A magistrate judge in the Northern District of Georgia recently recommended granting summary judgment in a Fair Credit Reporting Act (FCRA) case in favor of a background reporting company on the grounds that a report given only to the consumer is not a consumer report and including a valid conviction on a report does not violate the FCRA as long as its expungement is also included.
In Peeples v. National Data Research, Inc. (NDR), the plaintiff applied to a pre-med program at a school that required a background report from NDR as part of its application requirements. NDR’s report on the plaintiff listed a 2003 criminal conviction for “giving false information.” The 2003 conviction, however, was expunged by court order in December 2019. The report from NDR did not contain any information about the expungement and NDR did not have a policy to investigate whether court records have been expunged absent a consumer dispute.
NDR provided the background report to the plaintiff only. The plaintiff then requested removal of the conviction due to the expungement. NDR confirmed the plaintiff was convicted for giving false information and the judgment was expunged. It updated the report to include the expungement but did not remove the underlying conviction.
The plaintiff sued NDR for violation of two sections of the FCRA: § 1681e(b) for failing to follow reasonable procedures to assure maximum possible accuracy in the report; and § 1681i for failing to perform a reasonable reinvestigation and correct or suppress the expunged record and maintain reasonable procedures to prevent that inaccurate information from reappearing.
In the report and recommendation, the magistrate judge began the analysis by noting that the Eleventh Circuit draws a distinction between a consumer report and a credit file. A consumer report requires communication of the information to a third party. Section 1681e(b) relates solely to information in a consumer report. Because NDR provided the report only to the plaintiff, it was not a consumer report. NDR’s knowledge the plaintiff would be submitting the report to her school did not make it a consumer report because NDR was not the one providing it to a third party. As a result, the magistrate judge recommended the district court grant NDR summary judgment on the § 1681e(b) claim.
When considering the plaintiff’s claim under § 1681i, the court accepted that the report was inaccurate/incomplete when it did not include the expungement information, that the plaintiff notified NDR, and that her dispute was not frivolous, focusing only on whether NDR conducted a reasonable reinvestigation of the disputed item — the conviction — and whether failure to remove it caused the plaintiff harm. The magistrate judge noted that federal courts have generally held that including a valid conviction on a background report does not violate the FCRA, even if that conviction was later set aside, dismissed, or expunged. “For purposes of FCRA reporting, the historical fact of [the plaintiff’s] conviction was not altered by the expungement order, and the FCRA expressly permits consumer reporting agencies to report ‘records of convictions of crimes.’ 15 U.S.C. § 1681c(a).” Federal law, not South Carolina law, dictates the conviction is still a conviction. Ultimately, while the original report of conviction was incomplete, once NDR modified and corrected the report to include the expungement, nothing more was required and summary judgment was recommended in NDR’s favor on this claim.
