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PBSA Journal PAGE 21 JULY/AUG 2021 Except where otherwise indicated, articles are copyright © by PBSA 2021. All rights reserved. Are "No Injury" FCRA Lawsuits in The Rearview Mirror? Yes, according to two recent court decisions. Continued from page 20 to third parties lacked the "concrete injury" required for Article III standing: "The mere presence of an inaccuracy in an internal credit file, if it is not disclosed to a third party, causes no concrete harm." Leoni v. Experian Info. Solutions The issue in this case was whether Experian had willfully or negligently violated the FCRA when it included the wrong date for a bankruptcy in the plaintiff's report. Background David Leoni sued Experian regarding an error in his consumer report. Leoni alleged the report erroneously stated that he owed a debt to Military Star that had been previously discharged in bankruptcy. Leoni requested that Experian reinvestigate. The investigation report subsequently sent to Leoni stated that the Military Star debt was discharged, but incorrectly noted that the debt was "included in Chapter 13 Bankruptcy on November 08, 2016" when it actually had been discharged several months earlier. Leoni's FCRA lawsuit was entirely based on this misdating issue. Analysis of "Willful" and "Negligent" FCRA Claims The Court first analyzed whether Experian committed a willful violation of the FCRA. To prevail on this claim, Leoni would have to demonstrate that Experian "knowingly violated the statute or recklessly disregarded its requirements." The Court found that the record did not raise a material issue of fact that Experian knowingly or recklessly changed the "included in bankruptcy" date. The Court next analyzed Leoni's negligence claim, which it held required a showing of "actual damages". Leoni claimed that (1) he "avoided applying for credit for fear of being denied"; (2) "the inaccurate information could serve as a factor in Experian credit scores"; (3) he "suffered sleepless nights," i.e., emotional distress; (4) he incurred "transportation costs"; and (5) "lost time considering issues related to the inaccurate credit reporting." The Court found that Leoni had failed to offer proof of some of his purported damages, and that some of the categories were not compensable. Specifically, the Court found that (1) Leoni admitted that he feared credit denials not because of the "included in" bankruptcy date, but because of the bankruptcy on his record; (2) Leoni had no evidence that the "included in bankruptcy" date lowered his credit score, as opposed to the bankruptcy itself; (3) Leoni admitted that his sleeplessness was related "to the fact that there's a bankruptcy on [his] credit report" and the fact that his wife was "not sleeping well, [so] I don't sleep because I'm worried about her," instead of "anything specific[] to Military Star"; (4) Leoni had no legal authority in support of his claim of damages for the cost of traveling to his attorneys' office or the time he spent reviewing the credit reports; and (5) several district courts have declined to recognize such expenses as damages when they were incurred for the sole purpose of correcting inaccurate reporting. How CRAs Can Benefit The TransUnion v. Ramirez decision raises the bar for plaintiffs to establish standing in federal court for FCRA violations. Plaintiffs must be able to show concrete harm in the form of monetary, reputational or emotional injury, and cannot rely on the mere violation of a statutory right nor the risk of future harm created by such a violation. This test will often make class certification more difficult. The Leoni v. Experian decision demonstrates that the FCRA's "actual damages" requirement for negligence claims is alive and well. Plaintiffs who cannot tie their claimed damages to specific inaccuracies in their reports should not prevail, and costs incurred to correct inaccurate reporting should be inadequate. l Feel free to contact Joseph Messer at (312) 334-3440 or jmesser@messerstrickler.com for assistance in determining whether these decisions can help you, or if you have questions regarding FCRA in general.

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