Susan Moreland applied to lease an apartment. The landlord was under contract with SafeRent to conduct criminal and financial background checks for applicants who wanted to lease an apartment. When the landlord received the report on Moreland from SafeRent, the landlord noted that Moreland appeared to have had several aliases and several inaccurate addresses, none of which were disclosed on Morehead’s application. Based on the report from SafeRent, the landlord denied Moreland a lease.
Moreland contacted SafeRent and requested a copy of the report and the consumer file sent to the apartment complex. SafeRent failed to respond to Moreland’s request. Moreland tried to obtain a copy of her file by ordering one through SafeRent’s website; SafeRent again refused to give Moreland a copy of her consumer file.
Moreland sued SafeRent for violation of the federal Fair Credit Reporting Act (FCRA) and the state’s Consumer Credit Reporting Agencies Act (CCRAA). Moreland further alleged SafeRent refused to provide her with a copy of her consumer file and failed to adequately and accurately control its reports. SafeRent filed a motion to dismiss, claiming the company’s actions were reasonable. SafeRent also argued that failure to provide consumer reports (as dictated by the FCRA and CCRAA) did not create liability for SafeRent.
The federal district court granted SafeRent’s motion to dismiss in part. The district court held that the motion to dismiss was premature as to Moreland’s first four claims, which related to SafeRent’s refusal to provide her with a copy of her consumer file. However, the district court granted SafeRent’s motion to dismiss Moreland’s claims based on violations of the FCRA and the CCRAA. The district court opined that the report generated by SafeRent was not a credit report as defined by the FCRA and the CCRAA, and that Moreland had not shown her consumer credit report was used for an impermissible purpose.
This case illustrates that a company providing consumer investigation and background information may be liable for failing to disclose the report or the information they based their report on to the consumer upon request. Although courts have found that some reports are not consumer credit reports, which are subject to the FCRA and state reporting acts, the information obtained and used by the investigation agency must not be used for an impermissible purpose.
Moreland v. CoreLogic SafeRent L.L.C., No. 13-0470 (U.S. District Court for the Central District of California Oct. 25, 2013). Source: Security Law Newsletter, published monthly by Strafford Publications, Atlanta, GA., www.straffordpub.com, 800-926-7926, ext. 10, firstname.lastname@example.org.