Pennsylvania Federal District Court Rules Public Records Vendor is Consumer Reporting Agency Subject to Fair Credit Reporting Act

A Pennsylvania district court has ruled that a company that provides reports based on a search of public records is a “consumer reporting agency” (CRA) as defined by the Fair Credit Reporting Act.

In McGrath v. Credit Lenders Service Agency, Inc., the plaintiffs applied to a bank for a loan to refinance their home mortgage.  The bank engaged Credit Lenders Service Agency (CLSA) to conduct a public records search on the plaintiffs and provide a report.  To prepare a report, CLSA subcontracted with people who go to various record repositories (e.g. directories of open judgments and municipal liens maintained by courts) to conduct a physical search and send the results to CLSA.  CLSA’s report to the bank about the plaintiffs erroneously listed outstanding civil judgments against them.  The plaintiffs claimed that they contacted CLSA which refused to investigate the alleged inaccuracies.

The plaintiffs sued CLSA, alleging that it violated the FCRA by failing to follow reasonable procedures to assure maximum possible accuracy when preparing a consumer report (15 U.S.C. Sec. 1681e(b)) and by failing to conduct a reasonable reinvestigation of the plaintiffs’ dispute (15 U.S.C. Sec. 1681i(a)).  CLSA moved for summary judgment, asserting that it was not subject to the FCRA as a matter of law because it was not a CRA and did not supply “consumer reports” within the meaning of the FCRA.  It also asserted that even if it was subject to the FCRA, no reasonable juror could find that it violated either FCRA provision.