The Fair Credit Reporting Act and Full File Disclosures

Posted By: John Albanese October 28, 2016

When a potential client contacts me because of an issue with a background check, the first thing that we have the client do is make a request for the consumer’s “full file” from the background check company. Under the Fair Credit Reporting Act, 15 U.S.C. § 1681g(a) consumer reporting agencies are required to “clearly and accurately” disclose to the consumer: (1) “all information in the consumer’s file at the time of the request;” (2) “the sources of information;” (3) the identities of people who have procured a report for the past two years, if the report was for employment purposes. With this information in hand, it is far easier to figure out if there is an actionable issue with a background check.

Importantly, the statute requires that the disclosure be both “clear” and “accurate.” According to the Seventh Circuit, it is not enough simply for the disclosure to be accurate:

“[T]he consumer reporting agency must do more than simply make an accurate disclosure of the information in the consumer’s credit file. The disclosure must be made in a manner sufficient to allow the consumer to compare the disclosed information from the credit file against the consumer’s personal information in order to allow the consumer to determine the accuracy of the information set forth in her credit file. In writing § 1681g(a)(1), Congress requires disclosure that is both “clearly and accurately” made. An accurate disclosure of unclear information defeats the consumer’s ability to review the credit file, eliminating a consumer protection procedure established by Congress under the FCRA.

Gillespie v. Equifax Info. Servs., L.L.C., 484 F.3d 938, 941 (7th Cir. 2007)

Full File Disclosure Disputes

There have been some disputes about what a consumer reporting agency is required to disclose. In another case involving plaintiff Gillespie, Gillespie v. Trans Union, 482 F.3d 907 (7th Cir. 2007), the plaintiffs alleged Trans Union violated the FCRA by keeping a “purge date” in Trans Union’s internal systems to determine when accounts will be removed, but not disclosing that date to consumers upon receiving a file request. Importantly, the purge dates were also not disclosed to creditors when procuring credit reports. The Court framed the issue as “whether the term “file” in § 1681g(a)(1) encompasses everything in Trans Union’s consumer file, or just material included in a consumer report issued to third parties.” Id. at 908. After reviewing the language of the statute and the legislative history, the court concluded that “‘file’ means information included in a consumer report.” Id. at 910.

In Cortez v. Trans Union, 618 F.3d 688 (3d Cir. 2010), the plaintiff alleged that Trans Union had placed OFAC alerts on her credit reports indicating that she was a potential terrorist but had not disclosed those alerts to her when she requested her credit reports. (For more on what an OFAC alert, see my previous post, Class Action Certification and § 1681e(b).) The Court held that Trans Union was required to disclose the OFAC alert because it had transmitted those alerts to third parties and “OFAC alerts were far more than a mere internal record-keeping mechanism.” Id. at 712.

Putting together Gillespie and Cortez, if there is information that the consumer reporting agency is reporting to third party, then that information is required to include in the full file disclosure.