Consumer Financial Services Law Monitor

Consumer Financial Services Law Monitor

monitoring the financial services industry to help companies navigate through regulatory compliance, enforcement, and litigation issues

Credit Reporting & Data Brokers

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CFPB Solicits Comments on Access to Free Credit Scores

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
In recent years, many financial institutions and credit card companies have begun offering consumers free access to their credit score. On November 13, the Consumer Financial Protection Bureau published a request for information in the Federal Register regarding consumers’ experiences “with access to free credit scores and the experience of companies, and nonprofits, offering their… Continue Reading

CA Federal Court Denies TransUnion’s Post-Trial Motions in $60M Ramirez Case

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
On November 6, in Sergio L. Ramirez v. TransUnion LLC, Magistrate Judge Jacqueline Corley of the United States District Court for the Northern District of California denied TransUnion’s post-trial motion for judgment as a matter of law, for a new trial, and to reduce the $60 million verdict previously entered by the jury.  Ramirez remains… Continue Reading

Another Big-Dollar TCPA Settlement as Payment Processor Agrees to $9M Deal

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Debt Buyers & Collectors, Featured Posts, Mortgage Lenders & Servicers, Payment Processing & Cards
A Texas-based payment processor agreed on November 1 to pay $9 million to settle a putative class action brought under the Telephone Consumer Protection Act in the United States District Court for the Northern District of California.  According to the plaintiffs, Pivotal Payments, Inc. failed to ensure that a third party it hired to make… Continue Reading

Alabama AG Shuts Down Credit Repair Services Company

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
Alabama Attorney General Steve Marshall recently filed a complaint against Scott’s Credit Repair and its owners, John C. Scott and Krystal Scott, in Montgomery, Alabama Circuit Court.  The complaint alleged that “from beginning to end, the consumer experience with Scott’s Credit Repair is rooted in deception and illegality.”  More specifically, the complaint alleged that the… Continue Reading

District Court Skeptical of Consent to Obtain Consumer Report

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
The District Court for the District of Nevada recently addressed the reach of a consumer’s written authorization to obtain a consumer report under the Fair Credit Reporting Act.  In Rodriguez v. Your First Choice, LLC, it implicitly limited a business’s ability to obtain a report based on “written authorization” to situations when a permissible purpose… Continue Reading

Court Grants Summary Judgment to Thomson Reuters; Company Does Not Qualify as Consumer Reporting Agency

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
In Kidd v. Thomson Reuters, plaintiff Lindsay A. Kidd brought a Fair Credit Reporting Act putative class action claim against mass media and information firm Thomson Reuters after she was allegedly denied a job with the Georgia Department of Public Health based on criminal history information obtained by the Department from Thomson Reuters’ subscription-based online… Continue Reading

FCRA Suits Increase 60% from August to September

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
According to a litigation statistics report issued by WebRecon LLC, consumer lawsuits alleging violation of the Fair Credit Reporting Act increased by nearly 60% in September from the prior month.  That increase “keeps it in line with the aggressive growth in recent years.” FCRA filings increased 58.4% from 351 in August to 556 in September… Continue Reading

CFPB Issues Guidance to Small Businesses on Complying With Rule Banning Class Action Waivers

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
On July 10, the Consumer Financial Protection Bureau issued its long-awaited final Rule banning class action waivers in arbitration provisions for covered entities, as well as requiring the covered entities to provide information to the CFPB regarding any efforts to compel arbitration.  This Rule is of significance to any financial services company that utilizes consumer… Continue Reading

No Vacancy – Court Denies Class Certification in FCRA Case Against Hyatt

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
On March 13, 2017, Carlos Guarisma filed a class action complaint against Hyatt Equities, alleging violation of the Fair Credit Reporting Act.  The complaint alleges that Hyatt printed more than the last five digits of customers’ credit card numbers on hotel receipts.  Guarisma sought to represent a class of Hyatt hotel guests.  This past week,… Continue Reading

U.S. Chamber of Commerce and Other Business Associations Sue to Overturn Ban on Class Action Waivers

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
The U.S. Chamber of Commerce and other business groups have filed a federal lawsuit seeking to invalidate the Consumer Financial Protection Bureau’s Rule banning class action waivers in arbitration provisions contained in financial institutions’ contracts with consumers.  Compliance with the Rule would be required beginning March 19, 2018.  The lawsuit was filed in the United… Continue Reading

Cursory Investigations and Misleading Reporting Leads to Partial Summary Judgment Win for Consumer

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Featured Posts
A recent federal court decision granting summary judgment to a plaintiff on a claim that a lender violated the Fair Credit Reporting Act (the “FCRA”), 15 U.S.C. § 1681 et seq., by failing to conduct a “reasonable” investigation of a credit reporting dispute – an issue normally reserved for a jury – illustrates the difficulty… Continue Reading

NYDFS Directed to Regulate Consumer Reporting Agencies

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
On September 18, New York Governor Andrew Cuomo issued a press release directing the New York Department of Financial Services to impose new rules on consumer reporting agencies (“CRAs”).  The new regulation would require CRAs to register with New York for the first time and comply with the state’s cybersecurity standard.  The standard – which… Continue Reading

FTC Says Its Focus Must Be on Instances of Real Harm to Consumers

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Cyber Security, Information Governance & Privacy, Mortgage Lenders & Servicers, State Attorneys General, CFPB, & FTC
In a September 19 speech at the Federal Communications Bar Association in Washington, FTC Acting Chairman Maureen K. Ohlhausen stated that the Commission should focus on addressing instances of “substantial consumer injury” in deciding which cases to pursue.  Echoing (intentionally or not) the language of the Supreme Court’s foundational decision in Spokeo, Inc. v. Robins,… Continue Reading

Bill to Cap FCRA Liability Gets Hearing Before Congressional Subcommittee

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
This past May, Rep. Barry Loudermilk (R-Ga.) introduced H.R. 2359, the FCRA Liability Harmonization Act, which would cap class action damages in Fair Credit Reporting Act claims at $500,000 or one percent of the defendant’s net worth, whichever is less, and eliminate punitive damages.  Such changes would align the Fair Credit Reporting Act with numerous… Continue Reading

Second Circuit Affirms Dismissal of FACTA Class Action Against Donna Karan for Lack of Standing

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Cyber Security, Information Governance & Privacy
On September 20, the Second Circuit Court of Appeals in Katz v. The Donna Karan Company, LLC, affirmed the lower court’s dismissal of a Fair and Accurate Credit Transactions Act putative class action for failure to establish a concrete injury sufficient to maintain Article III standing to bring suit. As we previously reported, plaintiff Yehuda… Continue Reading

NY and NJ Render Conflicting FDCPA Decisions Involving Credit Repair Companies

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Debt Buyers & Collectors
Two recent decisions from the Southern District of New York and the District of New Jersey have expressly disagreed about a credit repair company’s dispute of a debt on behalf of a consumer in two Fair Debt Collection Practices Act cases.  In Taylor-Burns v. AR Resources, Inc., plaintiff Tonya Taylor-Burns alleged that the debt collector… Continue Reading

Central District of California Limits Fees in FCRA Class Action, Creates Bigger Award Pool for Class Members

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
On July 18, the District Court for the Central District of California granted in part and denied in part a motion for attorneys’ fees, costs, and other payments in a Fair Credit Reporting Act class action suit.  The motion accompanied a proposed $400,000 settlement, with a third of the funds allocated to class counsel for… Continue Reading

CFPB Shuts Down Credit Repair Company for Charging Illegal Fees

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
A California district court approved a settlement between Prime Marketing Holdings LLC and the Consumer Financial Protection Bureau, whereby Prime Marketing agreed to pay $150,000 and be banned from offering credit repair services.  The settlement was a result of the CFPB’s September 2016 suit against Prime Marketing for allegedly misleading consumers and charging illegal fees. … Continue Reading

Join Us for a NAPBS Webinar on September 27: Compliance Management Systems – The Next Generation

Posted in ALL CFS Blog Entries, Background Screening, CFS Events, Credit Reporting & Data Brokers, Cyber Security, Information Governance & Privacy
We are pleased to announce that Troutman Sanders attorneys Ron Raether and Megan Nicholls will be featured speakers for a webinar hosted by the National Association of Professional Background Screeners on September 27, 2017 from 3:00 – 4:00 p.m. ET. In this session, they will discuss the basic elements of a compliance management system, how to maintain… Continue Reading

Federal Appellate Court Affirms Dismissal of Putative FCRA Class Action

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers
On August 24, the United States Court of Appeals for the Eleventh Circuit affirmed the dismissal of a putative class action against TransUnion on the basis that it failed to allege a plausible claim for relief, holding that TransUnion was not objectively unreasonable in its reading of the Fair Credit Reporting Act. The plaintiff, Kathleen… Continue Reading

Court Finds Congress Has Waived Governmental Sovereign Immunity for FCRA Violations

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
In Kent v. TransUnion, plaintiff Rowdy Kent sued multiple consumer reporting agencies and the United States Defense Finance and Accounting Services for alleged violations of the Fair Credit Reporting Act.  DFAS moved to dismiss Kent’s claims, arguing that it possesses sovereign immunity from claims under the FCRA.  On August 25, the District Court for the… Continue Reading

Courier Service Settles Lawsuit Challenging Background Check Disclosure Form and Notices

Posted in ALL CFS Blog Entries, Background Screening, Credit Reporting & Data Brokers, Featured Posts
The recent matter of Nesbitt, et al. v. Postmates Inc., Case No. CGC15547146 in the Superior Court of the State of California, County of San Francisco, demonstrates the continuing trend of litigation regarding the content of background disclosure forms, as well as ongoing issues regarding the failure of employers to provide notice of adverse action… Continue Reading

Spokeo Update: Ninth Circuit Holds that Plaintiff Adequately Alleged Article III Standing

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers, Featured Posts
On August 15, 2017, the Ninth Circuit issued its decision on remand in Spokeo, reversing and remanding the case to the District Court after finding that the named Plaintiff, Thomas Robins, has standing to pursue his claims. Background In Spokeo, Inc. v. Robins, Plaintiff Robins sued the “people search engine” for alleged violations of the… Continue Reading

Ninth Circuit Upholds $430,000 Jury Verdict in FCRA Case Against Auto Finance Company

Posted in ALL CFS Blog Entries, Credit Reporting & Data Brokers
The Ninth Circuit upheld a $430,000 jury verdict on a Fair Credit Reporting Act claim related to an auto finance company’s alleged failure to investigate an identity theft claim.  The plaintiff, Seungtae Kim, alleged that he suffered damage to his credit and emotional distress as a result of the company’s failure to adequately investigate his… Continue Reading