Duane Morris Class Action Review - 2023 - Report - Page 213
review of each file would be amenable to simple “yes-or-no” review regarding whether
the consumer should be allowed to join the class. Id. at 224.
Kelly shows the importance of implementing policies and procedures that allow
consumers to adequately challenge errors in consumer reports. In addition to the
immediate correction actual errors, consumer reporting agencies must be prepared to
generate the full range of data, including from third-party vendors, when consumers
challenge their generated reports.
While consumer reporting agencies must take care when handling third-party vendor
data, courts may limit recovery for mistakes contained in such third-party data if the
agency can show that it took proper steps to adequately vet the third-party data. For
example, in McIntyre, et al. v. RentGrow, Inc., 34 F.4th 87 (1st Cir. 2022), the First
Circuit upheld a district court’s grant of summary judgment to the defendant consumer
reporting agency RentGrow, because the plaintiff, a prospective housing tenant, could
not show that the defendant’s use of inaccurate third-party data was reckless. Id. The
plaintiff alleged that RentGrow had willfully placed court information in her tenant
screening report, obtained from third-party vendor Transunion, incorrectly showing that
there had been a judgment against her in a previous landlord-tenant dispute. Id. at 9193. The plaintiff argued that RentGrow’s conduct constituted a willful violation of the
FCRA because it was reckless in obtaining court information from Transunion. Id. at 95.
Specifically, the plaintiff pointed to a 2012 paper published by the U.S. Consumer
Financial Protection Bureau entitled “Supervisory Highlights,” which suggested that
consumer reporting agencies institute compliance procedures that “include processes to
audit and verify public-records information and to supervise third-party public-records
vendors.” Id. at 100. According to the plaintiff, “these comments should have put
RentGrow on clear notice that its procedures were unreasonable and, thus, that in
maintaining them, it was undershooting its compliance obligations under [the FCRA].”
Id. The First Circuit disagreed. It concluded that “no reasonable jury could find that the
publication relied on by [the plaintiff] was sufficient to put RentGrow on clear notice that
its battery of procedures to assure accuracy - selecting the best-available records
provider, reassessing that choice in comparisons with competitors, filtering out roughly a
quarter of returned results to remove mismatches and unreportable information, and
responding promptly to disputes - was inadequate under the circumstances to satisfy its
compliance obligations.” Id. at 101. Thus, the First Circuit upheld summary judgment in
favor of RentGrow. Id. However, it is clear that the plaintiff might have otherwise
survived summary judgment had she been able to allege that RentGrow was simply
negligent, and not willful, in its violations of the FCRA. Indeed, the First Circuit
specifically noted that the Plaintiff could show that RentGrow had provided an
inaccurate report and failed to comply with reasonable procedures, as the plaintiff is
required to show in a negligent compliance claims. Id. at 96-98. Nonetheless, the
plaintiff could not bring a negligent non-compliance claim because the district court had
held, and plaintiff did not challenge on appeal, that the plaintiff could not prove actual
damages, which is required in a negligent non-compliance claim. Id. at 94. Therefore,
she could only bring a willful non-compliance claim, which does not require proof of
actual damages.
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Duane Morris Class Action Review – 2023
