When State Farm Bank allegedly obtained consumer reports without a permissible purpose, they were in violation of the Fair Credit Reporting Act (FCRA) and Regulation V. In late 2018, a settlement was announced to resolve the suit. According to the settlement, State Farm Bank, a federal savings association agrees not to violate the FCRA or Regulation V. They also agree to implement and maintain reasonable policies, procedures, and processes that will address the particular business practices that are at issue in the consent order and actively prevent future violations.
According to the consent order, State Farm Bank violated a number of different laws and regulations. They violated FCRA, Regulation V, and the Consumer Financial Protection Act of 2010 when they obtained consumer reports without permissible purpose. They were in violation again when they furnished information on consumers’ credit to credit-reporting agencies that the bank knew or had reasonable cause to believe was not correct. State Farm Bank also failed to promptly update/correct info furnished to credit reporting agencies (CRAs) and furnished info to CRAs with no notice that the info was in dispute by the consumer. And lastly, the State Farm Bank failed to establish or implement reasonable policies and procedures to promote and support accuracy and integrity of info offered to CRAs.
The FCRA requires that consumer reports only be used or obtained for permissible purposes. These permissible purposes are listed in detail by the statute. Simply put, no one should use or obtain a consumer report for any reason unless the consumer report is authorized to be furnished and one other condition is met. Permissible reasons include consumer reports furnished in connection with a credit transaction involving the consumer on whom the info is being furnished and involving an extension of credit or review or collection of the consumer’s account. Allegedly, State Farm obtained consumer reports of consumers who were not seeking an extension of their credit, which is in obvious violation of FCRA.
If you have questions about what constitutes a violation of FCRA or if you have experienced an FCRA violation and need to know how to file a class action lawsuit, please get in touch with one of the experienced consumer law attorneys at Aronow Law PC as soon as possible.