A District Court judge in Pennsylvania has certified a nationwide class action accusing a credit reporting agency of violating the Fair Credit Reporting Act by improperly denying consumers’ requests to block allegedly fraudulent information resulting from identity theft.
The background: The plaintiff alleged the defendant failed to comply with Section 1681c-2 of the FCRA, which requires credit reporting agencies to block information resulting from alleged identity theft after receiving specified documentation from consumers.
- The plaintiff discovered allegedly fraudulent charges on a credit card account and submitted identity theft documentation to the defendant, including a police report, FTC identity theft report, identification documents, and proof of residence.
- The defendant responded with what the court described as a standardized “Letter 775,” stating it declined to block the information because the request was either made in error, involved a material misrepresentation, or because the consumer obtained goods, services, or money related to the transaction.
- The plaintiff sought certification of a nationwide class consisting of consumers who received similar “Letter 775” denials during the proposed class period.
The ruling: Judge Wendy Beetlestone of the District Court for the Eastern District of Pennsylvania granted class certification, finding the proposed class potentially included more than 280,000 consumers, easily satisfying Rule 23’s numerosity requirement.
- A major focus of the opinion involved the defendant’s alleged standardized process for handling identity theft block requests. According to the judge, internal workflow documents suggested the defendant evaluated requests using internal denial criteria before ever placing the initial block contemplated by the FCRA.
- The judge stated the central common question was whether the defendant’s “systemic practice of failing to block due to its internal ‘denial criteria’ violates the FCRA.”
- Judge Beetlestone rejected the defendant’s argument that individualized issues defeated certification, explaining the case focused primarily on whether the company’s standardized procedures complied with the statute, not whether each individual denial decision was ultimately correct.
- Another notable aspect of the ruling involved the judges discussion of remedies under the FCRA. The judge concluded private plaintiffs generally cannot pursue injunctive or declaratory relief under Sections 1681n and 1681o of the FCRA, finding Congress reserved those remedies primarily for government enforcement actions.
