FCRA Class Action Review – 2025

DISCLAIMER The material in this Review is of the nature of general commentary only. It is not meant as or offered as legal advice on any particular issue and should not be considered as such. The views expressed are solely those of the authors. In addition, the authors disclaim any and all liability to any person in respect of anything and of the consequences of anything done wholly or partly in reliance on the contents of this Review. This disclaimer is from the Declaration of Principles jointly adopted by the Committee of the American Bar Association and a Committee of Publishers and Associations.

CITATION FORMATS All citations in the FCRA Class Action Review are designed to facilitate research. If available, the preferred citation of the opinion included in the West bound volumes is used, such as Barclift, et al. v. Keystone Credit Services, LLC, 93 F.4th 136 (3d Cir. 2024). If the decision is not available in the preferred format, a Lexis or Westlaw cite from the electronic database is provided, such as Brooks, et al. v. Trans Union LLC , 2024 U.S. Dist. LEXIS 136116 (E.D. Penn. Aug. 1, 2024). If a ruling is not available in one of these sources, the full case name and docket information is included, such as Steinberg, et al. v. Corelogic, Case No. 22-CV-498 (S.D. Cal. Apr. 9, 2024). E-BOOK HIGHLIGHTS The FCRA Class Action Review is available for use on a smartphone, laptop, tablet, or any personal electronic reader by using any e-book reader application. E-book reading allows users to quickly scroll, highlight important information, link directly to different sections of the Review, and bookmark pages for quick access at a later time. The e-book is designed for easy navigation and quick access to informative data. The e-book is available by scanning the below QR code:

FCRA Class Action Review – 2025

NOTE FROM THE EDITOR Class action litigation generally involves high stakes that can keep corporate counsel and senior management awake at night. These cases can impact a company’s market share and reputation in a significant manner, creating substantial pressure on decision-makers who must navigate the associated risks and exposures. The FCRA Class Action Review serves multiple purposes. It aims to clarify the complexities of class action litigation and provide corporate counsel with up-to-date insights into the evolving nuances of Rule 23 and other types of representative proceedings. Through this publication, we seek to offer an analysis of emerging trends and key rulings, empowering our clients to make informed decisions when managing complex litigation risks. Defending class actions is a cornerstone of Duane Morris’ litigation practice. We hope this book will help our clients identify key trends in the case law and offer practical strategies for handling these types of class action litigation. Sincerely,

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CONTRIBUTORS

FCRA Class Action Review – 2025

GLOSSARY AND KEY U.S. SUPREME COURT DECISIONS Adequacy Of Representation – Plaintiffs must show adequacy of representation per Rule 23(a)(4) to secure class certification. It requires representative plaintiffs and their counsel to be capable of fairly and adequately protecting the interests of the class. Amchem Products, Inc. v. Windsor, et al. , 521 U.S. 591 (1997) – Windsor is the U.S. Supreme Court decision that elucidated the requirements in Rule 23(b), insofar as common questions must predominate over any questions affecting only individual class members and class resolution must be superior to other methods for the adjudication of the claims. Ascertainability – Although not an explicit requirement of Rule 23, some courts hold that the members of a proposed class must be ascertainable by objective criteria. Comcast Corp. v. Behrend, et al. , 569 U.S. 27 (2013) – Comcast is the U.S. Supreme Court decision that interpreted Rule 23(b)(3) to require that, for questions of law or fact common to the class, the plaintiffs’ damages model must show damages are capable of resolution on a class-wide basis. Commonality – Plaintiffs must show commonality per Rule 23(a)(2) to secure class certification. This requires that common questions of law and fact exist as to the proposed class members. Class – A group of individuals that has suffered a similar loss or alleged illegal experience on whose behalf one or more representatives seek to bring suit. Class Action – The civil action brought by one or more plaintiffs in which they seek to sue on behalf of themselves and others not named in the suit but alleged to have suffered the same or similar harm. Class Certification – The judicial process in which a court reviews the submissions of the parties to determine whether the plaintiffs have met their burden of showing that class treatment is the most appropriate form of adjudication. Collective Action – A type of representative proceeding governed by 29 U.S.C. § 216(b) where one or more plaintiffs seeks to bring suit on behalf of others who must affirmatively opt-in to join the litigation. It is applicable to claims under the Fair Labor Standards Act, the Age Discrimination in Employment Act, or the Equal Pay Act. Cy Pres Fund – In class action settlement agreements, this is the money set aside for distribution to a § 501(c) organization when class members do not return a settlement claim form and money is left over after distribution to the class. Decertification – Following an order granting conditional certification of a collective action or certification of a class action, a defendant can move for decertification based on the grounds that the members of the collective action are not actually similarly-situated or that the requirements of Rule 23 are no longer satisfied for the class action. Epic Systems Inc. v. Lewis, et al. , 138 S. Ct. 1612 (2018) – Epic Systems is the U.S. Supreme Court decision holding that arbitration agreements requiring individual arbitration and waiving a litigant ’ s right to bring or participate in class actions are enforceable under the Federal Arbitration Act. Opt-In Procedures – Under 29 U.S.C. § 216(b), a collective action member must opt-in to join the lawsuit before he or she may assert claims in the lawsuit or be bound by a judgment or settlement. Opt-Out Procedures – If a court certifies a class under Rule 23(b)(3), class members are bound by the court ’ s judgment unless they opt-out after receiving notice of the lawsuit. Numerosity – Plaintiffs must show that their proposed class is sufficiently numerous that adding each class

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member to the complaint would be impractical. This is a requirement for class certification imposed by Rule 23(a)(1). Ortiz, et al. v. Fibreboard Corp., 527 U.S. 815 (1999) – Ortiz is the U.S. Supreme Court ruling that interpreted Rule 23(b)(3) to require personal notice and an opportunity to opt-out of a class action where money damages are sought in a class action. Predominance – The Rule 23(b)(3) requirement that, to obtain class certification, the plaintiffs must show that common questions predominate over any questions affecting individual members. Rule 23 – This rule from the Federal Rules of Civil Procedure governs class actions in federal courts and requires that a party seeking class certification meet four requirements of section (a) and one of three requirements under section (b) of the rule. Rule 23(a) – It prescribes that a class meet four requirements for purposes of class certification, including numerosity, commonality, typicality, and adequacy of representation. Rule 23(b) – To secure class certification, a class must meet one of three requirements of Rule 23(b)(1), Rule 23(b)(2), or Rule 23(b)(3). Rule 23(b)(1) – A class action may be maintained if Rule 23(a) is satisfied and if prosecuting separate actions would create a risk of inconsistent or varying adjudications with respect to individual class members or adjudications with respect to individual class members that, as a practical matter, would be dispositive of the interests of the other members not parties to the individual adjudications or would substantially impair or impede their ability to protect their interests. Rule 23(b)(2) – A class action may be maintained if Rule 23(a) is satisfied and the party opposing the class has acted or refused to act on grounds that apply generally to the class, so that final injunctive relief or corresponding declaratory relief is appropriate respecting the class as a whole. Rule 23(b)(3) – A class action may be maintained if Rule 23(a) is satisfied and questions of law or fact common to class members predominate over any questions affecting only individual members and a class action is superior to other available methods for fairly and efficiently adjudicating the controversy. Similarly-Situated – Under 29 U.S.C. § 216, employees may bring suit on behalf of themselves and others who are similarly-situated. The standard is not clearly defined in the statute and many courts have found that, if plaintiffs make a preliminary showing that they are similarly-situated to those they seek to represent, conditional certification is appropriate. A finding in this regard is usually not based on the merits of the claims. Superiority – The Rule 23(b)(3) requirement that a class action can be permitted only if class resolution is the superior method of adjudicating the claims. Typicality – The plaintiffs’ claims and defenses must be typical to those of proposed class members’ claims. This is required by Rule 23(a)(3). Wal-Mart Stores, Inc. v. Dukes, et al., 564 U.S. 338 (2011) – Wal-Mart is the U.S. Supreme Court ruling that tightened the commonality requirement of Rule 23(a)(2) and held that judges must conduct a “rigorous analysis” to determine whether there is a “common” contention central to the validity of the claims that is “capable of class-wide resolution.”

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TABLE OF CONTENTS

Page

I. Executive Summary ............................................... Error! Bookmark not defined. II. Key FCRA Rulings Over Provision Of Allegedly Inaccurate Reports ............ 4 III. Key FCRA Class Certification Rulings ............................................................. 5 IV. Key FCRA Rulings Granting Class Certification.............................................. 5 V. Key FCRA Rulings Denying Class Certification .............................................. 7 VI. Key FCRA Circuit Court Rulings ....................................................................... 8 VII. Key FACTA Rulings............................................................................................ 9 VIII. Key FDCPA Rulings On Dispositive Motions................................................. 10 IX. Key Class Certification Rulings Under The FDCPA and FACTA .................. 11 X. Top FCRA, FACTA, and FDCPA Class Action Settlements In 2024 ............. 14 Index Of 2024 FCRA Class Action Rulings ............................................................... 16

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FCRA, FDCPA, And FACTA Class Actions I. Executive Summary

The Congressional purpose in enacting the Fair Credit Reporting Act (FCRA) is “to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer ’ s right to privacy.” See 15 U.S.C. § 1681. The Act purports to accomplish this purpose by requiring consumer reporting agencies and entities obtaining consumer reports to “follow reasonable procedures to assure maximum possible accuracy of consumer reports; to notify providers and users of consumer information of their responsibilities under the Act; to limit the circumstances in which such agencies provide consumer reports for employment purposes; and to post toll-free numbers for consumers to request reports.” Spokeo, Inc. v. Robins, et al. , 578 U.S. 330, 335 (2016). The limitations periods for bringing an action under the FCRA is the earlier of “2 years after the date of discovery by the plaintiff of the violation that is the basis for such liability; or 5 years after the date on which the violation that is the basis for such liability occurs.” 15 U.S.C. § 1681(p). Damages for individual FCRA violations range from $100 to $1,000. Additionally, a court may decide to award punitive damages of up to $2,500 per violation depending on the severity of the “willful” violation. In determining the amount, courts consider the degree of culpability, any history of prior such conduct, ability to pay, effect on ability to continue to do business, and such other matters as justice may require. 15 U.S.C. § 1681(s)(a)(2)(B). Courts have often noted that FCRA violations lend themselves to resolution through class action litigation, and FCRA class actions have increased partially because of the Fair and Accurate Credit Transactions Act (FACTA) amendments, passed in 2003. The FACTA requires that credit reporting agencies improve the clarity of consumer credit reports. Specifically, it mandates that consumers have a clearer understanding of the credit reporting process and any negative information reported, so they can dispute any inaccuracies. The information also must be presented in a way that’s understandable to consumers, with a notice of rights included to explain how to dispute errors and seek remedies. The FACTA amendments were meant to improve the accuracy and security of consumer credit information and to help protect consumers from identity theft. The FACTA amendments require that a consumer who is accorded less favorable treatment in reliance on their credit report be provided an adverse action notice (similar to the FCRA’s requirements). This notice must be provided to the consumer if they are treated less favorably based on information in their consumer report. For example, if a credit report is used to deny someone a loan or to offer them higher rates, the consumer must be informed of this decision. The civil penalties for willfully failing to comply with the FACTA’s provisions align with those of the FCRA, with fines for violations of up to $2,500 per willful violation, while negligent violations can result in fines of up to $1,000 per violation. Within the employment context, the plaintiff ’ s bar often targets employers for improper disclosures and authorizations on employee applicant background check forms. The FCRA ’ s authorization and disclosure requirements apply whenever a potential employer obtains a “consumer report” or “investigatory consumer report” on an employee applicant. A “consumer report” is any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for – (a) credit or insurance to be used primarily for personal, family, or household purposes; (b) employment purposes; or (c) any other purpose authorized under § 1681b. See 15 USC § 1681a(d)(1). An “investigatory consumer report” is a background check into an individual ’ s character, general reputation, personal characteristics, or mode of living based on interviews with the person ’ s neighbors, friends, associates, acquaintances, or others who may know about such information. See 15 U.S.C. § 1681(d)(a)(1). Whenever an employer wishes to obtain a consumer report on an applicant for a job, the employer must first obtain the applicant ’ s written authorization to obtain such a report. See 15 U.S.C. § 1681(b)(2)(A). This authorization form must inform the applicant that the employer will obtain a consumer report, identify the third-

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party entity issuing the report, and state that the consumer report obtained may be used in employment decisions. See 15 U.S.C. § 1681(b). The authorization form must also inform the applicant of their rights, should the employer choose to take an adverse action against the applicant, i.e. , not hire them, due to the results of the consumer report. See 15 U.S.C. § 1681(b)(1)(B). These “adverse action” rights include: (i) the right to be informed if the employer is contemplating an adverse action; (ii) to view a copy of the consumer report; and (iii) to correct any errors in the consumer report before the adverse action is taken. See 15 U.S.C. § 1681(g)(c)(1)(B). Finally, when an employer obtains a consumer report from a third-party entity, the third party must obtain a certification from the employer that it has complied with all of the above authorization and notification requirements. See 15 U.S.C. § 1681(b)(b)(1). In 2024, in FCRA cases, the class action plaintiff ’ s bar continued to look for any technical failure of an employer to provide disclosures or obtain proper authorization from an applicant. Of note, although these authorization and disclosure requirements may appear to be relatively straightforward, case law has created additional requirements separate and distinct from the plain statutory requirements, which may not be obvious from a plain and ordinary reading of the FCRA alone. For example, in Walker, et al. v. Fred Meyer, Inc. , 953 F.3d 1082, 1088 (9th Cir. 2020), the Ninth Circuit interpreted the statutory requirement that the above disclosures be contained in a document that “consists solely of the disclosure,” 15 U.S.C. § 1681(b)(b)(2)(A)(i), to mean that an employer cannot place required state background check disclosures in the same document as the FCRA disclosures. The plaintiff ’ s bar has seized on this case law by bringing class actions against well-meaning employers who include required California background check disclosures in the same document containing required FCRA disclosures. Even where plaintiffs cannot prove actual damages, they may still have grounds for a class action lawsuit based on these technical non-compliance issues. Case law based on FCRA procedural violations remain prevalent, whether for failure to disclose, improper authorization language, or failure to follow the adverse action process, and technical non-compliance with the FCRA’s complex requirements has become a consistent source for class action lawsuits. While employers must be vigilant in their efforts to avoid running afoul of the FCRA authorization and disclosure requirements, the third-party agencies they obtain consumer reports from must also take active steps to ensure that they provide accurate reports. The FCRA requires consumer reporting agencies (CRAs) that furnish consumer reports to “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates. See 15 U.S.C. § 1681(e)(b). Additionally, when an individual makes a request, CRAs must provide “[t]he sources of the information” that the CRA used to generate a consumer report. See 15 U.S.C. § 1681(g)(a)(1). The plaintiff ’ s bar is quick to investigate violations of these provisions and bring Rule 23 class actions against CRAs. Although the amount of potential FCRA claims consumers can bring against employers and CRAs may appear daunting, the recent U.S. Supreme Court decision in TransUnion LLC v. Ramirez, et al., 141 S.Ct. 2190, 2199 (2021), substantially limits FCRA class actions by making it clear that only consumers who have “been concretely harmed by a defendant ’ s statutory violation may sue that private defendant over that [FCRA] violation in federal court.” Id. at 2205. In TransUnion , the plaintiff sued the defendant credit reporting agency TransUnion, in part, for the company ’ s alleged failure to “follow reasonable procedures to ensure the accuracy of information in his credit file.” Id. at 2202. Plaintiff specifically alleged that, on his credit report disseminated to an auto dealership, TransUnion had incorrectly matched his name with the name of another person who was on a State Department list of individuals who threaten America ’ s national security. Id. at 2201. Plaintiff sought to represent a class of 8,185 individuals. Id. at 2202. Of these 8,185 individuals, the Supreme Court held that only 1,853, including the named plaintiff, could bring FCRA claims against TransUnion because TransUnion had disseminated their potentially defamatory credit reports, which incorrectly showed they were on the U.S. State Department ’ s national security watch list, to third parties. Id. at 2209. However, the remaining 6,332 class members could not bring FCRA claims against TransUnion because the record definitively showed that TransUnion had not distributed their potentially defamatory credit reports to third-party creditors. Id. Thus, the Supreme Court in TransUnion announced an important requirement in FCRA actions, that plaintiffs must at least allege that they have suffered “injury-in-fact” that is “concrete… real, and not abstract,” to succeed in establishing a viable FCRA claim. Id. at 2204. As detailed below, this aspect of TransUnion has continued to impact FCRA class action litigation in 2024 and

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will likely continue to shape the landscape of this burgeoning area of law for years to come. Notably, in addition to the FCRA, several states have enacted their own “mini” consumer credit reporting laws, including Arizona, California, Colorado, Connecticut, Florida, Georgia, Illinois, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Hampshire, New Jersey, New Mexico, New York, Ohio, Oklahoma, Oregon, Texas, Vermont, Virginia, and Washington. While some closely track the FCRA, others impose additional requirements and stricter standards upon both employers and the consumer reporting agencies they utilize. The Fair Debt Collection Practices Act (FDCPA), on the other hand, is the main federal law that governs debt collection practices. The FDCPA prohibits debt collection companies from using abusive, unfair, or deceptive practices to collect debts. The FDCPA covers the collection of debts that are primarily for personal, family, or household purposes. Under the FDCPA, debt collectors can include collection agencies, debt buyers, and lawyers. Any FDCPA-covered debt collector who contacts an individual is required to inform that person of certain information about its business and attendant services. The FDCPA imposes limits on when debt collectors may contact individuals, the way they can initiate contact, including prohibitions against harassment or intimidation, and further requires that debt collectors offer an opt-out mechanism. Given this background, significant decisions in 2024 can be grouped into several categories, which are discussed in turn below, including: (i) FCRA rulings over the provision of allegedly inaccurate or incomplete reports; (ii) key FCRA class certification rulings (including orders granting, denying, and remanding certification); (iii) key FACTA rulings; and (iv) key FDCPA rulings. Notably, courts in 2024 granted motions for class certification in 38% of FCRA/FACTA/FDCPA actions. This was a significant decrease from 2023, when plaintiffs’ success rate was 75%.

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II. Key FCRA Rulings Over Provision Of Allegedly Inaccurate Or Incomplete Reports A majority of the FCRA class action cases in 2024 involved allegedly inaccurate and/or incomplete information on consumer reports and a CRA’s failure to correct the disputed information. While individual, one-off mistakes may be unavoidable, systemic issues in a reporting system provide the plaintiff ’ s class action bar with ample evidence to argue that class certification is proper, especially given the stringent requirements in the applicable statutory schemes. Specifically, the FCRA demands CRAs “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.” 15 U.S.C. § 1681e(b). While the term “accuracy” is not defined in the statute, it has long been understood to encompass “both truth and completeness – a report that is misleading or materially incomplete is inaccurate.” Chaitoff , 79 F.4th at 809. Once a plaintiff establishes a threshold showing that the information on a consumer report was inaccurate or misleading, the FCRA provides a separate cause of action for negligent violations and willful violations. See 15 U.S.C. § 1681n(a) & § 1681o(a). To recover for a negligent violation of § 1681e(b), a plaintiff must prove that: “(a) the CRA failed to follow reasonable procedures to ensure the maximum possible accuracy of its consumer reports, and (b) he or she suffered an injury caused by this negligence.” In Re Equifax Fair Credit Reporting Act Litigation , 2023 WL 6192732, at *1 (N.D. Ga. Sept. 11, 2023). To establish and recover on a willful violation, “the consumer must additionally ‘ prove that a consumer reporting agency either knowingly or recklessly violated the requirements of the [FCRA].” Id. A consumer is entitled to dispute any portion of their consumer report they believe to be inaccurate or incomplete. When the CRA is notified of a consumer dispute, the FCRA directs the CRA to “conduct a ‘ reasonable reinvestigation to determine whether the disputed information is inaccurate,’ considering ‘ all relevant information submitted by the consumer. ’ ” Id. (citing 15 U.S.C. §§ 1681i(a)(1)(A), (a)(4)). Section 1681i of the FRCA requires the CRA to conduct a reasonable reinvestigation only if a consumer disputes “the completeness or accuracy of any item of information contained in a consumer ’ s file.” See 15 U.S.C. § 1681i. If the reinvestigation by a CRA fails to resolve the dispute, a consumer is permitted to “file a brief statement setting forth the nature of the dispute.” See 15 U.S.C. § 1681i(b). Once a consumer files a brief statement with the CRA, the CRA must clearly note on any subsequent report that the information “is disputed by the consumer and provide either the consumer ’ s statement or a clear and accurate codification or summary thereof.” Id. If the CRA fails to do so, it may be liable for violating the FCRA. Importantly, however, “[a] CRA ’ s liability under both § 1681e(b) and § 1681i(a) depends on inaccurate information – if the credit report is accurate, the consumer has suffered no damages.” Chaitoff , 79 F.4th at 811. Thus, the touchstones of whether a report is duly “accurate” and/or “complete” have proven to be of central concern in recent years, and 2024 was of no exception. When the CRA furnishes a background report for employment purposes that includes “matters of public record [that] are likely to have an adverse effect upon a consumer ’ s ability to obtain employment,” the CRA must “maintain strict procedures designed to insure that whenever public record information which is likely to have an adverse effect on a consumer ’ s ability to obtain employment is reported it is complete and up to date.” See 15 U.S.C. § 1681k(a). For example, the plaintiff in Hernandez, et al. v. Newrez, LLC d/b/a Shellpoint Mortgage Servicing, 2024 U.S. Dist. LEXIS 40745 (E.D. Penn. Mar. 8, 2024), filed a class action alleging that the defendant violated the Real Estate Settlement Procedures Act (RESPA) and the FCRA by mishandling home-mortgage payments, which resulted in negligent credit reporting and improper fees. The plaintiff’s proposed class for the FCRA claims consisted of “all loan borrowers in the United States during the applicable statute of limitations period: (i) who have or had mortgage loans secured by residential real property obtained for personal, family, or household use; (ii) whose mortgage loans are serviced by the defendant; (iii) whose payments were inaccurately identified by the defendant as past due 30 or more days; (iv) which such delinquency was furnished to the credit bureaus; (v) who were harmed, within the statutory limits prescribed by 15 U.S.C. § 1681p of the FCRA, due to the

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defendant’s practice of failing to conduct a reasonable investigation and/or reinvestigation into consumer disputes received; and (vi) who were also harmed by the defendant’s practice of continuing to furnish inaccurate and/or incomplete information to the credit bureaus in violation of the FCRA. Id. at *10-11. The defendant moved to strike the class allegations on the grounds that the class claims were unsupportable and prejudicial. The court denied the motion. It noted that motions to strike class allegations before discovery or certification are generally disfavored, that determining class certification suitability requires a more developed record, and that the mere existence of individualized questions did not automatically preclude class certification. The defendant also argued that the plaintiff’s proposed classes were impermissible fail-safe classes because class membership was contingent on liability. The court concluded that the current class definitions did condition membership on liability to some extent but that did not warrant striking the class allegations outright given the early stages of the litigation, where plaintiff had ample opportunity to redefine certain aspects of the class definitions to address the fail-safe problem. The defendant further argued that individual questions would predominate over common questions in both RESPA and FCRA claims such that class certification would be inappropriate. The court acknowledged that some individualized inquiry might be necessary but also noted that the existence of such questions did not automatically preclude class certification. The court opined that predominance requires a determination of whether common questions outweigh individual ones on balance, which typically requires at least some form of discovery. For these reasons, the court denied the defendant’s motion to strike the plaintiff’s class allegations because the proposed classes were not clearly deficient and could potentially be certified with modifications. In Holden, et al. v. Holiday Inn Club Vacations Inc., 98 F.4th 1359 (11th Cir. 2024), the plaintiffs filed a class action alleging that defendant inaccurately reported their debts to Experian in violation of the FCRA. The defendant, a timeshare company whose customers pay for the right to use vacation properties and cover associated fees, sold and financed the plaintiffs’ timeshares. The purchase agreements included provisions about default and cancellation, stating that if the plaintiffs defaulted, all payments made would be retained as liquidated damages. Though the plaintiffs both defaulted and ceased making payments on the timeshares, they nevertheless asserted that the agreements were improperly terminated according to the defendant’s default provisions. The defendant reported the debts to Experian, which found the debts to be accurate and ultimately sent debt collection letters to the plaintiffs. The district court ruled that the inaccuracies were legal disputes rather than factual errors, and thus not actionable under the FCRA. On appeal, the Eleventh Circuit affirmed the district court’s ruling. Under the FCRA, furnishers of credit information are required to provide accurate information and to investigate disputes. However, FCRA claims must be based on inaccuracies that are objectively and readily verifiable. The Eleventh Circuit agreed with the district court that the core issue was not the factual accuracy of the reported debts but rather interpretations of the applicable contract terms and the parties’ respective legal obligations. The Eleventh Circuit concluded that such legal disputes do not meet the FCRA’s standard for actionable inaccuracies. For these reasons, the Eleventh Circuit affirmed the district court’s ruling since the plaintiffs’ claims were not actionable under the FCRA. III. Key FCRA Class Certification Rulings To secure class certification, a plaintiff must establish that a proposed class meets requirements of numerosity, typicality, commonality, and adequacy of representation in Rule 23(a). In addition, a plaintiff must show that one of three alternatives outlined in Rule 23(b) applies. While plaintiffs bear the burden of establishing that the Rule 23 requirements are met, “they need not make that showing to a degree of absolute certainty. It is sufficient if each disputed requirement has been proven by a preponderance of evidence.” Messner, et al. v. Northshore University Health System , 669 F.3d 802, 811 (7th Cir. 2012). IV. Key FCRA Rulings Granting Class Certification The plaintiff in Brooks, et al. v. Trans Union LLC , 2024 U.S. Dist. LEXIS 136116 (E.D. Penn. Aug. 1, 2024), filed a class action lawsuit against the defendant, claiming the company violated the FCRA by selling consumer credit reports to third-party creditors that incorrectly stated the consumers had filed for bankruptcy. The plaintiff, who had never filed for bankruptcy, alleged that the defendant provided erroneous reports that caused his credit

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to be impacted due to a bankruptcy notation. The plaintiff filed a motion for class certification, which the court granted. The plaintiff proposed a two-step process to identify potential class members, including: (i) reviewing the defendant’s files to identify those with a bankruptcy remark on tradelines but no public bankruptcy record; and (ii) cross-referencing these files with the Public Access to Court Electronic Records (PACER) system to confirm whether those individuals had filed for bankruptcy in the past 10 years. The defendant argued that the proposed class did not meet the required elements under Rule 23. The court disagreed. It granted the plaintiff’s motion for class certification. In doing so, the court found that the defendant’s internal data and the proposed process for identifying class members – despite some challenges with accessing older data – were feasible. The court further found that the class was sufficiently large to make joinder impractical; even with limited data, the court estimated hundreds of potential class members were in just a few sample months of the 37 months then at issue. The court also found that the plaintiff’s claims were typical of the class, as he alleged that the defendant reported inaccurate bankruptcy information on their credit reports in violation of the FCRA. Moreover, the court held that the plaintiff and his attorneys were qualified and capable of adequately representing the class. The defendant also argued that individualized issues about the accuracy of each credit report (whether each report was inaccurate due to a bankruptcy filing) predominated over common issues and that multiple individualized categories for identifying bankruptcy filings would unduly complicate the case. In contrast, plaintiff proposed a method to determine bankruptcy status based on matching the class member’s social security number with bankruptcy records, arguing this approach would work for all class members. The court rejected the defendant’s argument and further found that the central question of whether a report was inaccurate based on bankruptcy data could be resolved using class-wide evidence and therefore that common issues predominated. Finally, the court ruled that a class action would be the superior method of adjudication as individual class members were unlikely to have a strong interest in pursuing their claims separately, given the uniformity of the issues and the limited statutory damages amounts at issue. For these reasons, the court granted the plaintiff’s motion for class certification. Similarly, in Miller, et al. v. United Debt Settlement, LLC , 2024 U.S. Dist. LEXIS 129701 (S.D. Ohio July 23, 2024), the plaintiffs filed a class action lawsuit against United Debt Settlement, LLC, Everything is in Stock, LLC (operating as Elite Restaurant Equipment) (United Debt), and individuals Marcel Bluvstein (Bluvstein) and Gabriel Gorelik (Gorelik), alleging violations of the FCRA. The plaintiffs claimed that the defendants illegally accessed consumer credit reports by marketing debt settlement and debt repair services without due consent. After being served with the complaint, defendants United Debt and Gorelik failed to respond or file any legal pleadings, resulting in entry of default judgment against them. The court separately dismissed defendant Bluvstein from the case due to improper service. The plaintiffs subsequently filed a motion for class certification, and the court granted the motion. The plaintiffs sought to certify a class consisting of Ohio citizens whose consumer reports were accessed by the defendants for an impermissible purpose. The court found that the class was sufficiently numerous to make individual joinder impractical, as defendants allegedly accessed the consumer reports of tens of thousands of Ohio citizens. Next, the court determined that there were common questions of law and fact affecting all class members, such as whether the defendants accessed consumer reports without a permissible purpose, whether their actions were willful, and whether they violated the FCRA. The court concluded that the claims of the plaintiffs were typical of the class because both they and the class members suffered the same harm – namely, access of their personal financial information without consent. The court opined that the plaintiffs would adequately represent the class because they shared common interests with the class members, and they had qualified counsel to vigorously pursue the case. As to the Rule 23(b) requirements, the court noted that common issues predominated over any individual issues in the case. The key issue – whether the defendants improperly accessed consumer reports – applied equally to all class members, and since the plaintiffs were seeking statutory and punitive damages, there was no need for individualized damages analysis. Finally, the court concluded that a class action would be a superior method for adjudicating the claims, as it would be more efficient than individual lawsuits and would allow for fairer and more uniform relief for the class members. For these reasons, the court granted the plaintiffs’ motion for class certification. Finally, in Helwig, et al. v. Concentrix Corp., 2024 U.S. Dist. LEXIS 49477 (N.D. Ohio Mar. 20, 2024), the plaintiff, a job applicant, filed a class action alleging that the defendant violated the FCRA by failing to provide him and other applicants with a meaningful opportunity to contest negative information provided in background checks before taking adverse employment actions. The plaintiff filed a motion for class certification, and the court granted the motion in part. The plaintiff contended that after he applied for a position with the defendant, it informed him that his application was pending on receipt of a background check. A few days later, the plaintiff

FCRA Class Action Review – 2025

received an email from the defendant indicating that he was no longer being considered for employment due to potentially disqualifying information in his background check ( i.e., a conviction for aggravated trespassing). The plaintiff contended that at least 50 other applicants received similar emails and he sought to certify a class of all individuals who submitted applications and were subject to background checks by the defendant. The defendant argued that its policy would not be to send an email, and rather it directed employees to make telephone calls to inform applicants of adverse actions. The court found that while the numerosity requirement was satisfied, the class lacked commonality due to the variations in communication methods and respective messages conveyed to applicants allegedly at issue. The court stated that although the plaintiff sufficiently alleged that 50 other applicants received the same email, he could not establish that every person subject to a background check had the same common experience. The court thus ruled that if it granted certification, it would be to a smaller class comprising the approximately 50 individuals who received emails like the plaintiff. The court found that of those 50 individuals, there was a common question of law and fact – whether all applicants with negative information in their background checks had adverse actions taken against them without a chance to challenge the information. The court also stated that the plaintiff failed to meet the typicality requirement of the proposed class. Instead, the court found the plaintiff’s claims were typical of the approximately 50 individuals who received emails like his. The court determined that a class action would be the superior method for resolving the FCRA claims, specifically those related to the defendant’s allegedly improper emails. Accordingly, the court granted class certification but limited to those applicants who received the same email that the plaintiff received in response to their background check results. V. Key FCRA Rulings Denying Class Certification Defendants also succeeded in blocking class certification in 2024 as well. Conversely, the court in Ballard, et al. v. Citadel Servicing Corp ., 2024 U.S. Dist. LEXIS 133756 (C.D. Cal. July 29, 2024), denied the plaintiffs’ motion for class certification. The plaintiffs filed a class action against the defendants concerning the reporting of their mortgage status after they faced financial difficulties during the COVID-19 pandemic. The plaintiffs asserted that their home loan, which they struggled to pay, was improperly reported as delinquent following payment accommodations from the defendant in violation of the California Consumer Credit Reporting Agencies Act and the FCRA. The plaintiffs had taken a $423,750 home loan from the defendant but faced difficulties in making payments due to financial strains caused by the pandemic. The plaintiffs initially entered a forbearance agreement in 2020, during which the defendant assured them that their payments would be suspended and that they would not be reported as delinquent. However, there was a dispute over the specific months covered by this forbearance - namely, whether it spanned August to November 2020 or alternatively September to December 2020. In December 2020, despite being in the forbearance plan, the defendant issued a Notice of Intent to Foreclose, claiming that the plaintiffs were in default. The plaintiffs sought to certify both: (i) a debt collection class, consisting of individuals in California who had received similar accommodations and then received debt collection notices; and (ii) a credit reporting class for those whose accounts were reported as delinquent under similar circumstances. The defendant opposed certification, arguing that the unique circumstances of the plaintiffs’ situation precluded various required elements under Rule 23 from being met, including typicality and adequacy. The court found that the issues faced by the plaintiffs were not typical of those faced by other potential class members. Hence, the unique questions about the terms of their forbearance and how their loan was reported effectively rendered plaintiffs’ claims atypical compared to those of the potential class members. The court also concluded that the plaintiffs could not serve as adequate representatives because their specific circumstances – particularly regarding the forbearance term and reporting status – would divert resources away from the class claims and run contrary to the putative class members’ interests. The court determined that the class failed to meet the predominance requirement of Rule 23(b) on the same basis. Given the substantial evidence presented detailing the plaintiffs’ specific situation, the court determined that these individual disputes would dominate the litigation and hinder a cohesive resolution for the class. For these reasons, the court denied the plaintiffs’ motion for class certification. In Pena, et al. v. Experian Information Solutions, Inc., 2024 U.S. Dist. LEXIS 214641 (C.D. Cal. Nov. 14, 2024), the plaintiffs alleged that the defendant provided inaccurate credit reports with false OFAC watchlist hits. The plaintiff filed a motion for class certification, and the court denied the motion. The plaintiff sought to represent a class of individuals who had similar false OFAC hits on their credit reports and alleged that the defendant violated the FCRA by failing to ensure the maximum possible accuracy of consumer credit reports. The court

FCRA Class Action Review – 2025

found that the plaintiff failed to meet the typicality and adequacy requirements, as her claims were filed after the statute of limitations, and the plaintiff was representing her late husband, and therefore could not testify about when her husband first discovered the error in his credit report. The court thus determined that the plaintiff could not be an adequate class representative and that her claims were not typical to those of the class. Accordingly, the court denied the plaintiff’s motion for class certification. In another case of note, Carr, et al. v. Regulatory Datacorp, Inc . et al. , 2024 U.S. Dist. LEXIS 152357 (E.D. Penn. Aug. 26, 2024), the plaintiff similarly filed a class action lawsuit against the defendants alleging violations of the FCRA. Specifically, the plaintiff in this case alleged that the defendants violated § 1681e(c) by providing Capital One, one of defendants’ customers, with a purported consumer report detailing his criminal trafficking infractions, which led to the wrongful closure of his account, and then prevented Capital One from disclosing the contents of the report. The plaintiff filed a motion for class certification, seeking to certify a class of individuals whose Capital One accounts were closed based on reports provided by the defendants, and who were allegedly denied access to the contents of those reports. The plaintiff specifically asserted that Capital One queried information about the plaintiff using the defendants’ reporting system. The query returned a report containing an article about the plaintiff’s son, Jeffrey Nigel Carr, Jr., who had been convicted of trafficking offenses. Capital One mistakenly believed the report referred to Jeffrey N. Carr, Sr., and closed his account. Despite the plaintiff’s protests, Capital One did not disclose the report provided by defendants or its contents, nor did they reveal the source of the information used to close the account. The plaintiff alleged that the defendants’ actions violated § 1681e(c) of the FCRA. The court, however, found that the plaintiff’s class failed to meet the requirements under Rule 23. Although the plaintiff contended that there were over 19,000 individuals affected by the same issue, the court opined that he failed provided enough evidence to show that these account closures were specifically tied to the defendants’ reports or that they were associated with natural persons within the United States. Additionally, the evidence did not establish how many closures were due to the defendants’ reports specifically, as some were based on other sources. Therefore, the court found that the plaintiff failed to meet the numerosity requirement for class certification. The court also determined that the plaintiff failed to meet the ascertainability requirement, because the plaintiff’s evidence showed that Capital One would be unable to identify which account closures were based on the defendants’ reports alone and would need to manually review thousands of records to determine the source of each closure. For these reasons, the court denied the plaintiff’s motion for class certification. VI. Key FCRA Circuit Court Rulings Remanding Or Otherwise Mandating Reconsideration Of Prior Certification Decisions The plaintiffs filed a class action in Santos, et al. v. Healthcare Revenue Recovery Group, LLC., 90 F.4th 1144 (11th Cir. 2024), alleging that the defendant failed to provide accurate credit reports in violation of the FCRA. The district court denied the plaintiffs’ motion for class certification. The district court concluded that under 15 U.S.C. § 1681n(a)(1)(A), consumers seeking statutory damages for willful violations of the FCRA need to prove actual damages. The plaintiffs had alleged that the defendant had erroneously reported inaccurate status dates on credit reports, affecting over 2.1 million consumers. The key legal question was the interpretation of the second option in § 1681n(a)(1)(A), which allows consumers to recover “damages of not less than $100 and not more than $1,000” for willful violations (compared to the first option where penalties of up to $2,500 can result given the extent of actual damages at issue). Id. at 1148. The defendant argued that consumers must prove actual damages to recover under this provision, while the plaintiffs contended that statutory damages could be recovered without proving actual damages. On the plaintiffs’ appeal, the Eleventh Circuit, after a panel rehearing, vacated its prior opinion and clarified that under § 1681n(a)(1)(A), consumers can seek statutory damages without proving actual damages. The Eleventh Circuit reasoned that the language of the statute itself distinguishes between “actual damages” required under the first option of the provision and “damages” available under the second option. Unlike the first option, the second option does not expressly mandate proof of actual damages, therefore evidencing Congress’ intention to provide a minimum statutory recovery for willful violations of the FCRA. The Eleventh Circuit also noted that its interpretation aligns with decisions of other federal circuits and is consistent with the legislative purpose of the FCRA to protect consumer rights against inaccurate credit reporting. Additionally, the Eleventh Circuit held that the district court’s denial of class certification was based on an incorrect interpretation of the damages provision. As a result, the Eleventh Circuit ruled that the denial of class certification was an abuse of discretion and remanded the case for further proceedings consistent with its

FCRA Class Action Review – 2025

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