Tag: informational injuries

Third Circuit Ruling Provides Clarification Regarding Informational Injuries in the Wake of Recent Supreme Court Ruling October 26, 2022 In a recent case, the US Court of Appeals for the Third Circuit held that a subclass of consumers could proceed in a class action against a consumer reporting agency (CRA). This class action alleged that the CRA failed to provide the consumers with information concerning third-party sources of information. This decision is one of the first to clarify what amounts to an "informational injury" after a recent Supreme Court ruling raised the bar to what may establish a concrete injury. In this case, the plaintiffs claimed the inaccurate information found in their background checks provided by the defendant led to denied rental applications. For one of the plaintiffs, the report allegedly contained two convictions for driving under the influence and one for operating a vehicle with an outdated registration tag. The other plaintiff's report stated that he had been previously evicted from an apartment and in a civil suit for possession. According to the complaint, both plaintiffs contacted the CRA to have the reports corrected. However, the agency proved unwilling to do so without proof of the error from the sources of the information. Furthermore, the CRA did not disclose its sources in the files disclosed to the plaintiffs. As a result, the plaintiffs filed a complaint, alleging violations of the Fair Credit Reporting Act's requirement: A CRA must, upon request, disclose all information within a consumer's file (15 USC § 1681g(a)(1), (a)(2)). The plaintiffs sought certification to represent a class of consumers that received reports from the CRA between September 2017 and November 2019. In addition, they wish to represent a general putative class that received reports without a list of third-party vendors that supplied the information within the reports and a subclass that made a direct request for a rental report from the CRA. The district court agreed with the plaintiffs that they had the standing to sue the CRA. However, the district court denied class certification, finding that the plaintiffs did not meet Rule 23's ascertainability requirements. The court explained it would require a review of each consumer's file contained within two databases. Allegedly, such review would be administratively unfeasible. Upon appeal, the Third Circuit affirmed the lower court's conclusion that the plaintiffs had standing. It also rejected the CRA's argument that the classes had not suffered a concrete injury in light of the Supreme Court's ruling in Transunion LLC. V. Ramirez. Instead, the CRA argued that the plaintiffs' allegations would amount only to a bare procedural violation with no consequences. However, the Third Circuit disagreed, finding that the omission impaired the ability of the consumers to obtain and correct inaccurate information. Furthermore, the Third Circuit confirmed it violated the FCRA's requirement that CRAs provide their information sources. Regarding ascertainability, the Third Circuit agreed that the general putative class would not be ascertainable. However, the Third Circuit disagreed regarding the "direct requests" subclass. This subclass, the Third Circuit concluded, could be identified by a straightforward yes or no review of the files in the CRA's possession which would be administratively feasible. This ruling clarifies what may constitute an informational injury in the wake of the Supreme Court's recent ruling in Ramirez. Further, it shows the importance of compliance with the FCRA and working with a knowledgeable background check provider to avoid potential liability. Looking to easily verify your employment qualifications? Talk to a sales representative today about switching to pre-employment background checks. Source

Tag: informational injuries

Third Circuit Ruling Provides Clarification Regarding Informational Injuries in the Wake of Recent Supreme Court Ruling

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