What is the maximum penalty for habitual will for non compliance with the Fair Credit Reporting Act?

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Penalties For Non-Compliance with The FCRA

(a) In general.

Any person who willfully fails to comply with any requirement imposed under this sub chapter with respect to any consumer is liable to that consumer in an amount equal to the sum of—(1)

(A any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000; or

(B) in the case of liability of a natural person for obtaining a consumer report under false pretenses or knowingly without a permissible purpose, actual damages sustained by the consumer as a result of the failure or $1,000, whichever is greater;

(2) such amount of punitive damages as the court may allow; and(3) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney’s fees as determined by the court.

(b) Civil liability for knowing noncompliance

Any person who obtains a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose shall be liable to the consumer reporting agency for actual damages sustained by the consumer reporting agency or $1,000, whichever is greater.

Upon a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney’s fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.(d) Clarification of willful noncompliance.

For the purposes of this section, any person who printed an expiration date on any receipt provided to a consumer cardholder at a point of sale or transaction between December 4, 2004, and June 3, 2008, but otherwise complied with the requirements of section 1681c(g) of this title for such receipt shall not be in willful noncompliance with section 1681c(g) of this title by reason of printing such expiration date on the receipt.

https://www.consumer.ftc.gov/articles/pdf-0111-fair-credit-reporting-act.pdf

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None of the information contained in this web site should be construed as legal advice.All forms, policies, information and procedures should be reviewed by your legal counsel before being used in any way.

By Pamela Q. Devata and Craig B. Simonsen

In a federal rulemaking published last week, the Federal Trade Commission (FTC) has finalized amendments to Commission Rule 1.98 to adjust the maximum civil penalty dollar amounts for violations of sixteen provisions of law. 81 Fed. Reg. 42476 (June 30, 2016).

The U.S. Congress had mandated the formula for calculating the increases under the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015, which included a catch-up provision for inflation. See related Implementation of the Federal Civil Penalties Inflation Adjustment Act, OMB Memorandum M-16-06 (February 24, 2016).

Based on the FTC’s interim final rule recalculation, violations of final Commission orders issued under section 5(b) of the FTC Act, and violations of certain trade regulation rules and other laws enforced by the FTC with civil penalty provisions, will increase significantly from $16,000 to $40,000.

In addition, specifically under the Fair Credit Reporting Act Section 621(a)(2) (duty to correct and update information) for knowing violations of the Act, the per violation penalty will increase from $3,500 to $3,756.

The adjusted violation amounts will take effect on August 1, 2016.

It is interesting that the FTC suggests that the best way to avoid any penalties is to “comply with the law”.  That sounds simple, when writing it in a blog, but real life may be more complicated. Employers and credit reporting agencies conducting background checks should be sure to evaluate their policies and processes in light of these new penalty provisions, and should also train their Human Resources professionals on these laws — to help “comply with the law”.

For more information on employer responsibilities under the FCRA or on the use of criminal background screening in employment, please contact the authors, your Seyfarth attorney, or any member of the Seyfarth Background Screening Compliance & Litigation Team.

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