FCRA Newsletter - November 18, 2011

Edited by Erik J. Grohmann, Marc F. Kirkland, Ginny Hawkinson Webb, P. Ryan Langston, Paul L. Myers, M. Kasey Ratliff, Allison Reddoch, Paul W. Sheldon and Martin E. Thornthwaite

Email Receipt is not "Electronically Printed" Under FACTA

Simonoff v. Expedia, Inc., 634 F.3d 1202, 2011 U.S. App. LEXIS 10374 (9th Cir. 2011)

Facts: Defendant Expedia, Inc. emailed Plaintiff a receipt, which included the expiration date of Plaintiff's credit card. Plaintiff alleged that the receipt he received via email violated the Fair and Accurate Credit Transactions Act ("FACTA"), an amendment to the Fair Credit Reporting Act ("FCRA"). The lower court dismissed Plaintiff's claims under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. The 9th Circuit affirmed the dismissal on appeal.

FACTA. Under § 1681c(g)(1), "no person that accepts credit cards ... for the transaction of business shall print more than the last 5 digits of the card number or the expiration date upon any receipt provided to the cardholder at the point of the sale or transaction." The question considered by the Court was FACTA's interpretation of the words "print" and "electronically printed" in connection with an emailed receipt. Under FACTA, a printed receipt is a receipt that exists in physical form, not one displayed on a computer screen. An electronically printed receipt is simply a receipt printed with an electronic device. The Court concluded that a receipt transmitted to the consumer via email and then digitally displayed on the consumer's screen is not an "electronically printed" receipt and is not regulated by FACTA. Tenth Circuit Holds no Willful FCRA Violation Given Absence of Reckless Misconduct

Birmingham v. Experian, 633 F. 3d 1006, 2011 U.S. App. LEXIS 2340 (10th Cir. Feb. 7, 2011)

Facts: Plaintiff brought FCRA and Utah state law claims against Experian and Verizon Wireless related to a purported identity theft. Plaintiff claimed that two Verizon accounts were fraudulently opened in his name and that fraudulent charges had appeared on his legitimate Verizon account. He was unable to resolve the issue with Verizon, who closed the accounts and reported the adverse charges to the consumer reporting agencies ("CRAs"). Plaintiff claimed that he made two disputes to Experian, however, neither Plaintiff nor Experian had proof of the first dispute being made. Experian did receive the second dispute, and pursuant to its procedures, requested Plaintiff to verify his identity. Experian had no record of a reply, and Plaintiff could not present proof that he ever responded to the request. Plaintiff subsequently brought suit against Experian for violations of § 1681e(b) and § 1681i of the FCRA. Experian moved for summary judgment, which was granted. On appeal, Plaintiff argued that the district court's grant of summary judgment on the willful violation of the FCRA was improper. The Tenth Circuit held that the district court properly granted summary judgment given the absence of evidence of intentional or reckless misconduct.

Reinvestigation. Under § 1681i(a)(1), if a consumer notifies a CRA of a dispute concerning the completeness or accuracy of information in the consumer's file, "the CRA shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file . . . before the end of the 30-day period beginning on the date on which the CRA receives the notice of the dispute from the consumer or reseller." Willful Violation. Citing the Supreme Court's Safeco decision, the Tenth Circuit stated that a willful violation is either an intentional violation or a violation committed by an agency in reckless disregard of its duties under the FCRA. "Recklessness" is measured by an objective standard; action entailing an unjustifiably high risk of harm that is either known or so obvious that it should be known. A company subject to the FCRA does not act in reckless disregard of it unless the action is not only a violation under a reasonable reading of the statute's terms, but shows that the company ran a risk of violating the law substantially greater than the risk associated with the reading that was merely careless. Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 69 (2007). Willful Violation. Based on the Safeco standard, the Tenth Circuit held that Experian was entitled to summary judgment on the willful misconduct claim, noting that there was no described...