A District Court judge in Indiana has partially dismissed a Fair Credit Reporting Act lawsuit over issues with an adverse action notice following a background check.
The background: The plaintiff filed suit alleging that the defendant violated the FCRA by issuing an inaccurate adverse action notice and by improperly relying on background and credit information during the application process.
- The plaintiff argued that the shifting explanations for the denial demonstrated improper handling of consumer report information and failures to comply with the FCRA’s notice requirements.
- The lawsuit also included additional claims related to discrimination and emotional distress, though the court noted that the FCRA claims were the primary focus of the motion to dismiss.
The ruling: Judge Philip P. Simon of the District Court for the Northern District of Indiana dismissed the plaintiff’s FCRA claims, finding that the allegations did not state a legally viable claim under the statute.
- Judge Simon explained that inaccuracies in the employer’s explanation for an adverse decision do not, by themselves, create a private right of action under certain provisions of the FCRA. In addressing the adverse action notice requirements, the judge pointed out that Congress has limited the ability of private plaintiffs to enforce some of these provisions.
- The court also emphasized that the FCRA draws a distinction between the responsibilities of consumer reporting agencies and the obligations of users of consumer reports, such as employers or companies evaluating applicants. While users must provide certain notices, disputes over the accuracy of report contents are typically directed back to the consumer reporting agencies themselves.
- The judge ultimately allowed other non-FCRA claims in the case to move forward, but the FCRA counts were dismissed without prejudice.
