by David A. Szwak, Esq., Shreveport, Louisiana
When faced with a potential Fair Credit Reporting Act case, it is
crucial that you identify the correct statute(s) of limitation for
claims against consumer reporting agencies and subscribers. The FCRA
provides a two (2) year statute of limitation commencing from the date
of the violation of the Act, regardless of whether the victim even knows
of the violation. It is perhaps the least consumer-friendly provision
of the anti-consumer FCRA.
Where an action against a consumer reporting agency is lodged under the
FCRA, it must be analyzed accordingly. If more than two years have
tolled since the violation of the FCRA, then any cause of action as to
that specific violation may be prescribed. If an action against the
consumer reporting agency is based on state law theories, under 15
U.S.C. 1681h(e), then state law statute of limitations should be
applied. Most subscribers are not directly subject to actions under the
FCRA. However, if the subscriber violates the "user" provisions of the
FCRA, then liability under the FCRA exists and suit on the cause of
action for the violation of the FCRA must be brought within two (2) year
statute of limitation commencing from the date of the violation of the
Act. Again, if the action against the subscriber is a state law action,
under 15 U.S.C. 1681h(e), then state law statute of limitations should
be applied. The uniform rules applicable to the consumer reporting
agencies under the FCRA do not apply to common law claims against the
agencies, subscribers or other third parties. In federal court these
state law claims would be covered by the "Erie" doctrine.
A limited exception to the two year statute of limitation under the
FCRA, 15 U.S.C. 1681p, exists. The "discovery rule" provides that
commencement of the statute of limitation does not begin until the
consumer knew or should have known of the issuance of the report or the
injury was incurred. Some courts have held that the "discovery rule"
only applies in cases where there ave been willful and/or intentional
violations of the FCRA and does not apply to negligence actions. Some
courts have held that the "discovery rule" only applies where the
defendant materially and willfully misrepresented information. The
court in Houghton v. Insurance Crime Prevention Institute, held that the
exception to 15 U.S.C. 1681p requires plaintiff to prove that defendant
materially and willfully misrepresented any information required to be
disclosed to the consumer by the FCRA and the misrepresented information
was material to the establishment of defendant's liability to plaintiff.
In Allen v. Equifax Credit Information Services, Inc., a prisoner sued
Equifax for wrongfully providing his consumer report to the FBI. The
Court dismissed his action finding that more than two years had passed
"from the date on which liability arises." The "material and willful
misrepresentation" exception is a limited exception to the
jurisdictional statute, 15 U.S.C. 1681p. additional exception may not
be implied. The Allen court concluded by commenting that the FCRA
statute of limitations would toll even against an incarcerated person.
In Williams v. Avco, plaintiff sued Avco for impermissibly accessing his
consumer report. Defendant raised the statute of limitations defense.
The Court applied 15 U.S.C. 1681p, but found that the suit record was
not clear as to when Avco "obtained" the consumer report thereby
precluding summary judgment. The date Avco "obtained" the report is
operative as the date of the violation of the FCRA.
Nonetheless, each transmission of the same credit report is a separate
and distinct tort to which a separate statute of limitation applies.
Defendant, who defames plaintiff, is liable for the harm from the
initial reporting and any and all republications which were reasonably
As you can see, the statute of limitations provision under the FCRA can
cause real problems for the consumer or his attorney. Cautiously
determine each action you intend to bring and each FCRA violation you
can prove. Once you determine the dates or "trigger points" for FCRA-
based liability then count forward two years from the commencement or
origination of liability and you should have your statute of limitation.
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