond the face of court records to verify their accuracy, a burden inconsistent with the FCRA’s framework. The court also declined to treat a boilerplate disclaimer on the website, or the alleged inconsistency between the speeding ticket and a clean driving record in the motor vehicle section of the report, as evidence of systemic problems sufficient to put Advantage on notice of reliability concerns requiring it to go beyond the face of the official court record.

Second, the court rejected the plaintiff’s argument that Advantage should have maintained written procedures specifically addressing twins or similarly named individuals. Because the plaintiff did not claim Advantage knew he was a twin, and because the court’s own case jacket identified the brothers’ names as aliases, the court found that a specific twin policy would not have changed the outcome. The court also rejected the plaintiff’s argument that Advantage failed to follow its own policy of matching full names and dates of birth, finding that argument contradicted by testimony from both Advantage employees who confirmed they reported the ticket precisely because it was a full name and date of birth match.

Third, the court rejected the plaintiff’s argument that the presence of two different driver’s license numbers in the underlying Odyssey docketing system should have prompted Advantage to investigate further. There was no evidence that the Advantage employees saw the Odyssey report or that the driver’s license numbers were visible on the public-facing version of the court website. More fundamentally, the court distinguished between minor discrepancies, which do not require a CRA to dig deeper beyond the official court record, and the type of large, facial inaccuracies that courts have found sufficient to trigger a duty of further inquiry, such as significant discrepancies in last name, middle name, date of birth, and citizenship.

Takeaways

  • The FCRA is not a strict liability statute. The Eighth Circuit reaffirmed the well-established principle: A CRA is not liable simply because a report contains inaccurate information, so long as its procedures for obtaining and reporting that information were reasonable.
  • Reliance on official court records is reasonable. A CRA that accurately enters identifying information into an official or public-facing court records system and reports what that system returns has satisfied its reasonable procedures obligation, even if the underlying court record turns out to be inaccurate, so long as the CRA had no notice of systemic reliability problems with that source.
  • Minor inconsistencies do not trigger a duty of further investigation. Inconsistencies between different sections of a background report, or the presence of different identifying numbers in underlying records, do not automatically require a CRA to look beyond what the court records show, particularly where the court system itself grouped the information together.