Legal Memorandum: Damages under the FCRA

Issue: What damages may be sought under the Fair Credit Reporting Act’s (FCRA) 15 U.S.C. 1681?

Under 15 U.S.C. § 1681n(a)(1)(A), actual damages may be awarded for willful noncompliance with the statute, ranging from $100 to $1,000.  Actual damages include out-of-pocket losses, as well as compensation for humiliation, anguish, and mental pain.  44 Am. Jur. Proof of Facts 3d 287, § 37.  In this context, “willful” requires a showing that a defendant knowingly and intentionally committed an act in conscious disregard for the rights of others, or that the defendant was consciously aware that the plaintiff contested the accuracy of the consumer report and then proceeded to report the inaccuracy anyway.  Id. § 39 (citing cases). 

To survive a motion to dismiss, a “plaintiff must provide more than labels and conclusions” to support his allegations.  Bahr v. Capella Univ., 788 N.W.2d 76, 80 (Minn. 2010) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)).  The complaint must allege facts sufficient to plausibly suggest the defendant’s state of mind, and the court is not bound by conclusory assertions of knowledge or intent, such as allegations that the defendant acted “willfully and maliciously.”  See generally Ashcroft v. Iqbal, 556 U.S. 662 (2009).

Punitive damages are also available for willful noncompliance with the FCRA, as the court allows (and assuming willfulness is established).  Id. § 1681n(a)(1)(B)(2).  If the plaintiff prevails, he may also be awarded his costs and attorneys’ fees.  Id. § 1681n(a)(1)(B)(3).  The same general damages and attorneys’ fees provisions apply in cases of negligent noncompliance, except that: (1) the […]