Written by Thomas Ahearn, editor of the ESR News blog
On September 9, 2020, the United States Court of Appeals for the Eleventh Circuit was held in the case of Domante v. Dish Networks, LLC that obtaining a consumer report to verify a consumer’s identity and suitability for a service is a “legitimate business need” and an “eligible purpose” under the federal Fair Credit Reporting Act (FCRA).
Plaintiff Domante was previously a victim of identity theft when her personal information was used on multiple occasions to create accounts with the defendant Dish Networks television provider. The plaintiff filed a lawsuit against the defendant for alleged FCRA violations after learning of the delinquent accounts. The cause has been resolved.
The current lawsuit is the result of plaintiff’s personal information – which included the last four digits of her social security number (SSN), name and date of birth – once again being used fraudulently to request the defendant’s services. Other information, such as surname, address, and telephone number, were different.
The defendant sent the information on the application to a consumer reporting agency (CRA) who provided a consumer report that included the plaintiff’s entire SSN and initiated the processes under the resolution of the first lawsuit which prevented opening an account. At the plaintiff’s request, the CRA deleted the request from his record.
The plaintiff filed a lawsuit alleging that the consumer’s relationship was obtained without “permissible purpose” and the terms of the settlement agreement were violated. However, a court found that the defendant had a “legitimate business need” to obtain the report and complied with the terms of the settlement agreement.
The Court of Appeals found that the FCRA lists “an exhaustive list of” permitted purposes “for which a person may use or obtain a consumer report … One such permitted purpose is when a person” has a legitimate business need for information .. “in connection with a consumer-initiated commercial transaction.” “
The Court of Appeals agreed that “requesting and obtaining a consumer report for verification and eligibility purposes is a ‘legitimate business need’ under the FCRA” and found that “the FCRA does not explicitly require to a prospective consumer referral user before requesting a report. ”
Approved by Congress in 1970, FCRA 15 USC § 1681 promotes the accuracy, fairness and privacy of consumer information held in CRA records and protects consumers from the intentional and / or negligent inclusion of inaccurate information in their consumer reports, including consumer credit information.
Employment Screening Resources® (ESR), a leading global provider of background checks, offers FCRA-compliant background screening solutions, as well as white papers on how employers can avoid FCRA lawsuits and how CRAs can avoid FCRA lawsuits. To learn more about ESR, visit www.esrcheck.com.
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