AGG Talks: Background Screening

Episode Summary

Episode Title: A Refresher on Responding to Consumer File Requests under Section 609 of the FCRA
Date: October 29, 2021
Host: Henry Chalmers
Guest: Morgan Harrison
Firm: Arnall Golden Gregory LLP

Episode Overview

This episode dives into the legal requirements and practical considerations for responding to consumer file disclosures under Section 609 of the Fair Credit Reporting Act (FCRA). Host Henry Chalmers and guest Morgan Harrison—both attorneys at AGG—explain what information consumer reporting agencies (CRAs) are obligated to disclose, analyze the Supreme Court's recent ruling in TransUnion LLC v. Ramirez, and discuss lower court decisions clarifying consumer rights and CRA duties.

Key Discussion Points and Insights

1. What is Required by Section 609 of the FCRA?

[01:19 – 02:33]

• Consumer File Request Requirements

  • CRAs must provide, upon request, "all information in the consumer's file at the time of the request," the sources of that information, and the identities of anyone who has received a report about the consumer in the relevant timeframe.
  • "Section 609 of the FCRA requires CRAs to clearly and accurately disclose certain information to a consumer upon request… all information in the consumer’s file… sources… and [the] identity of each person or entity that procured a report." — Morgan Harrison [01:19]

• Definition of “Consumer File”

  • Courts define the “file” as all information recorded and retained by a CRA that either was or might be furnished in a consumer report.
  • Key exclusions: credit scores, audit trails, billing records, consumer relations file contents, and, upon request, the first five digits of social security numbers.
  • "There's a key limitation: the information has been or might be furnished in a consumer report. This doesn't mean everything…" — Morgan Harrison [01:48]

2. Identifying Recipients and Sources

[02:33 – 04:13]

• To Whom Disclosure Must Be Made:

  • CRAs must identify recipients of a consumer report within the last year (or two years for employment-related reports).
  • Recipients include potential employers, landlords, lenders, and resellers.

• Disclosure of Information Sources:

  • FCRA requires identification of sources, but doesn't define “source.” There's consensus that this includes courts and other CRAs.
  • Regarding third-party vendors (middlemen between CRAs and courts), some court decisions have permitted disclosing only the court rather than the vendor.
  • "The Ninth Circuit has warned that it’s not sufficient for a CRA to merely claim it doesn’t know the source of its information. So CRAs do have to make some effort…" — Morgan Harrison [03:45]

3. The Meaning of "Clear and Accurate" Disclosures

[04:13 – 04:41]

• Disclosures must enable consumers to compare their credit file against personal records for accuracy.
• “Courts have held that ‘clear and accurate’ means that the disclosure was made in a manner sufficient to allow the consumer to compare the disclosed information… to determine the accuracy…” — Morgan Harrison [04:22]

4. The Legal Landscape: TransUnion v. Ramirez

[04:41 – 07:25]

• The Supreme Court addressed Section 609 in TransUnion LLC v. Ramirez (June 2021).

  • Class action asserted TransUnion wrongly flagged consumers as potential matches to the OFAC list (e.g., terrorist suspects).
  • Key issue: Whether dual mailings—one with the alert, another with the summary of rights—deprived consumers of information needed to rectify errors before reports went to third parties.

• Court’s Ruling:

  • As long as consumers ultimately receive all information, the format (single or dual mailing) doesn't matter—unless a real injury results.
  • "The court rejected both arguments and essentially ruled that as long as consumers ultimately received all of the required information, it didn’t matter whether it arrived in a single mailing or in two separate mailings." — Morgan Harrison [06:27]

5. Lower Court Consistency and Standing Considerations

[07:25 – 08:29]

• The Supreme Court’s reasoning aligns with lower court cases, such as Puff v. TeleCheck Services, Inc. (Sixth Circuit, 2019).
  • Plaintiffs must show actual harm, not merely a technical violation of Section 609.
  • "A violation of section 609 often doesn’t have any actual consequences… As a result, the plaintiff has not suffered the type of injury required to pursue a claim in federal court." — Morgan Harrison [07:29]

Notable Quotes & Memorable Moments

• On the Scope of “File”:

  “Courts have defined this to include all information on the consumer that is recorded and retained by a CRA that might be furnished or has been furnished in a consumer report...”
  — Morgan Harrison [01:48]

• On Disclosure Requirements:

  “The statute provides the CRA must disclose any recipient of information about the consumer within the one year period prior to the request or two years if the consumer report was furnished for employment purposes.”
  — Morgan Harrison [02:40]

• Regarding Source Disclosure:

  “The Ninth Circuit has warned that it’s not sufficient for a CRA to merely claim that it doesn’t know the source of its information. So CRAs do have to make some effort…”
  — Morgan Harrison [03:45]

• On Format of Disclosures (TransUnion v. Ramirez):

  “As long as the consumers ultimately received all of the required information, it didn’t matter whether it arrived in a single mailing or in two separate mailings.”
  — Morgan Harrison [06:27]

Timestamps for Key Segments

• 01:19 – Fundamental requirements under Section 609
• 01:41 – Definition and limitations of “consumer file”
• 02:33 – Recipients and sources; key legal distinctions
• 04:13 – Clarifying “clear and accurate” disclosures
• 04:41 – Introduction to TransUnion v. Ramirez
• 06:27 – The Court’s analysis and implications for CRAs
• 07:29 – Lower court alignment and the need for actual injury

Conclusion

This episode delivers a clear, practical refresher on what Section 609 of the FCRA demands from CRAs and how recent court decisions—including Supreme Court and appellate rulings—shape the rights of consumers and the obligations of background screening companies. The discussion lays out both the technical compliance framework and the real-world litigation risks, underscoring the importance of clear, accurate, and timely disclosures.

For more information, listeners are encouraged to reach out to the hosts with questions or feedback.