IN THE UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

________________________

No. 97-4386

________________________

DEBORAH WILSON,

Plaintiff-Appellant

v.

RENTAL RESEARCH SERVICES, INC.,

Defendant-Appellee

________________________

On Appeal from the

United States District Court for

the District of Minnesota

________________________

BRIEF ON REHEARING EN BANC OF AMICUS CURIAE

FEDERAL TRADE COMMISSION

 SUPPORTING REVERSAL OF LOWER COURT’S DECISION

_______________________

Deborah A. Valentine

 General Counsel

David Medine John F. Daly

Associate Director for Financial Practices Assistant General Counsel

Thomas E. Kane David C. Shonka

Attorney Attorney

Bureau of Consumer Protection Federal Trade Commission

Federal Trade Commission 6

th St. and Penn. Ave., N.W.

Washington, D.C. 20580 Washington, D.C. 20580
202-326-2436
i

TABLE OF CONTENTS

 PAGE

TABLE OF AUTHORITIES ...................................... iii

STATEMENT OF INTEREST OF THE FEDERAL TRADE COMMISSION . 1

STATEMENT OF ISSUES ....................................... 2

STATEMENT OF THE CASE ..................................... 3

SUMMARY OF ARGUMENT ..................................... 8

ARGUMENT ................................................. 10

A. Rental Research Is Not Entitled to Judgment as a Matter of Law

Concerning Ms. Wilson’s Claim That It Failed to Follow Reasonable

Procedures ......................................... 10

1. Rental Research’s Reports Are Not Accurate as to the 

Subject of the Report ............................ 10

2. Rental Research’s Procedures Do Not Appear to Be at All

Reasonable .................................... 19

B. The Pre-1996 Version of the FCRA Required Rental Research to

Reinvestigate the Asserted Inaccuracies In the Report It Obtained

From TRW ......................................... 24
ii

CONCLUSION ............................................... 28

CERTIFICATE OF COMPLIANCE

CERTIFICATE OF SERVICE
iii

TABLE OF AUTHORITIES 

CASES PAGE

Bryant v. TRW,

689 F.2d 72 (6th Cir. 1982) ................................................... 13, 15, 18, 20

Cahlin v. General Motors Acceptance Corp.,

936 F.2d 1151 (11th Cir. 1991) ............................................. 11, 19, 21, 24

Cushman v. Trans Union Corp.,

115 F.3d 220 (3rd Cir. 1997) .................................................................. 19

Estiverne v. Sak's Fifth Avenue,

9 F.3d 1171 (5th Cir. 1993) ...................................................................... 1

Guimond v. Trans Union Information Corp.,

45 F.3d 1329 (9th Cir. 1995) ....................................................... 12, 21, 24

Hauser v. Equifax,

602 F.2d 811 (8th Cir. 1979) ............................................................. 20, 22

Henson v. CSC Credit Services,

29 F.3d 280 (7th Cir. 1994) .................................................................... 18

Kates v. Crocker National Bank,

776 F.2d 1396 (9th Cir. 1985) ................................................................ 12

Koropoulos v. Credit Bureau, Inc., ,

734 F.2d 37 (D.C. Cir. 1984) .................................................. 6, 15, 19, 20

Millstone v. O'Hanlon Reports,

383 F. Supp. 269 (E.D. Mo. 1974), aff'd, 528 F.2d 829 

(8th Cir. 1976) .................................................................................. 12, 22

Philbin v. Trans Union Corp.,

101 F.3d 957 (3d Cir. 1996) .............................................................. 15, 21

Pinner v. Schmidt,

805 F.2d 1258 (5th Cir. 1986), cert. denied, 483 U.S. 1022 

(1987) .............................................................................................. 12, 20
iv

Stewart v. Credit Bureau, Inc.,

734 F.2d 47 (D.C. Cir. 1984) ............................................................ 21, 22

Thompson v. San Antonio Retail Merchants Association,

682 F.2d 509 (5th Cir. 1982) ............................................................. 17, 18

Todd v. Associated Credit Bureau Servs., Inc. 

451 F. Supp. 447 (E.D. Pa. 1977), aff’d mem., 578 F.2d 1376

(3d Cir. 1978), cert. denied, 439 U.S. 1068 (1979) ................................. 15

STATUTES 

Fair Credit Practices Act, 15 U.S.C. § 1681 et seq., (relevant amendments found

in 15 U.S.C. 1681, et seq. (Supp. II 1996))

15 U.S.C. § 1681 ............................................................................... 1, 11

15 U.S.C. § 1681a ................................................................................... 2

15 U.S.C. § 1681e [Section 607] ..................................................... passim

15 U.S.C. § 1681g ............................................................................. 1, 14

15 U.S.C. § 1681h ................................................................................. 14

15 U.S.C. § 1681i [Section 611] ...................................................... passim

15 U.S.C. § 1681n ............................................................................... 14

15 U.S.C. § 1681o ................................................................................. 14

15 U.S.C. § 1681s ................................................................................... 1

15 U.S.C. § 1681s-2 .............................................................................. 26

Federal Trade Commission Act:

15 U.S.C. § § 41 et seq. .......................................................................... 1
v

OTHER MATERIALS

116 Cong. Rec. 35940 (1970) .......................................................................... 13

FTC Commentary on the FCRA §604 ("FTC Commentary"), 55 Fed. Reg.

18817 (1990), 16 C.F.R. Part 600 App. ........................................ 4, 19, 20
1

STATEMENT OF INTEREST OF THE FEDERAL TRADE COMMISSION

The Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681, et seq.,

requires “consumer reporting agencies [to] adopt reasonable procedures for

meeting the needs of commerce for consumer credit, personnel, insurance, and

other information in a manner which is fair and equitable to the consumer, with

regard to the confidentiality, accuracy, relevancy, and proper utilization of such

information.” 15 U.S.C. § 1681(b). The Act establishes a dual scheme of private

and public enforcement, and assigns the principal public role to the Federal Trade

Commission (“FTC” or “Commission”) (15 U.S.C. § 1681s). It vests the FTC

with appropriate “procedural, investigative, and enforcement powers.” Id; see 15

U.S.C. § 1681g(c)(3). Practices that violate the FCRA “constitute an unfair or

deceptive act or practice in commerce in violation of the FTC Act.” 15 U.S.C.

§ 1681s(a)(1). The Commission’s interpretations of the FCRA are entitled to

deference by the courts. See Estiverne v. Sak’s Fifth Ave., 9 F.3d 1171, 1173 (5th

Cir. 1993).

The issues in this case concern: (1) the extent of a consumer reporting

agency’s duty to “assure maximum possible accuracy” in consumer reports (15

U.S.C. § 1681e(b); and (2) the obligation of a consumer reporting agency under 15

U.S.C. § 1681i to reinvestigate assertedly inaccurate information that the agency
2

obtains from another consumer reporting agency and resells to its clients. Both

issues have important ramifications for consumers who stand to be harmed by the

inclusion in their consumer reports of derogatory information that does not pertain

to them, or that is otherwise inaccurate. Because this Court’s en banc decision

may significantly affect the FCRA and the Commission’s enforcement of the Act,

the Commission offers this brief to assist the Court’s resolution of this case.

STATEMENT OF ISSUES

The Commission addresses the following two issues in this brief:

1. Whether a consumer raises triable issues of fact as to the reasonableness of a

consumer reporting agency’s procedures when the consumer shows that

much of the information contained in the agency’s report about the

consumer was plainly not about the consumer.

2. Whether the FCRA requires a consumer reporting agency to reinvestigate

information in its file that a consumer disputes if the consumer reporting

agency obtained the information from another consumer reporting agency.
1The FCRA was amended in 1996, and the events in this case occurred

before the amendments became effective. Our discussion therefore focuses on the

Act as it read before the amendments. Where we draw on the amended language

for purposes of comparison or discussion, we make that clear. However, we note

that the 1996 amendments did not materially affect most of the provisions that we

rely upon in this brief.

2Section 603(f) of the FCRA, 15 U.S.C. § 1681a(f), defines “consumer

reporting agency” to include:

[A]ny person which, for monetary fees, dues, or on a cooperative nonprofit

basis, regularly engages in whole or in part in the practice of assembling or

evaluating consumer credit information or other information on consumers

for the purpose of furnishing consumer reports to third parties, and which

uses any means or facility of interstate commerce for the purpose of

preparing or furnishing consumer reports.

3

STATEMENT OF THE CASE

Section 607(b) of the FCRA, 15 U.S.C. § 1681e(b), requires consumer

reporting agencies to “follow reasonable procedures” in preparing consumer

reports “to assure maximum possible accuracy of the information concerning the

individual about whom the report relates.”1 Defendant-Appellee, Rental Research

Services, Inc. (“Rental Research”), is a consumer reporting agency that provides

information about prospective tenants to subscribing landlords.2 The information

that Rental Research sells comes from multiple data bases, including housing court

records and credit reports from TRW Inc., which, like Equifax and Trans Union

Corporation, is a national consumer reporting agency that serves as a repository for
3After this law suit was filed, TRW Inc. sold its consumer reporting business

to Experian Information Solutions, Inc.

4

credit information.3 Thus, TRW sells information to “resellers” like Rental

Research, which then include the information in reports to such end users as

mortgage companies, banks, and landlords. See FTC Commentary on the FCRA §

604 (“FTC Commentary”), 55 Fed. Reg. 18817 (1990), 16 C.F.R. Part 600 App.,

Section 604-General.

In February 1996, Plaintiff-Appellant, Deborah Wilson, applied for an

apartment rental, and the landlord paid Rental Research to prepare a consumer

report on Ms. Wilson. 165 F.3d at 643. Based on public records of the housing

courts for Minneapolis and St. Paul, Rental Research issued a report that identified

twelve “possible” unlawful detainer actions against people with the names Debra

Wilson or Deborah Wilson. Id. All twelve detainer actions had been filed in a

period of less than three years. Two had been filed on the same day in different

counties and two others had been filed within two weeks of each other in different

counties. Id. Rental Research included a disclaimer, warning the landlord that it

based its report on Ms. Wilson on a name review of public records. Rental

Research thus alerted the landlord that the reported information might not pertain to

Ms. Wilson, the intended subject of the report, and it asked the landlord to
5

“telephone” Rental Research if the landlord was able to verify that any of the

information in the report on Ms. Wilson actually pertained to her. Finally, the

report listed additional items of adverse information about Ms. Wilson that Rental

Research had obtained from TRW and that Ms. Wilson subsequently disputed.

Acting on Rental Research’s report, the landlord denied Ms. Wilson’s rental

application. She then requested and obtained a copy of the report from Rental

Research, and she subsequently advised Rental Research that ten of the detainer

actions were not hers. She also complained of errors in the TRW-provided section

of the report. Id. Rental Research responded by deleting the disputed detainer

references, but it declined to reinvestigate the information that TRW provided,

advising Ms. Wilson that she must contact TRW directly. Id.

Ms. Wilson then filed the present action. Among other things, she claims

that Rental Research violated its statutory duty to follow reasonable procedures to

assure maximum possible accuracy in its report on Ms. Wilson; and that Rental

Research also violated its statutory duty under pre-1996 Section 611(a) of the

FCRA to reinvestigate the alleged errors in the information that Rental Research

had received from TRW and included in the report that it sold to Ms. Wilson’s

prospective landlord. The district court granted Rental Research summary

judgment against Ms. Wilson. A divided panel of this Court reversed in part and
6

affirmed in part the district court’s decision. Wilson v. Rental Research Services,

Inc., 165 F.3d 642 (8th Cir. 1999).

Undertaking a de novo review of the record (165 F.3d at 646), the panel

majority held that there was a triable issue whether Rental Research, by reporting all

the detainer actions, breached its statutory duty to follow reasonable procedures to

assure maximum possible accuracy as to the information it reported about Ms.

Wilson. 165 F.3d at 647. Citing the purpose, history, and goals of the FCRA, the

panel majority found that “Rental Research’s practices . . . will lead to inaccuracies

any time there is another person in the housing court database with a name similar

to that of the subject of the report.” 165 F.3d at 646. It concluded that “Rental

Research’s practices are not fair and equitable to the consumer, and its assertion

that it fulfilled its obligations under the FCRA is contrary to both the purpose of the

statute and the weight of authority interpreting it.” 165 F.3d at 644. The panel

majority noted that “[h]ere, the report produced by Rental Research, although an

accurate reflection of the housing court records, was not maximally accurate in any

sense with regard to Wilson, the individual who was the subject of the report, as

required by § 1681e(b).” Id. at 645. Citing Koropoulos v. Credit Bureau, Inc.,

734 F.2d 37 (D.C. Cir. 1984), the panel majority rejected Rental Research’s

argument that it had satisfied its statutory obligation by issuing a report that
7

contained housing court information, passed on without any alteration, coupled

with a disclaimer that the reported information might not pertain to the subject of

the report. The majority said: 

We join the strong majority of courts since the Koropoulos decision in

rejecting the “technical accuracy” defense in favor of a thorough examination

of whether the report was maximally accurate with respect to the individual

who is the subject of the report.

165 F.3d at 645 n.3. The panel majority concluded that Ms. Wilson’s claim that

Rental Research had not used reasonable procedures to ensure the maximum

possible accuracy should be considered by a jury:

In the instant case, the information contained in Wilson’s report was, on its

face, enough to alert Rental Research that something was amiss. The report

listed a total of twelve unlawful detainers in a period of less than three years,

two of which were filed on the same day in different counties, and another

two of which were filed less than two weeks apart in different counties. 

165 F.3d at 647.

The panel, however, also held that Rental Research was not required by pre1996 Section 611 to reinvestigate the items in the TRW portion of the report that

Ms. Wilson disputed. 165 F.3d at 648. The panel declared that “under the

statute
8

at the time of the dispute, Rental Research was not the consumer reporting

agency obligated to reinvestigate TRW’s information.” Id. (emphasis added).

Rental Research filed a timely petition for rehearing and suggestion for

rehearing en banc. On July 16, 1999, this Court vacated the panel’s decision and

agreed to consider the matter en banc. Argument has been set for September 13,

1999.

SUMMARY OF ARGUMENT

Section 607(b) of the FCRA imposes a clear and unequivocal duty on

consumer reporting agencies to prepare consumer reports by using “reasonable

procedures to assure maximum possible accuracy of the information concerning

the individual about whom the report relates.” 15 U.S.C. § 1681e(b). Here, the

undisputed facts show that Rental Research is a consumer reporting agency and

employs methods that make inaccurate reports inevitable as to a large class of

consumers -- those who have the misfortune of having a name similar to someone

who has been the subject of housing court reports of unlawful detainer actions. 

Such wholesale inaccuracies were apparent on the face of Rental Research’s report

on Ms. Wilson and Rental Research therefore plainly had notice that its report was

not accurate as to Ms. Wilson. Accordingly, Rental Research’s procedures are

likely unreasonable even when they happen to produce an accurate report. In
9

simply searching public record databases and listing unlawful detainer actions

against anyone with a name similar to the subject of the report, Rental Research

casts such a broad net that it inevitably catches inaccurate information and it has no

apparent method of sorting out those inaccuracies. Given the purpose, policy, and

structure of the FCRA, a consumer reporting agency violates Section 607(b) when

its procedures result in consumer reports that systematically contain information

that cannot possibly pertain to the subject of the report. Ms. Wilson has made a

prima facie case showing a violation of the FCRA. At a minimum, she has

established the existence of a disputed issue of material fact regarding the

reasonableness of Rental Research’s procedures.

The panel’s (and lower court’s) holding that pre-1996 Section 611 imposed

no duty on Rental Research to reinvestigate disputed information that it obtained

from TRW is contrary to the plain language of the FCRA. That language requires

consumer reporting agencies to “reinvestigate” disputed information when a

consumer “directly” notifies the agency of a dispute. Rental Research is a

consumer reporting agency within the meaning of the FCRA, and Ms. Wilson

directly reported to Rental Research that she disputed information in the TRWsupplied portion of Rental Research’s report on her. Rental Research was

therefore obligated to reinvestigate Ms. Wilson’s claim. Moreover, the 1996
10

amendments did not materially change the statutory language that sets out the basic

duty to reinvestigate disputed information. Thus, the panel’s position, if adopted

by the Court en banc, could impair the future enforcement of the amended FCRA.

ARGUMENT

A. Rental Research Is Not Entitled to Judgment as a Matter of

Law Concerning Ms. Wilson’s Claim That It Failed to Follow

Reasonable Procedures.

Section 607 requires a consumer reporting agency to employ reasonable

procedures in preparing consumer reports to assure that the information about the

subject of the reports is accurate to the maximum extent possible. Cases arising

under Section 607 thus present two questions: (1) whether the information about

the consumer is accurate to the maximum extent possible; and (2) whether the

consumer reporting agency used reasonable procedures in collecting and reporting

the information. We treat each of these two questions separately below.

1. Rental Research’s Reports Are Not Accurate as to the

Subject of the Report.

Rental Research points out that its report on Ms. Wilson correctly copied

information contained in the housing court records and its disclaimer put the user

on notice that the court records might not actually pertain to Ms. Wilson. Based on

this “technical accuracy” of the report, the lower court refused to find a violation of
11

Section 607. The panel, however, was right: the FCRA imposes a higher standard

of accuracy on consumer reporting agencies than the district court has applied

here. The FCRA expresses Congress’ awareness that consumer reports play a

vital role in the economy and that “[a]n elaborate mechanism has been developed

for investigating and evaluating the credit worthiness, credit standing, credit

capacity, character, and general reputation of consumers.” 15 U.S.C. § 1681(a)(2). 

The Act thus recognizes the “‘needs of commerce’ for accurate credit reporting.” 

Cahlin v. General Motors Acceptance Corp., 936 F.2d 1151, 1158 (11th Cir.

1991); see 15 U.S.C. § 1681, et seq. The Act also recognizes the serious harm that

can befall consumers who are the subject of inaccurate adverse credit reports. Id.

Those serious consequences are evident in this case. As the panel majority

commented:

The importance of housing and the nature of the rental housing market

intensify the damage done to consumers who are the victims of an inaccurate

report. Because landlords need to fill units promptly, by the time a tenant

screening report is corrected, the unit is often rented. Landlords have little

incentive to verify “possible” negative information, since they have the option

of simply choosing another prospective tenant who has no negative

information. This is particularly true in metropolitan areas such as the Twin

Cities where vacancy rates are approximately one to two percent.

165 F.3d at 646. The record here shows that for a $15 fee, Rental Research

provides reports that landlords can use to evaluate applicants. These reports often
12

indicate, incorrectly, that the subjects of the report have been listed in housing court

records. See id. at 643. As the panel majority observed:

Wilson and others like her, particularly those with common names, face a

potentially costly delay in obtaining housing when they are unfairly taken out

of consideration for an apartment due to inaccurate information in a credit

report. Not only must they find housing for themselves and their families

during the delay, they may also lose multiple application fees when landlords

deny their applications based on the incorrect report generated by Rental

Research.

Id. at 647.

Congress enacted the FCRA to address its “concern over abuses in the

credit reporting industry.” Guimond v. Trans Union Info. Corp., 45 F.3d 1329,

1333 (9th Cir. 1995). As several courts have noted, “[t]he legislative history of the

FCRA reveals that it was crafted to protect consumers from the transmission of

inaccurate information about them” in a consumer report. Id., citing Kates v.

Crocker Nat’l Bank, 776 F.2d 1396, 1397 (9th Cir. 1985); see also Pinner v.

Schmidt, 805 F.2d 1258, 1261 (5th Cir. 1986), cert. denied, 483 U.S. 1022 (1987);

see Millstone v. O’Hanlon Reports, 383 F. Supp. 269, 275 (E.D. Mo. 1974)

(consumer reporting agency’s methods “were so slipshod and slovenly as to not

even approach the realm of reasonable standards of care as imposed by the

statute”), aff’d, 528 F.2d 829 (8th Cir. 1976). To accomplish this goal, Congress
4As originally drafted, Section 607 required consumer reporting agencies to

adopt “reasonable procedures” only when preparing investigative consumer

reports, which are consumer reports that are based on personal interviews with a

consumer’s neighbors, friends, or associates. Before final passage of the Act, the

Section was enlarged to cover all consumer reports. See Bryant v. TRW, 689 F.2d

72, 78 (6th Cir. 1982), quoting the remarks of Senator Proxmire in introducing the

conference report on the bill, 116 Cong. Rec. 35940 (1970).

13

has created a comprehensive mechanism to protect consumers from abuses by

consumer reporting agencies.

First, it has adopted a prophylactic strategy of putting reasonable procedures

in place to minimize the risk that inaccurate information will appear in a person’s

consumer report when it is initially prepared. Section 607(b) of the Act requires:

Whenever a consumer reporting agency prepares a consumer report it shall

follow reasonable procedure to assure maximum possible accuracy of the

information concerning the individual about whom the report relates.

15 U.S.C. § 1681e(b). Congress designed that Section to protect consumers from

the harm and burden of having to fight about inaccurate credit reports after-thefact.4

Second, Congress also granted consumers additional protections that enable

them to compel the correction of those inaccurate reports that get through the

screen that Section 607(b) imposes. The FCRA enables consumers to discover

and challenge the contents of their credit files. 15 U.S.C. §§ 1681g, 1681h (current
14

version at 15 U.S.C. §§ 1681g, 1681h (Supp. II, 1996)). It also imposes on credit

reporting agencies an affirmative obligation to reinvestigate the information in their

reports, when that information is challenged by the subject of the report. See 15

U.S.C. § 1681i (current version at 15 U.S.C. § 1681i (Supp. II 1996)). 

Significantly, both pre-amendment and amended Section 611(a) expressly require

consumer reporting agencies to delete from consumers’ files all information that

cannot be verified on reinvestigation. 15 U.S.C. § 1681i (current version at 15

U.S.C. § 1681i(a)(5)(A)(Supp. II 1996)).

Third, the Act creates incentives for consumer reporting agencies to comply

with its provisions. The Act allows consumers to recover actual damages and

attorneys’ fees whenever a reporting agency negligently violates the Act (15 U.S.C.

§ 1681o) and to recover punitive damages whenever an agency wilfully violates the

Act (15 U.S.C. § 1681n).

To the extent that Rental Research argues that it should be let off the hook

because its report was “technically accurate” in that it simply reproduced housing

court information and it gave a disclaimer, its argument is deficient as a matter of

law. E.g., Koropoulos, 734 F.2d at 42; Bryant, 689 F.2d at 77. Rental

Research’s argument is not supported by either the purpose, the language, or the
5

Indeed, no court of appeals has ever embraced that “defense.” As the panel

majority here commented, the “technical accuracy” defense was “initially accepted

by a few district courts.” 165 F.3d at 645 n.3, citing Todd v. Associated Credit

Bureau Servs., Inc., 451 F. Supp. 447, 449 (E.D. Pa. 1977), aff’d mem., 578 F.2d

1376 (3rd Cir. 1978), cert. denied, 439 U.S. 1068 (1979). However, as the panel

majority also stated, that “defense was then ‘universally criticized by commentators

for taking an unjustifiably narrow view of ‘maximum accuracy.’’” 165 F.3d at 645 

n.3, quoting Koropoulos, 734 F.2d at 41 n.7. Indeed, it seems questionable that

Todd would even be decided the same way today, given the Third Circuit’s more

recent treatment of the issue. See Philbin v. Trans Union Corp., 101 F.3d 957,

965-66 (3d Cir. 1996).

15

structure of the FCRA.5 Because Congress enacted the FCRA to protect

consumers from abuses by the credit reporting industry, it would be inconsistent

with the purpose of the Act to allow a consumer reporting agency to shield sloppy

or incomplete reports with a mere disclaimer warning the recipients that the

information in the report may not be solid. If the purpose of the Act is to require

accurate consumer reports, that purpose is not served by the type of inaccurate

reporting that Rental Research has engaged in here. 

The statute’s language and structure foreclose the result that Rental Research

seeks here. Section 607 demands the “maximum possible accuracy of the

information concerning the individual about whom the report relates” (emphasis

added). As the panel majority correctly observed, the emphasized language

requires that the “accuracy” of a consumer report be judged with respect to the
16

person who is the subject of the report. 165 F.3d at 644-45. A report about

somebody else cannot, by definition, be accurate as to the person “about whom

the report relates.” Nor can it be made accurate by the simple expedient of warning

that the report may not be about the person who is the subject of the report. Such

reasoning could be used to excuse the inclusion of any derogatory information in a

consumer report on the strength of a disclaimer that such information “might not”

pertain to the subject of the report. Such a cavalier approach to report accuracy is

flatly at odds with the statutory goal of assuring “maximum possible accuracy” in

such reports. 

As the panel majority further recognized, adoption of the “technical

accuracy” standard advocated by Rental Research would subject consumers to

adverse and arbitrary consequences, on the basis of information that does not

pertain to them. 165 F.3d at 645. Regardless of whether reports containing such

information would literally “mislead” landlords (cf. dissenting opinion, 165 F.3d at

650), they would nevertheless lead to harmful results, by prompting landlords (at

least those able to choose among multiple applicants) to turn down rental

applications on the basis of the possibility that the reported adverse information

actually pertains to the subject of a report. It is no answer to point out that a

consumer denied housing (or credit) in this manner could seek correction of his
17

report. The very structure of the statute, as described above, is based on

Congress’s understanding that such harms may be effectively irremediable, and

therefore that consumer files must be as accurate as is reasonably possible at each

and every stage – from their initial creation by a consumer reporting agency

through their continual updating as additional information is received, or revised, or

supplementary reports are prepared. As the Fifth Circuit has commented, the duty

under Section 607(b) “extends to updating procedures, because ‘preparation’ of a

consumer report should be viewed as a continuing process and the obligation to

insure accuracy arises with every addition of information.” Thompson v. San
6

In Thompson, the court held that it could not “conclude that the district

court was clearly erroneous” in finding negligence when the consumer reporting

agency “had no way of knowing if the information supplied by the subscriber was

correct.” 682 F.2d at 513. By comparison, the defendant here had no way of

knowing if the information supplied by the court database even pertained to the

subject of the report. In this regard, we thus agree with the panel majority’s view

that there is no conflict between its decision and the decision in Henson v. CSC

Credit Services, 29 F.3d 280 (7th Cir. 1994). That case involved a consumer

reporting agency’s reliance on a single court record that mistakenly reported a

money judgment against the plaintiff. As the panel majority here commented:

The Henson court was faced with a singular clerical error, not the core

practice at issue in this case, which is Rental Research’s practice of

including all records corresponding to permutations of a certain name

without verifying that they pertain to the individual who is the subject of the

report.

165 F.3d at 645.

18

 Antonio Retail Merchants Ass’n., 682 F.2d 509, 513 (5th Cir. 1982).6 The FCRA

does not sanction the result that Rental Research seeks here.

Given the purpose of the FCRA and the statutory provisions that give effect

to that purpose, “section 607(b) requires a consumer reporting agency to do more

than correctly report the information supplied to it by creditors.” Bryant v. TRW,

Inc., 689 F.2d at 77. A consumer reporting agency may not satisfy its statutory

obligation to report accurate information by merely reporting information that is

“technically” accurate, however misleading. As the District of Columbia Circuit

has held, “Congress did not limit the Act’s mandate to reasonable procedures to
19

assure only technical accuracy.” Koropoulos, 734 F.2d at 40. The panel majority

was correct in adopting this view. 165 F.3d at 645 n.3; see also Cushman v. Trans

Union Corp., 115 F.3d 220 (3rd Cir. 1997); Cahlin, 936 F.2d at 1156-57.

2. Rental Research’s Procedures Do Not Appear to Be at All

Reasonable.

The essential inquiry under Section 607(b) is whether the consumer reporting

agency used “reasonable procedures” to achieve the statutory goals of ensuring

accuracy “to the maximum extent possible.” As the panel majority recognized, this

is necessarily a factual inquiry, turning on the circumstances presented in individual

cases.

The FTC Commentary on the FCRA offers guidance to the industry by

articulating the following standard of reasonable procedures:

The section [607(b)] does not require error free consumer reports. If a

consumer reporting agency accurately transcribes, stores and communicates

consumer information received from a source that it reasonably believes to

be reputable, and which is credible on its face, the agency does not violate

this section simply by reporting an item of information that turns out to be

inaccurate. However, when a consumer reporting agency learns or should

reasonably be aware of errors in its reports that may indicate systematic

problems . . . it must review its procedures for assuring accuracy.
7Except in cases where there is either a failure of proof by the plaintiff or the

absence of a cognizable defense by the defendant, the question of

“reasonableness” is inherently one for a “trier of fact,” and is not an appropriate

issue to be resolved on summary judgment. See Pinner, 805 F.2d at 1263 (In

action under Section 607(b), the appellate court’s “assigned role is neither to re-try

the case de novo nor to supplant the jury verdict so long as it is supported by

substantial evidence.”); Hauser v. Equifax, 602 F.2d 811, 814 (8th Cir. 1979)

(discussing standards for a directed verdict).

20

16 C.F.R. Part 600 App. (emphasis added). A consumer reporting agency initially

satisfies its obligations if it relies upon a source that “is credible on its face.” 

However, once an agency knows (or should know) that it is systematically

producing inaccurate reports, it must take some action to rectify that situation. As

the Bryant court indicated, the agency may not simply rely on its ability to report

verbatim information that it obtains from others. 689 F.2d at 77.

In assessing the reasonableness of a consumer reporting agency’s actions,

courts have attempted to strike a balance between the harm to injured consumers

and the cost of developing accurate reports.7 As the District of Columbia stated in

a companion case to Koropoulos:

“The standard of conduct by which the trier of fact must judge the adequacy

of [consumer reporting] agency procedures is what a reasonably prudent

person would do under the circumstances.” . . . Judging the reasonableness

of an agency’s procedures involves weighing the potential harm from

inaccuracy against the burden of safeguarding against such inaccuracy.
8Some Circuits have gone further than Stewart by allowing a plaintiff to rest

his or her case upon a mere showing of inaccuracy. For example, the Ninth Circuit

has written that “a consumer must present evidence tending to show that a credit

reporting agency prepared a report containing inaccurate information” (Guimond,

45 F.3d at 1333) and held that the plaintiff there “made out a prima facie case under

§ 1681e(b) by showing that there were inaccuracies in her credit report.” Id. at

1334. Both the Ninth and the Eleventh Circuits have employed nearly identical

language to observe that “an agency can escape liability if it establishes that an

inaccurate report was generated despite the agency’s following reasonable

procedures.” Guimond, 45 F.3d at 1333; compare Cahlin, 936 F.2d at 1156. In

surveying the decisional law, without taking a final position on the issue, the Third

Circuit has commented that the decisions of the Ninth and the Eleventh Circuits can

be read in either of two ways: (1) to shift the burden of proof to the defendant

whenever a plaintiff shows that the agency prepared an inaccurate report; or (2)

more reasonably, to allow a jury to “infer from the inaccuracy that the defendant

failed to follow reasonable procedures.” Philbin, 101 F.3d at 965.

21

Stewart v. Credit Bureau, Inc., 734 F.2d 47, 51 (D.C. Cir. 1984) (per curiam). 

The D.C. Circuit has thus held that “a plaintiff cannot rest on a showing of mere

inaccuracy, shifting to the defendant the burden of proof on the reasonableness of

procedures for ensuring accuracy . . . a plaintiff must minimally present some

evidence from which a trier of fact can infer that the consumer reporting agency

failed to follow reasonable procedures in preparing a credit report.” Stewart, 734

F.2d at 51. The Stewart court further commented, however, that “[i]n certain

instances, inaccurate credit reports by themselves can fairly be read as evidencing

unreasonable procedures, and . . . in such instances plaintiff’s failure to present

direct evidence will not be fatal to his claim.” Id. at 52.8 
22

While this Court has not spoken to the issue directly, its decisions appear to

take the same general approach as that of the D.C. Circuit in Stewart. See Hauser,

602 F.2d at 814-15 (“There must be a showing that the inaccuracy resulted from

the agency’s failure to follow ‘reasonable procedures to assure maximum possible

accuracy’”). Indeed, that Circuit in Stewart drew on case law from this Circuit as

further support for its conclusion that “[i]n certain instances, inaccurate credit

reports by themselves can fairly be read as evidencing unreasonable procedures,

and . . . in such instances plaintiff’s failure to present direct evidence will not be

fatal to his claim.” 734 F.2d at 52, citing, inter alia, Millstone v. O’Hanlow

Reports, Inc., 383 F. Supp. 269, 275 (“egregiousness of report’s inaccuracy was

evidence of ‘willful non-compliance’ with section 1681e(b)”), aff’d, 528 F.2d 829

(8th Cir. 1976). Under these decisions, there is no room for Rental Research’s

argument that it followed reasonable procedures as a matter of law. 

As the panel majority correctly observed, “Rental Research’s practices . . .

will lead to inaccuracies any time there is another person in the housing court

database with a name similar to that of the subject of the report.” 165 F.3d at 646. 

Rental Research issued a report that purported to be about Ms. Wilson. Yet, that

report contained information that, on its face, could not possibly have related to

Ms. Wilson, even though Section 607(b) expressly requires that the information
23

about the subject of the report must be as accurate as is reasonably possible. That

Rental Research was aware of this deficiency in its report is made manifest by its

“disclaimer,” which not only warned the landlord that the report “about” Ms.

Wilson might not actually be about her at all; but it also asked the landlord to let

Rental Research know if the landlord was able to verify any of the information as

actually pertaining to Ms. Wilson.

The record here suggests that Rental Research has not established any

procedures, much less reasonable ones, to ensure the accuracy of its reports. Its

disclaimer is tantamount to an admission that it does not take any steps to ensure

accuracy, much less maximum possible accuracy. At a minimum, this raises a

factual question about whether its procedures were reasonably designed to “assure

maximum possible accuracy of the information concerning the individual about

whom the report relates.” 15 U.S.C. § 1681e(b).

To the extent that Rental Research argues that a more accurate report would

be too expensive to prepare, we submit that this is a factual question for a jury. 

For example, the record here shows that Rental Research obtained a consumer

report about Ms. Wilson from TRW. Presumably that report (or other sources

readily available to Rental Research) included Ms. Wilson’s recent addresses. 

Perhaps a jury would find that Rental Research could have, at very little or no cost,
24

at least omitted the detainer records that did not correspond to any of Ms.

Wilson’s known addresses. As the panel majority stated, whether the agency

followed reasonable procedures “will be a jury question in the overwhelming

majority of cases.” 165 F.3d at 646, quoting Cahlin, 936 F.2d at 1156; Guimond,

45 F.3d at 1333. This is clearly such a case.

B. The Pre-1996 Version of the FCRA Required Rental Research

to Reinvestigate the Asserted Inaccuracies In the Report It

Obtained From TRW.

While the panel correctly resolved the issues regarding plaintiff’s claim under

Section 607(b), it erred in holding that Rental Research was not obliged to

reinvestigate the disputed information that TRW provided. This holding conflicts

with the plain language of Section 611(a), which, in both its pre- and post-amended

versions, requires a consumer reporting agency to whom a consumer complained

to reinvestigate disputed information.
9While it was renumbered from Section 611(a) to Section 611(a)(1)(A) in the

amendments, the language remained essentially the same. The amended language

provides, in relevant part, as follows:

If the completeness or accuracy of any item of information contained in a

consumer’s file at a consumer reporting agency is disputed by the consumer

and the consumer notifies the agency directly of such dispute, the agency

shall reinvestigate free of charge and record the current status of the disputed

information, or delete the item from the file . . .

(emphasis added).

10The panel also observed that, when a consumer reporting agency is “asked

to reinvestigate by an individual about whom they have issued a report, such as

Rental Research was asked by Wilson in this case,” the 1996 amendments require

it to “provide notification of the dispute to any person who provided any item of

information in dispute.” 165 F.3d at 648.

25

Pre-amendment Section 611(a) provided, in part:9

If the completeness or accuracy of any item of information contained

in his file is disputed by a consumer, and such dispute is directly

conveyed to the consumer reporting agency by the consumer, the

consumer reporting agency shall within a reasonable period of time

reinvestigate and record the current status of that information unless it

has reasonable grounds to believe that the dispute by the consumer is

frivolous or irrelevant.

(emphasis added). The statute plainly requires a consumer reporting agency to

reinvestigate disputed information when a consumer directly conveys a dispute to

the agency.

The panel expressly recognized Rental Research’s status as a consumer

reporting agency.10 165 F.3d at 643; see n.2, supra. Also, Ms. Wilson made her
11Section 623, 15 U.S.C. 1681s-2 (Supp. II 1996), applies to creditors and

other entities that furnish information to consumer reporting agencies. Section

623(b) requires these furnishers, when they receive a notice of dispute from a

reseller, such as Rental Research, to investigate the disputed information just as

they would do if they received a notice of a dispute from one of the three national

credit repositories – Equifax, Experian, or Trans Union – and report the results of

the investigation to the reseller.

26

objections known directly to Rental Research. The panel nevertheless held that

under the pre-amendment FCRA “Rental Research was not the consumer

reporting agency obligated to reinvestigate TRW’s information.” Id. at 648

(emphasis added). However, Rental Research was the consumer reporting agency

that produced Ms. Wilson’s consumer report. Once Ms. Wilson contacted Rental

Research directly, the FCRA made it the consumer reporting agency responsible

for conducting the reinvestigation.11 Thus, the plain language of the pre-amended

FCRA required Rental Research to conduct a reinvestigation. It refused to do so,

and it therefore violated the Act.

In reaching a contrary conclusion, the panel relied on a provision of the 1996

FCRA amendments that elaborates on the obligations of consumer reporting

agencies respecting disputed information. That new section specifically obligates

the agency to “provide notification of the dispute to any person who provided any

item of information in dispute.” 15 U.S.C. § 1681i(a)(2)(A); see 165 F.3d at 648. 
27

While this addition to the statute indeed provides specific direction as to the steps a

consumer reporting agency must now take when faced with the sort of situation

Rental Research faced in the present case, this directive is subsidiary to the basic

statutory requirement that was already contained in the statute, and which was

unchanged by the 1996 amendments – i.e., the requirement that “the consumer

reporting agency” to which the consumer disputes an item of information “shall * *

* reinvestigate * * * .” 15 U.S.C. § 1681i(a) (1994); compare 15 U.S.C.

§ 1681i(a)(1)(A) (pertinent language unchanged). In other words, although the 1996

amendment provides important guidance as to how a consumer reporting agency in

Rental Research’s position must conduct its reinvestigation, it does not alter the

requirement that the agency conduct a reinvestigation. The panel’s holding that

Rental Research had no duty to reinvestigate under the pre-amendment FCRA is

squarely contrary to the statutory obligations expressly placed on any consumer

reporting agency that issues a consumer report regarding a consumer, maintains a

file on the consumer, and subsequently receives a notification from the consumer

disputing one or more items in the report.
28

CONCLUSION

For the above-stated reasons, the district court’s decision granting summary

judgment in favor of Rental Research should be reversed, and the case should be

remanded for trial.

Respectfully submitted,

Deborah A. Valentine

General Counsel

David Medine John F. Daly

Associate Director for Financial Practices Assistant General Counsel

Thomas E. Kane David C. Shonka

Attorney Attorney

Bureau of Consumer Protection Federal Trade Commission

Federal Trade Commission 6

th St. and Penn. Ave., N.W.

Washington, D.C. 20580 Washington, D.C. 20580

202-326-2436
CERTIFICATE OF COMPLIANCE

I certify that this brief complies with Fed. R. App. P. 29(b) and 31(a)(7)(B). It

contains 6383 words.

CERTIFICATE OF SERVICE

I hereby certify that on August 12, 1999, I served two copies of the Brief on

Rehearing En Banc of the Federal Trade Commission on:

Timothy L Thompson

Legal Aid Society

430 First Avenue, N.

Suite 300

Minneapolis, MN 55401-1780; and 

Robert P. Thavis

Leonard, Street and Deinard

150 South Fifth Street

Suite 2300

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by causing them to be delivered to each by overnight courier. 

________________________

David C. Shonka

Attorney for Amicus Curiae

Federal Trade Commission