11th Circuit Weighs-in on FCRA’s “Maximum Possible Accuracy” Requirement

The Eleventh Circuit recently held that a consumer reporting agency did not adopt an objectively unreasonable interpretation of the Fair Credit Reporting Act (“FCRA” or “the Act”) when it stated on a consumer’s credit report that she was an authorized user of her parents’ delinquent credit card account and used the account when calculating her credit score.  The consumer’s credit score allegedly fell as a result.

FCRA imposes a requirement on consumer reporting agencies, when preparing a consumer report, to follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.  A credit reporting agency that adopts an interpretation of any aspect of FCRA that is objectively unreasonable knowingly violates the Act and is subject to liability.  If a consumer reporting agency bases its interpretation of FCRA on the text of the Act, judicial precedent, or guidance from administrative agencies, courts may find such a reliance to not be objectively unreasonable.

In Pedro v. Transunion LLC, the consumer/plaintiff (“plaintiff”) claimed that a credit reporting agency (“agency”) had violated FCRA by inaccurately listing her parents’ delinquent credit card on her credit report.  The plaintiff argued that the agency had willfully violated FCRA by interpreting the “maximum possible accuracy” standard to require the agency only to report information that is technically accurate.  The main contention in this case came down to whether this interpretation could be considered
“objectively unreasonable.”

The Eleventh Circuit reasoned that the agency had not adopted an objectively unreasonable interpretation of the “maximum possible accuracy” standard.  Courts have offered two definitions of “maximum possible accuracy;” some have ruled the standard requires only that agencies report information that is “technically accurate,” while others have ruled that it requires agencies report information that is both “technically accurate” and not misleading or incomplete.  The Court of Appeals noted that, although the latter reading perhaps captures the essence of the standard better, it was not objectively unreasonable to adopt the former interpretation.  In so holding, the Court reasoned that the interpretation had a foundation in the statutory text and had been adopted by multiple courts.  Importantly, the plaintiff could not cite any legal authority that may have warned the agency that the view it took was unreasonable.

The Eleventh Circuit’s opinion may be found here.