Nos. 06-84 and 06-100 

In the Supreme Court of the United States

SAFECO INSURANCE COMPANY

OF AMERICA, ET AL., PETITIONERS

v. 

CHARLES BURR, ET AL.

GEICO GENERAL INSURANCE COMPANY, ET AL.,

PETITIONERS

v. 

AJENE EDO 

ON WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BRIEF FOR THE UNITED STATES

AS AMICUS CURIAE IN SUPPORT OF VACATUR IN

NO. 06-84 AND REVERSAL IN NO. 06-100

PAUL D. CLEMENT 

WILLIAM BLUMENTHAL Solicitor General 

General Counsel Counsel of Record 

THOMAS G. HUNGAR JOHN F. DALY 

Deputy General Counsel for Deputy Solicitor General

Litigation PATRICIA A. MILLETT

LAWRENCE DEMILLE-WAGMAN Assistant to the Solicitor

Attorney General

Federal Trade Commission Department of Justice

Washington, D.C. 20580 Washington, D.C. 20530-0001 

(202) 514-2217 
QUESTIONS PRESENTED 

The Fair Credit Reporting Act, 15 U.S.C. 1681 et 

seq., imposes civil liability on “[a]ny person who willfully 

fails to comply with any requirement imposed under this 

subchapter with respect to any consumer,” 15 U.S.C. 

1681n(a). The Act further requires a person who “takes 

any adverse action with respect to any consumer that is 

based in whole or in part on any information contained 

in a consumer report” to provide the consumer with 

notice of the action. 15 U.S.C. 1681m(a). The questions 

presented are: 

1. Whether the phrase “willfully fails to comply” 

with the FCRA’s requirements encompasses not only 

knowing violations of the Act, but also reckless 

disregard of the law’s obligations and, if so, whether the 

court of appeals erred in articulating and applying the 

reckless-disregard standard. 

2. Whether charging an insurance customer a 

higher rate based, in whole or in part, on his credit 

report constitutes an “adverse action,” notwithstanding 

the fact that the insured would have received the same 

rate even if no consumer report had been consulted. 

(I)
TABLE OF CONTENTS 

Page 

Interest of the United States ............................ 1

Statement ............................................ 1

Summary of argument ................................. 6

I. A “willful” failure to comply with the requirements of

the FCRA requires proof that the defendant either

knowingly or recklessly disregarded the law ......... 8

A. “Willfully” is traditionally interpreted in civil

statutes, particularly laws designed to enforce

federal rights, to mean either knowing or

reckless disregard of legal obligations ........... 9

B. The structure of the Fair Credit Reporting Act

demonstrates that “willfully” includes both

knowing and reckless disregard of the law ....... 13

C. Reckless disregard requires indifference to

clearly established law or the disregard of an

obvious and high probability that conduct is

unlawful .................................... 20

II. An adverse action notice is required when the content

of a consumer’s credit report prevented the consumer

from obtaining a better insurance rate ............. 24

A. Providing a higher insurance rate based, in

part, on a credit report constitutes an adverse

action ...................................... 24

B. GEICO’s erroneous understanding of the 

adverse action provision was not willful ......... 29

Conclusion .......................................... 30

Appendix ........................................... 1a

(III) 
IV 

TABLE OF AUTHORITIES 

Page 

Cases: 

A.J. McNulty & Co. v. Secretary of Labor, 283 F.3d

328 (D.C. Cir. 2002) ............................. 11

Aimster Copyright Litigation, In re, 334 F.3d 643 

(7th Cir. 2003) .................................. 11

Armenta v. City of Casa Grande, 71 P.3d 359 (Ariz.

Ct. App. 2003) .................................. 18

Asbury v. Brougham, 866 F.2d 1276 (10th Cir. 1989) . . . 19

Barbour v. Merrill, 48 F.3d 1270 (D.C. Cir. 1995),

cert. dismissed, 516 U.S. 1155 (1996) ............... 19

Barry v. Edmunds, 116 U.S. 550 (1886) .............. 21

Baystate Alternative Staffing, Inc. v. Herman,

163 F.3d 668 (1st Cir. 1998) ....................... 10

Bevolo v. Carter, 447 F.3d 979 (7th Cir. 2006) .......... 19

Brock v. Morello Bros. Constr., Inc., 809 F.2d 161

(1987) ...................................... 11, 22

Bryan v. United States, 317 U.S. 184 (1998) ....... 8, 9, 15

Casella v. Equifax Credit Info. Servs., 56 F.3d 469 

(2d Cir. 1995), cert. denied, 517 U.S. 1150 (1996) ..... 19

Cooper v. Rosston, 756 P.2d 1125 (Mont. 1988) ......... 18

Cornist v. B.J.T. Auto Sales, Inc., 272 F.3d 322

(6th Cir. 2001) .................................. 26

Cushman v. Trans Union Corp., 115 F.3d 220 

(3d Cir. 1997) ................................. 6, 19

Dixon v. United States, 126 S. Ct. 2437 (2006) ......... 12

Doe v. Chao, 540 U.S. 614 (2004) ..................... 13

Dun & Bradstreet, Inc. v. Greenmoss Builders, Inc.,

472 U.S. 749 (1985) .............................. 17
V

Cases–Continued: Page 

Farmer v. Brennan, 511 U.S. 825 (1994) ..... 17, 20, 21, 22

Fischl v. General Motors Acceptance Corp.,

708 F.2d 143 (5th Cir. 1983) ...................... 19

Gertz v. Robert Welch, Inc., 418 U.S. 323 (1974) ........ 19

Hanger v. Lake County, 390 F.3d 579 (8th Cir. 2004) . . . 11

Harlow v. Fitzgerald, 457 U.S. 800 (1982) ............. 23

Harte-Hanks Commc’ns, Inc. v. Connaughton,

491 U.S. 657 (1989) .............................. 21

Hazen Paper Co. v. Biggins, 507 U.S. 604 (1993) .... 10, 16

Hillstrom v. Best Western TLC Hotel, 354 F.3d 27 

(1st Cir. 2003) .................................. 11

Island Software & Computer Serv., Inc. v. Microsoft

Corp., 413 F.3d 257 (2d Cir. 2005) ................. 11

Kolstad v. American Dental Ass’n, 527 U.S. 526 

(1999) ...................................... 11, 18

McKennon v. Nashville Banner Pub. Co., 513 U.S. 

352 (1995) ...................................... 27

McLaughlin v. Richland Shoe Co., 486 U.S. 128 

(1988) ........................... 9, 10, 13, 16, 20, 22

Morissette v. United States, 342 U.S. 246 (1952) ........ 10

Murphy v. Waterfront Comm’n, 378 U.S. 52 (1964) .... 15

Philbin v. Trans Union Corp., 101 F.3d 957 (3d Cir.

1996) .......................................... 28

Porter v. New York Univ. Sch. of Law, 392 F.3d 530

(2d Cir. 2004) ................................... 11

Professional Real Estate Investors, Inc. v. Columbia

Pictures Indus., Inc., 508 U.S. 49 (1993) ........... 23

Ragin v. Harry Macklowe Real Estate Co., 6 F.3d 898

(2d Cir. 1993) ................................... 19
VI

Cases–Continued: Page 

Ratzlaf v. United States, 510 U.S. 135 (1994) ........... 8

Reeves v. Carlson, 969 P.2d 252 (Kan. 1998) ........... 18

RSM, Inc. v. Herbert, No. 06-1393, 2006 WL 3026344

(4th Cir. Oct. 26, 2006) ........................... 11

Russello v. United States, 464 U.S. 16 (1983) .......... 15

Saba v. Compagnie Nationale Air France, 78 F.3d 

664 (1996) ...................................... 22

Screws v. United States, 325 U.S. 91 (1945) ............ 8

Shrader-Miller v. Miller, 855 A.2d 1139 (Me. 2004) .... 18

Simms v. Royal Thrift & Loan Co., No. E028659, 

2002 WL 32576 (Cal. Ct. App. Jan. 11, 2002) ........ 17

Smith v. Wade, 461 U.S. 30 (1983) .............. 12, 17, 23

Spies v. United States, 317 U.S. 492 (1943) ............. 8

St. Amant v. Thompson, 390 U.S. 727 (1968) .......... 21

Stephens v. South Atl. Canners, Inc., 848 F.2d 484

(4th Cir.), cert. denied, 488 U.S. 996 (1988) ......... 19

Stuart v. United States, 337 F.3d 31 (1st Cir. 2003) ..... 19

TRW Inc. v. Andrews, 534 U.S. 19 (2001) ........... 1, 27

TWA, Inc. v. Thurston, 469 U.S. 111 (1985) ....... passim

United States v. Balistrieri, 981 F.2d 916 (7th Cir.

1992), cert. denied, 510 U.S. 812 (1993) ............. 19

United States v. Bishop, 412 U.S. 346 (1973) ........... 8

United States v. Gonsalves, 435 F.3d 64 (1st Cir. 

2006) .......................................... 19

United States v. Illinois Cent. R.R., 303 U.S. 239

(1938) ....................................... 9, 22

United States v. Murdock, 290 U.S. 389 (1933),

overruled in other part, Murphy v. Waterfront

Comm’n, 378 U.S. 52 (1964) ...................... 15
VII

Cases–Continued: Page 

Welch v. Mr. Christmas Inc., 440 N.E.2d 1317 

(N.Y. 1982) ..................................... 18 

Williams Constr. Co. v. Garrison, 400 A.2d 22 

(Md. Ct. Spec. App. 1979) ......................... 18 

Williamson v. Handy Button Mach. Co., 817 F.2d 

1290 (7th Cir. 1987) ............................. 19

Wilson v. Layne, 526 U.S. 603 (1999) ................. 29

Constitution, treaty, statutes and regulations: 

U.S. Const. Amend. I .............................. 19 

Convention for the Unification of Certain Rules 

Relating to International Transportation by Air, 

opened for signature Oct. 12, 1929, art. 25(1), 

49 Stat. 3020, 137 L.N.T.S. 27 ..................... 11 

Age Discrimination in Employment Act of 1967, 

Pub. L. No. 90-202, 81 Stat. 602, 29 U.S.C. 601 

et seq. ................................. 9, 10, 12, 18 

29 U.S.C. 626(b) .............................. 10 

Americans with Disabilities Act of 1990, 42 U.S.C. 

12101 et seq. ................................. 11, 18 

Equal Credit Opportunity Act, 15 U.S.C. 1691e(b) ..... 19 

Fair Credit Reporting Act, 15 U.S.C. 1681 

et seq. .................................... passim

15 U.S.C. 1681(a) .............................. 2

15 U.S.C. 1681(a)(1) ........................ 2, 20 

15 U.S.C. 1681(a)(2) ........................... 1 

15 U.S.C. 1681(a)(4) ........................ 2, 20 

15 U.S.C. 1681(b) ........................... 2, 20

15 U.S.C. 1681a(k)(1) ......................... 25
VIII

Statutes and regulations–Continued: Page 

15 U.S.C. 1681a(k)(1)(B)(i) .............. 5, 7, 25, 27

15 U.S.C. 1681b(a) (Supp. IV 2004) .............. 26

15 U.S.C. 1681b(a)(3)(A)-(C) (Supp. IV 2004) ...... 2

15 U.S.C. 1681b(f) ......................... 13, 14

15 U.S.C. 1681g (2000 & Supp. IV 2004) ........... 2

15 U.S.C. 1681i (2000 & Supp. IV 2004) ........... 2

15 U.S.C. 1681m .............................. 3

15 U.S.C. 1681m(a) ......................... 2, 27

15 U.S.C. 1681m(h)(8) (Supp. IV 2004) ......... 1, 3

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

15 U.S.C. 1681n(a) ......................... 10, 13

15 U.S.C. 1681n(a)(1)(A) ....................... 14

15 U.S.C. 1681n(a)(1)(A)-(3) ..................... 3

15 U.S.C. 1681n(a)(1)(B) ..................... 3, 13

15 U.S.C. 1681n(b) ......................... 13, 14

15 U.S.C. 1681o (2000 & Supp. IV 2004) ..... 3, 15, 16

15 U.S.C. 1681o(a) (2000 & Supp. IV 2004) ......... 3

15 U.S.C. 1681p (Supp. IV 2004) ................. 3

15 U.S.C. 1681q .............................. 14

15 U.S.C. 1681r .............................. 14

15 U.S.C. 1681s(a)-(b) (2000 & Supp. IV) .......... 1

15 U.S.C. 1681s(a)(2)(A) ....................... 14

Fair Housing Act, 42 U.S.C. 3601 et seq. .............. 19

Fair Labor Standards Act of 1938, 29 U.S.C. 201

et seq. ...................................... 10, 12

29 U.S.C. 216(e) .............................. 10

29 U.S.C. 255(a) .............................. 10
IX

Statutes and regulations–Continued: Page 

Fair Labor Standards Amendments of 1966, Pub. L.

No. 89-601, § 601(b), 80 Stat. 844 .................. 12

Family and Medical Leave Act of 1993, 29 U.S.C. 2617 . 11

Occupational Safety and Health Act of 1970, 29 U.S.C.

666(a) ......................................... 11

11 U.S.C. 523(a)(6) ................................ 11

17 U.S.C. 504(c)(2) ................................. 11

18 U.S.C. 923(e) (Supp. IV 2004) ..................... 11

38 U.S.C. 1110 .................................... 11

42 U.S.C. 1981 .................................... 19

42 U.S.C. 1981a ................................... 18

42 U.S.C. 1981a(b)(1) .............................. 11

42 U.S.C. 1982 .................................... 19

42 U.S.C. 1983 .................................... 12

42 U.S.C. 2000e et seq. ............................. 11

Ariz. Rev. Stat. Ann. § 44-1695(c) (West 2003) ......... 18

Cal. Civ. Code (West):

§ 1785.20 (1998) .............................. 17

§ 1785.31 (Supp. 2006) ......................... 17

§ 1786.40 (Supp. 2006) ......................... 17

Kan. Stat. Ann. (1994):

§ 50-714 ..................................... 18

§ 50-715 ..................................... 18

Me. Rev. Stat. Ann. title 10 (West):

§ 1320 (Supp. 2005) ........................... 18

§ 1322 (1997) ................................. 18
X

Statutes and regulations–Continued: Page 

Md. Code Ann. Com. Law (LexisNexis):

§ 14-1212 (2005) .............................. 18

§ 14-1213 (Supp. 2006) ........................ 18

Mont. Code Ann (2005):

§ 31-3-131 ................................... 18

§ 31-3-142 ................................... 18

§ 33-18-608 .................................. 18

N.Y. Gen. Bus. Law (McKinney):

§ 380-i (1996) ................................ 18

§ 380-l (Supp. 2006) ........................... 18

16 C.F.R. Pt. 600:

Pt. 600 App. ............................... 1, 25

Pt. 698 App. H ............................... 25

Miscellaneous: 

Black’s Law Dictionary (rev. 4th ed. 1968) ............ 15

H.R. 19403, 91st Cong., 2d Sess. (1970) ............... 17

H.R. 19410, 91st Cong., 2d Sess. (1970) ............... 17

H.R. Conf. Rep. No. 1587, 91st Cong., 2d Sess. (1970) . . 16

H.R. Rep. No. 486, 103d Cong., 1st Sess. (1994) ........ 26

Letter from Hannah Stires, FTC, to James Ball

(Mar. 1, 2000) <http://www.ftc.gov/os/statutes/

fcra/ball.htm> ................................. 30

William L. Prosser, The Law of Torts (4th ed. 

1971) .................................... 16, 21, 22

Restatement (Second) of Torts (1979) ................ 18

S. 823, 91st Cong., 1st Sess. (1969) ................... 16

S. Rep. No. 517, 91st Cong., 1st Sess. (1969) ...... 1, 16, 26
XI 

Miscellaneous–Continued: 

S. Rep. No. 209, 103d Cong., 1st Sess. (1993) .......... 25

Webster’s New Int’l Dictionary (2d ed. 1958) .......... 25

Webster’s Third New Int’l Dictionary (1961) .......... 25
INTEREST OF THE UNITED STATES 

This case concerns the proper construction of the 

adverse-action and civil-liability provisions of the Fair 

Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq. 

Congress charged the Federal Trade Commission (Commission) with primary responsibility for civil enforcement of the FCRA, while vesting federal banking and 

other agencies with complementary authority over the 

Act’s application in certain specialized contexts. See 15 

U.S.C. 1681m(h)(8)(B) (Supp. IV 2004); 15 U.S.C. 

1681s(a)-(b) (2000 & Supp. IV 2004). The Commission 

has also issued formal guidance on the FCRA’s construction and implementation, see 16 C.F.R. Pt. 600 App. The 

United States accordingly has a vital interest in ensuring 

the proper interpretation and application of the FCRA’s 

provisions, and participated as amicus curiae in this 

Court’s prior FCRA case. See TRW Inc. v. Andrews, 534 

U.S. 19 (2001).

 STATEMENT 

1. a. Congress enacted the FCRA in 1970 to prevent 

harm to consumers arising from flaws in the credit reporting system, to protect consumer privacy, and to improve the integrity and reliability of credit reports, 

thereby promoting efficiency in the Nation’s banking and 

consumer credit systems. TRW, 534 U.S. at 23; S. Rep. 

No. 517, 91st Cong., 1st Sess. 1 (1969). Congress found 

that “[a]n elaborate mechanism has been developed” for 

investigating, cataloguing, and disseminating information about the “credit standing, credit capacity, character, and general reputation” of tens of millions of consumers. 15 U.S.C. 1681(a)(2). Congress passed the 

FCRA “to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartial-

(1) 
2

ity, and a respect for the consumer’s right to privacy.” 

15 U.S.C. 1681(a)(4). Improving the “[a]ccuracy and fairness of credit reporting,” 15 U.S.C. 1681(a), was critical 

because “[i]naccurate credit reports directly impair the 

efficiency of the banking system” and erode “the public 

confidence which is essential to the continued functioning 

of the banking system,” 15 U.S.C. 1681(a)(1). Congress 

thus directed consumer reporting agencies “[to] adopt 

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

other information” in a manner that 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 FCRA identifies the purposes for which consumer 

reports may permissibly be requested and used, including the underwriting of insurance. 15 U.S.C. 

1681b(a)(3)(A)-(C) (Supp. IV 2004). The Act also gives 

consumers the right to see their credit report, 15 U.S.C. 

1681g (2000 & Supp. IV 2004), and establishes detailed 

procedures for the resolution of consumers’ disputes over 

the accuracy of reports, 15 U.S.C. 1681i (2000 & Supp. IV 

2004). The Act further requires all users of credit reports to provide notice to the affected consumer whenever they “take[] any adverse action with respect to any 

consumer that is based in whole or in part on any information contained in a consumer report,” and to inform 

the consumer of the right to obtain a copy of the report 

and to challenge its content. 15 U.S.C. 1681m(a). 

b. Congress created a federal cause of action for consumers against those who furnish credit information, or 

who create, market, or use credit reports in violation of 
3

the FCRA. 15 U.S.C. 1681p (Supp. IV 2004).

1 Under 15 

U.S.C. 1681o (2000 & Supp. IV 2004), “[a]ny person who 

is negligent in failing to comply with any requirement 

imposed under [the FCRA] with respect to any consumer” is liable for “actual damages sustained by the 

consumer as a result of the failure,” as well as costs and 

attorney’s fees. 15 U.S.C. 1681o(a) (2000 & Supp. IV 

2004). If the failure to comply with a requirement of 

FCRA is ”willful[],” the consumer may obtain (i) either 

actual damages or statutory damages “of not less than 

$100 and not more than $1,000,” (ii) “such amount of punitive damages as the court may allow,” and (iii) costs 

and attorney’s fees. 15 U.S.C. 1681n(a)(1)(A)-(3).2 

2. This case arises out of two separate proposed class 

actions against two different insurance companies for 

allegedly failing to comply with the FCRA’s adverse-action notice requirements. 

a. Respondent Edo applied to GEICO for automobile 

insurance.3 GEICO relied on Edo’s credit report to eval1 In 2003, Congress limited private enforcement of violations of 

Section 1681m. See 15 U.S.C. 1681m(h)(8) (Supp. IV 2004). 

2 Congress also established civil liability for specific instances of 

“knowing noncompliance,” rendering any person “who obtains a 

consumer report from a consumer reporting agency under false 

pretenses or knowingly without a permissible purpose” liable to the 

consumer reporting agency for either actual damages or $1000 in 

statutory damages, “whichever is greater.” 15 U.S.C. 1681n(b). 

Congress further directed that a “natural person” who obtains a 

consumer report from any source “under false pretenses or knowingly 

without a permissible purpose” is likewise liable for the greater of 

either actual damages or $1000. 15 U.S.C. 1681n(a)(1)(B). 

3 While the parties disputed below which (if any) of the GEICO and 

Safeco companies were proper defendants, petitioners do not press that 

argument here. Accordingly, this brief refers to the petitioners in No. 

06-100 as “GEICO” and in No. 06-84 as “Safeco.” 
4

uate his application and, based in part on the report, offered Edo insurance at a higher premium rate than it 

offered to other applicants. 06-100 Pet. App. 39a. 

Originally, GEICO provided adverse action notices to 

all customers whose initial insurance rates were based, 

at least in part, on adverse credit reports. 06-100 Pet. 

App. 12a. GEICO subsequently changed that policy and, 

instead, compared the rate an insured was offered to the 

rate he would have been offered if the credit report had 

been “neutral.” Ibid. Where GEICO determined, as it 

did in Edo’s case, that the rate would not have changed 

if it had applied a neutral credit score (or if it had not 

considered his credit score at all), GEICO did not issue 

an adverse action notice. Id. at 14a, 21a n.12. In 2002, 

GEICO abandoned that policy and resumed issuing adverse action notices “whenever a report with more favorable credit information would have resulted in a lower 

insurance rate.” Ibid. 

Edo filed a proposed class-action lawsuit against 

GEICO alleging that GEICO violated the FCRA by failing to provide him with an adverse action notice. The 

complaint sought statutory and punitive damages. 06-

100 Pet. App. 9a. The district court granted GEICO’s 

motion for summary judgment, id. at 37a-47a, holding 

that no adverse action occurred because Edo’s insurance 

rate “would have been the same even if GEICO Indemnity did not consider information in [Edo’s] consumer 

credit history.” Id. at 46a. 

b. Respondents Charles Burr and Shannon Massey 

purchased insurance policies from Safeco. Safeco relied 

on information in their consumer reports to set the initial 

premiums and, based on that information, charged them 

higher rates than it charged customers with better re-
5

ports. Safeco, however, did not issue Burr or Massey 

adverse action notices. 06-84 Pet. App. 4a-5a, 11a. 

Burr and Massey subsequently joined as named plaintiffs in a proposed class-action lawsuit alleging that 

Safeco’s failure to provide adverse action notices after 

setting higher insurance premiums based on their credit 

reports constituted a willful violation of the FCRA. 06-

84 Pet. App. 24a. While they did not allege actual damages, Burr and Massey sought statutory and punitive 

damages. 06-84 Pet. C.A. Supp. E.R. 3-4. 

The district court granted Safeco’s motion for summary judgment against Burr and Massey. 06-84 Pet. 

App. 3a-14a. The court held that the use of a credit report to set higher premiums for an initial application for 

insurance was not an “adverse action” because the FCRA 

requires an “increase in any charge for” insurance, 15 

U.S.C. 1681a(k)(1)(B)(i), and such an increase could occur only if the “insurer charges an insured one price for 

insurance and then subsequently increases that charge.” 

06-84 Pet. App. 11a-12a. 

3. The court of appeals reversed in both cases. 06-84 

Pet. App. 1a-2a; 06-100 Pet. App. 1a-36a. 

a. In respondent Edo’s case, the court held that 

GEICO’s use of his credit report to set his insurance rate 

constituted an “adverse action” under the FCRA, because the company relied on the report and, if Edo’s 

credit rating had been better, he would have been 

charged a lower rate. 06-100 Pet. App. 20a-21a. 

Addressing the standard for a willful violation of the 

FCRA, the Ninth Circuit agreed with the Third Circuit 

that a defendant acts “willfully” if it acts with either a 

conscious disregard of consumers’ known rights under 

the FCRA or “reckless disregard of whether the policy 

[or action] contravened those rights.” 06-100 Pet. App. 
6

31a (quoting Cushman v. Trans Union Corp., 115 F.3d 

220, 227 (3d Cir. 1997)). The court further held that, under the reckless-disregard standard, a defendant will be 

liable if it relies “on creative lawyering that provides 

indefensible answers,” “implausible interpretations,” or 

“creative but unlikely answers to ‘issues of first impression.’” Id. at 33a-34a. The court concluded that “at least 

some of the interpretations” in the case were “implausible,” id. at 34a, and remanded to the district court for 

further proceedings. Id. at 36a. 

b. In petitioner Safeco’s case, the court of appeals reversed. 06-84 Pet. App. 1a-2a. Based on its decision in 

Edo, the court held that the FCRA’s adverse action provision applies to increases in the charge for an initial 

policy of insurance, id. at 1a-2a, and that Safeco could be 

held to have acted willfully, id. at 2a.

 SUMMARY OF ARGUMENT 

I. Under the FCRA, a person willfully fails to comply 

with the law if he or she acts knowingly or in reckless 

disregard of the Act’s requirements. For decades, this 

Court has repeatedly held that the term “willfully” in 

civil statutes encompasses not only knowing, but also 

reckless, disregard of the law or the rights of others. 

That familiar pattern includes statutes that were enacted 

contemporaneously with the FCRA and that share its 

focus on compliance with laws protecting federally created rights. In the absence of a contrary indication in 

the text—and there is none in the FCRA—this Court’s 

settled practice is to assume that Congress hewed to that 

pattern, rather than departed anomalously from it. That 

ordinary reading of “willfully” also comports with the 

FCRA’s structure, which separately carves out for more 

serious treatment certain violations committed “know-
7

ingly,” a limitation that would be meaningless if “willfully” were already confined to violations of known legal 

standards. 

While the court of appeals was correct to construe 

“willfully” as incorporating a reckless-disregard component, the court misdescribed and misapplied that standard. To establish reckless disregard in failing to comply 

with the law, a plaintiff must show more than an unreasonable, unlikely, or implausible construction of the law. 

The plaintiff must establish that the defendant acted 

either in disregard of known legal obligations or with 

indifference to an objectively high and obvious risk of 

unlawfulness. Reckless disregard, in other words, requires such an extreme departure from standards of ordinary care as either to be tantamount to acting knowingly or to reflect such disregard for the law as to merit 

equivalent censure. 

II. The court of appeals correctly held that charging 

a customer a higher rate for insurance based on his 

credit report constitutes an adverse action. The FCRA 

defines “adverse action” to include “an increase in any 

charge for [insurance] * * * applied for” based on the 

content of a credit report. 15 U.S.C. 1681a(k)(1)(B)(i). 

That language readily encompasses charging an individual a higher rate than that given to customers with 

better credit reports, just as charging a higher premium 

based on a new applicant’s other individual characteristics, such as age, gender, or a poor driving record, would 

naturally be described as an “increase” in the rate 

charged. 

GEICO argues that no adverse action occurred because Edo would have received the same insurance rate 

if his credit report had not been used. But that is irrelevant. Edo’s credit report was used, and GEICO charged 
4 

8

Edo a higher rate as a result. The rate he would have 

been charged if, contrary to fact, his report has not been 

consulted is beside the point. Insurers are not required 

to use credit reports, but when they choose to do so they 

must comply with Congress’s calibrated scheme, which 

seeks to protect both consumers and the integrity and 

reliability of the Nation’s credit and banking systems, 

and which makes providing consumers with notice of all 

adverse actions critical to accomplishing those goals. 

While GEICO’s construction of the adverse-action 

notice requirement was erroneous, the resulting failures 

to notify consumers were not willful violations of the 

FCRA. The legal question of the FCRA’s coverage was 

one of first impression that was not settled by statutory 

text, formal agency guidance, or case law. GEICO’s 

reading, while wrong, does not reflect the type of extreme departure from responsible judgment that 

amounts to reckless disregard of the law. 

ARGUMENT 

I. A “WILLFUL” FAILURE TO COMPLY WITH THE REQUIREMENTS OF THE FCRA REQUIRES PROOF THAT 

THE DEFENDANT EITHER KNOWINGLY OR RECKLESSLY DISREGARDED THE LAW 

“[W]illfully” is “a word of many meanings,” the construction of which “is often dependent on the context in 

which it appears.” Bryan v. United States, 524 U.S. 184, 

191 (1998) (quoting Spies v. United States, 317 U.S. 492, 

497 (1943)).4

 When the word appears in criminal statutes, it generally refers to a “culpable state of mind,” 

See Ratzlaf v. United States, 510 U.S. 135, 141 (1994); United 

States v. Bishop, 412 U.S. 346, 352 (1973); Screws v. United States, 325 

U.S. 91, 101 (1945). 
9

such as a “bad purpose” to violate the law, Bryan, 524 

U.S. at 191 & n.12. By contrast, when (as here) “willfully” appears in a civil statute—particularly one that is 

designed to protect federal rights and that is framed in 

terms of the defendant’s compliance with the law—the 

term means a knowing or reckless disregard of the law. 

“Recklessness,” in turn, requires more than mere negligence. McLaughlin v. Richland Shoe Co., 486 U.S. 128, 

133 (1988). It imposes an objective standard that is satisfied only if the defendant acted in the face of such a high 

risk that its conduct would violate the law that the illegality was either known or so obvious as to require the 

exercise of greater care. 

A. “Willfully” Is Traditionally Interpreted In Civil Statutes, 

Particularly Laws Designed To Enforce Federal Rights, To 

Mean Either Knowing Or Reckless Disregard Of Legal 

Obligations 

Construing the word “willfully” in the FCRA to encompass both knowing and reckless disregard of the law 

“is surely a fair reading of the plain language of the Act.” 

Richland Shoe, 486 U.S. at 133. More than a half-century ago, in United States v. Illinois Central R.R., 303 

U.S. 239 (1938), the Court approved the following “useful 

guide to the meaning of the word ‘willfully’ ” in the civil 

context: “it means purposely or obstinately and is designed to describe the attitude of a [defendant], who, 

having a free will or choice, either intentionally disregards the statute or is plainly indifferent to [the statute’s] requirements,” id. at 243. 

More recently, in TWA, Inc. v. Thurston, 469 U.S. 111 

(1985), this Court held that liquidated damages for “willful violations” of the Age Discrimination in Employment 

Act of 1967 (ADEA), 29 U.S.C. 601 et seq., required proof 
5 

10

that the defendant “knew or showed reckless disregard 

for the matter of whether its conduct was prohibited by 

the ADEA.” Thurston, 469 U.S. at 125-126; see Hazen 

Paper Co. v. Biggins, 507 U.S. 604, 617 (1993) (same). 

The Court reached the same conclusion under the Fair 

Labor Standards Act (FLSA), 29 U.S.C. 201 et seq. See 

Richland Shoe, 486 U.S. at 133.5 

That generally established understanding of “willfully” in the civil context forms the backdrop against 

which Congress enacted the FCRA’s willful liability provision, and thus the “absence of [any] contrary direction” 

in the statute evidences Congress’s “satisfaction with 

[that] widely accepted definition[], not * * * a departure from [it].” Morissette v. United States, 342 U.S. 

246, 263 (1952). That common-sense assumption has particular salience here, for two reasons. 

First, when Congress’s aim is to enforce federal rights 

and to induce regulated entities’ attention and adherence 

to the obligations of federal law, Congress has a long 

tradition of employing the reckless-disregard standard 

to accomplish that end. In the FCRA, just like the FLSA 

and the ADEA, the object to which the willfulness standard refers is a defendant’s failure to comply with the 

particular legal constraints imposed by the Act itself. 

Compare 15 U.S.C. 1681n(a), with 29 U.S.C. 255(a); 29 

GEICO notes (06-100 Pet. 15) that Richland Shoe involved only a 

statute-of-limitations provision. There is no reason why that distinction 

should matter, however. Indeed, it was the established construction of 

the FLSA’s criminal willfulness provision that provided the predicate 

for the Court’s adoption of that recklessness standard. See Richland 

Shoe, 486 U.S. at 133; Thurston, 469 U.S. at 125-127. Moreover, the 

FLSA’s civil penalty provision, 29 U.S.C. 216(e), accords “willfully” the 

same established meaning. See Baystate Alternative Staffing, Inc. v. 

Herman, 163 F.3d 668, 679-680 & n.14 (1st Cir. 1998). 
11

U.S.C. 626(b).6 It was in that context that this Court 

concluded in Thurston and Richland Shoe that willfulness encompasses a defendant’s reckless disregard of the 

law. That same recklessness standard governs liability 

provisions in other federal laws, like (i) the Family and 

Medical Leave Act, 29 U.S.C. 2617(c)(2) (statute of limitations)

7

; (ii) the Occupational Safety and Health Act, 29 

U.S.C. 666(a) (civil penalties)8; (iii) the Copyright Act, 17 

U.S.C. 504(c)(2)9; and (iv) firearms licensing, 18 U.S.C. 

923(e) (Supp. IV 2004).10 

Congress similarly employed a standard of reckless 

disregard or reckless indifference to federal rights to 

enforce, through punitive damages, compliance with Title 

VII, 42 U.S.C. 2000e et seq., and the Americans with Disabilities Act, 42 U.S.C. 12101 et seq. See 42 U.S.C. 

1981a(b)(1); Kolstad v. American Dental Ass’n, 527 U.S. 

6 That stands in distinction to willfulness standards that focus on 

conduct external to the statute. See, e.g., Convention for the Unification 

of Certain Rules Relating to International Transportation by Air, 

opened for signature Oct. 12, 1929, art. 25(1), 49 Stat. 3020, 137 

L.N.T.S. 27 (“willful misconduct”); 11 U.S.C. 523(a)(6) (“willful and 

malicious injury”); 38 U.S.C. 1110 (“willful misconduct”). 

7 See Porter v. New York Univ. Sch. of Law, 392 F.3d 530, 531-532 

(2d Cir. 2004); Hanger v. Lake County, 390 F.3d 579, 583-584 (8th Cir. 

2004); Hillstrom v. Best Western Hotel, 354 F.3d 27, 33 (1st Cir. 2003). 

8 See, e.g., A.J. McNulty & Co. v. Secretary of Labor, 283 F.3d 328, 

337 (D.C. Cir. 2002); Brock v. Morello Bros. Constr., Inc., 809 F.2d 161, 

164 (1st Cir. 1987) (Breyer, J.). 

9 See, e.g., Island Software & Computer Serv., Inc. v. Microsoft 

Corp., 413 F.3d 257, 263 (2d Cir. 2005) (willfulness requires actual 

knowledge or “reckless disregard,” or “willful blindness”); In re 

Aimster Copyright Litigation, 334 F.3d 643, 650 (7th Cir. 2003), cert. 

denied, 540 U.S. 1107 (2004). 

10 See RSM, Inc. v. Herbert, No. 06-1393, 2006 WL 3026344, at *5 (4th 

Cir. Oct. 26, 2006) (“deliberate disregard” or “plain indifference”). 
12

526, 535-538 (1999). That same standard has been employed to enforce constitutional and civil rights generally 

under 42 U.S.C. 1983. See Smith v. Wade, 461 U.S. 30, 

51 (1983) (“adopt[ing]” for Section 1983 “the policy judgment of the common law—that reckless or callous disregard for the plaintiff’s rights * * * should be sufficient 

to trigger a jury’s consideration of the appropriateness 

of punitive damages”). 

Second, the FCRA was enacted in 1970, contemporaneously with other statutes in which “willfully” has been 

held to encompass reckless disregard. The ADEA was 

enacted in 1967, see Pub. L. No. 90-202, 81 Stat. 602, 

while the FLSA provision at issue in Richland Shoe was 

enacted in 1966, Pub. L. No. 89-601, § 601(b), 80 Stat. 

844. There is no sound basis for holding that the meaning of “willfully” in civil statutes deviated dramatically 

before 1970. See Dixon v. United States, 126 S. Ct. 2437, 

2445 (2006) (courts must construe a statutory term in a 

liability provision “as Congress may have contemplated 

it” at the time of enactment). 

Accordingly, giving “willfully” in the FCRA’s civil liability provision the same established meaning that the 

term signifies in substantively analogous and contemporaneously enacted statutes would be consistent with Congress’s general practice of employing a “reckless disregard” standard to enforce compliance with federal law 

and to induce solicitude for federally created rights.11 

11 Safeco argues (Pet. 20) that Thurston and Richland Shoe are 

distinguishable because the “willful” provisions in the ADEA and the 

FLSA were enacted “against the backdrop of consistent circuit 

precedent interpreting the term ‘willful’ to include ‘reckless disregard.’ ” But that circuit precedent merely reflected this Court’s 

repeated decisions construing “willful” to include a reckless-disregard 

component. See Thurston, 469 U.S. at 126 (“The definition of ‘willful’ 
13

B. The Structure Of The Fair Credit Reporting Act Demonstrates That “Willfully” Includes Both Knowing And Reckless Disregard Of The Law 

Petitioners’ argument (06-84 Pet. 28; 06-100 Pet. 21-

24) that willfulness requires actual knowledge of the violation of federal law not only overlooks established usage 

of the term in civil statutes, but also fails to comport with 

the overall structure and design of the FCRA. 

First, when Congress wanted to restrict liability 

to knowing violations of the FCRA, it said so explicitly. 

Section 1681n(a)(1)(B) explicitly identifies and targets 

for separate treatment a specialized subset of violators 

within the general category of willful violations of the 

FCRA: those defendants who violate 15 U.S.C. 1681b(f) 

by obtaining a credit report either “under false pretenses” or “knowingly without a permissible purpose.” 

15 U.S.C. 1681n(a)(1)(B). If the word “willfully” in the 

overarching civil-liability subsection (15 U.S.C. 1681n(a)) 

already restricted the scope of that provision to “knowing” violations of the law, there would have been no reason for Congress to repeat that “knowingly” limitation in 

subparagraph (1)(B). This Court does not generally construe statutory terms in a manner that leaves them “with 

no job to do.” Doe v. Chao, 540 U.S. 614, 623 (2004). 

Congress also increased the minimum statutory damages 

for such violators to no less than $1000, 15 U.S.C. 

adopted by the above cited courts [of appeals] is consistent with the 

manner in which this Court has interpreted the term in other criminal 

and civil statutes.”); see also id. at 126-127. Indeed, that meaning was 

so well settled that the Richland Shoe Court rejected a contrary 

standard that had, in fact, been “widely used for a number of years” by 

courts of appeals, 486 U.S. at 133, because that reading was contrary to 

the “plain language of the statute,” which dictated a knowing or 

reckless-disregard standard, id. at 134. 
14

1681n(a)(1)(B), which underscores that Congress considered the conduct more culpable than the “willful” violations covered by the rest of the provision—such as obtaining a report with reckless disregard of the 

impermissibility of the purpose, which would render the 

person liable under Section 1681n(a)(1)(A) for a willful 

violation of Section 1681b(f). 

Likewise, in Section 1681n(b), Congress created a 

cause of action for consumer reporting agencies (as opposed to consumers) that is limited to actions taken under false pretenses or “knowingly without a permissible 

purpose.” 15 U.S.C. 1681n(b). Congress subtitled that 

provision “Civil liability for knowing noncompliance,” in 

contrast to Section 1681n’s general caption of “Civil liability for willful noncompliance.” If willfulness were already limited to knowing violations, there would have 

been no reason for Congress to separate out structurally 

those violations that require a knowing violation of the 

FCRA. See also 15 U.S.C. 1681s(a)(2)(A) (civil liability 

actions by the Commission require a “knowing violation” 

of the FCRA). The plain import of Congress’s language 

and structure thus confirms what the ordinary understanding of the text says—liability for “willful” violations 

reaches further than just knowing violations of the 

law and includes conduct in reckless disregard of 

the FCRA’s requirements. 

Second, Congress’s deliberate use of different mens 

rea phraseology in the FCRA’s criminal prohibitions underscores Congress’s sensitivity to the distinct usages of 

“willfully” in civil and criminal law. In 15 U.S.C. 1681q 

and 1681r respectively, Congress criminalized the obtaining of credit reports under false pretenses and the 

unauthorized disclosure of consumer information when 

done “knowingly and willfully.” Together, those terms 
15

are understood to mean a conscious and intentional violation of a statute, Black’s Law Dictionary 1012 (rev. 4th 

ed. 1968), and suggest a “bad purpose” component to 

“willfully” that is consonant with its traditional usage in 

criminal statutes, see Bryan, 524 U.S. at 191 & n.12; see 

also United States v. Murdock, 290 U.S. 389, 395 (1933), 

overruled in other part, Murphy v. Waterfront Comm’n, 

378 U.S. 52 (1964).12 

Petitioners, however, propound a reading of “willfully” 

that leaves little, if any, room between Congress’s differently articulated criminal and civil provisions. See 06-84 

Pet. 18 (requiring an “intentional refusal to abide by 

known legal requirements”); id. at 28; 06-100 Pet. 21. 

This Court should “refrain from concluding here that the 

differing language in the two subsections has the same 

meaning in each,” especially when it would have the effect of equating the higher mens rea of the criminal prohibitions with the requirements of the distinctly worded 

civil provisions. Russello v. United States, 464 U.S. 16, 

23 (1983). 

Third, petitioners’ reading of “willfully” leaves no natural home in the structure of the liability provisions for 

reckless disregard of the FCRA’s requirements. The 

FCRA authorizes civil damages actions for “willful noncompliance,” 15 U.S.C. 1681n, and “negligent noncompliance,” 15 U.S.C. 1681o (2000 & Supp. IV 2004). As between the two, the more natural and traditional home for 

liability based on reckless disregard is the willfulness 

12 Tellingly, even in the criminal context, “willfully” has been 

understood to include reckless disregard of the law or the rights of 

others. See, e.g., Thurston, 469 U.S. at 125-126 (equating its “reckless 

disregard” standard with the standard for establishing criminal liability 

under the FLSA). 
16

provision. See Hazen Paper, supra; Richland Shoe, supra; Thurston, supra. 

Furthermore, as petitioners note (06-84 Pet. 20-21; 06-

100 Pet. 22), Congress considered and rejected a provision that would have made “gross negligence,” rather 

than negligence, the standard for obtaining actual damages. As passed by the Senate, the predecessor bill to 

the FCRA dichotomized civil liability into “willful noncompliance” and “grossly negligent non-compliance.” 

S. 823, 91st Cong., 1st Sess. § 617 (1969); see S. Rep. No. 

517, supra, at 7. In the Conference Committee, the latter standard was lowered to mere negligence. H.R. Conf. 

Rep. No. 1587, 91st Cong., 2d Sess. 30 (1970). 

Equating “gross negligence” with reckless disregard 

(06-84 Pet. 20; 06-100 Pet. 22), petitioners contend that 

Congress must have intended that the willfulness provision not extend to grossly negligent conduct. But “most 

courts consider that ‘gross negligence’ falls short of a 

reckless disregard of consequences,” W. Prosser, The 

Law of Torts § 34, at 183 (4th ed. 1971), so the failure to 

incorporate a gross negligence standard into Section 

1681o sheds little light on Congress’s views regarding 

recklessness. Moreover, it is highly doubtful that the 

same Members of Congress who rejected “gross negligence” as too high a threshold for actual damages simultaneously concluded that the threshold for the further 

remedies of statutory and punitive damages should be as 

high as knowing conduct, and not reckless disregard. 

Petitioners’ reading of the FCRA’s text and legislative 

history is not only counterintuitive, but also would leave 

“reckless disregard” of the FCRA’s terms a statutory 

orphan—a standard of culpability that sets too high a bar 

to fit logically within the Act’s negligent non-compliance 
17

provision and too low a bar to fall within the willful noncompliance provision.13 

Fourth, petitioners argue (06-84 Pet. 23-24; 06-100 

Pet. 15, 17) that “recklessness disregard” sets too low a 

threshold for punitive damages. But reckless disregard 

or indifference to federal rights is an established standard for punitive damages liability and a familiar one to 

businesses, including those involved in consumer reporting, see Dun & Bradstreet, Inc., v. Greenmoss Builders, 

Inc., 472 U.S. 749, 751, 760-763 (1985) (plurality opinion) 

(credit reporting agencies favor a reckless-disregard 

standard). Indeed, a number of State consumer-reporting laws appear to impose the same or a similar standard 

for punitive damages, so it is a standard with which petitioners are already familiar when using consumer reports.14 

13 Petitioners argue that Congress actually “consider[ed]” versions of 

the liability provision that would have allowed actual and punitive 

damages for “willful or grossly negligent” violations. See 06-100 Pet. 

22 (emphasis omitted); see also 06-84 Pet. 21. That is a generous 

reading of the legislative history. The two House bills to which they 

refer never received a single day of debate or hearings, and never made 

it out of Committee, let alone the House. See H.R. 19403, § 52, 91st 

Cong., 2d Sess. (Sept. 22, 1970); H.R. 19410, § 52, 91st Cong., 2d Sess. 

(Sept. 22, 1970). Furthermore, even if a handful of Representatives 

were aware of that language, their failure to press for its enactment 

may well have reflected their concurrence with this Court’s view that 

the “gross negligence” standard is “too vague, and too likely to be 

confused with mere ordinary negligence, to provide a fair standard” for 

punitive damages. Smith, 461 U.S. at 43; see id. at 49; Farmer v. 

Brennan, 511 U.S. 825, 836 n.4 (1994). 

14 See Cal. Civ. Code § 1785.20 (West 1998); id. §§ 1785.31, 1786.40 

(West Supp. 2006); Simms v. Royal Thrift & Loan Co., No. E028659, 

2002 WL 32576, at *6 (Cal. Ct. App. Jan. 11, 2002) (unpub.) (violation is 

“willful” if “the defendant knowingly failed to fulfill an obligation 

without a good faith, reasonable belief in the legality of his or her 
18

In addition, petitioners are already subject to punitive 

damages if they recklessly disregard the requirements 

of Title VII or the Americans with Disabilities Act. See 

42 U.S.C. 1981a; Kolstad, supra. Reckless disregard is 

also the standard courts apply under the ADEA for liquidated damages, which are “punitive in nature,” 

actions”); Ariz. Rev. Stat. Ann. § 44-1695(C) (West 2003) (“grossly 

negligent”); Armenta v. City of Casa Grande, 71 P.3d 359, 364 (Ariz. Ct. 

App. 2003) (defining “[g]ross, willful, or wanton conduct” generally as 

“action or inaction with reckless indifference to the result or the rights 

or safety of others”); Kan. Stat. Ann. §§ 50-714, 50-715 (1994); Reeves 

v. Carlson, 969 P.2d 252, 256-257 (Kan. 1998) (in tort law, “willful” 

means a person has “knowledge of existing conditions and [is] aware 

* * * that [harm] will likely or probably result from his or her conduct, 

and with reckless indifference to the consequences, consciously does 

some act or omits to discharge some duty, which produces the injurious 

result”); Me. Rev. Stat. Ann. title 10, § 1320 (West Supp. 2005); id. 

§ 1322 (West 1997); Shrader-Miller v. Miller, 855 A.2d 1139, 1144 (Me. 

2004) (In tort law, “willfully” “mean[s] conduct displaying an ‘utter and 

complete indifference to and disregard for the rights of others.’ ”); Md. 

Code Ann. Com. Law § 14-1212 (LexisNexis 2005); id. § 14-1213 (Supp. 

2006); Williams Constr. Co. v. Garrison, 400 A.2d 22, 25 (Md. Ct. Spec. 

App. 1979) (“willful[ness] in worker’s compensation law includes “the 

intentional doing of something * * * with a wanton and reckless 

disregard of its probable consequences”); Mont. Code Ann. §§ 31-3-131, 

31-3-142, 33-18-608 (2005); Cooper v. Rosston, 756 P.2d 1125, 1130 

(Mont. 1988) (“When a person knows or has reason to know facts which 

create a high degree of risk of harm to the substantial interests of 

another, and * * * recklessly proceeds in unreasonable disregard of or 

indifference to that risk, his conduct meets the standard of willful, 

wanton, and/or reckless to which the law of this State will allow 

imposition of punitive damages.”); N.Y. Gen. Bus. Law. § 380-i 

(McKinney 1996); id. § 380-l (Supp. 2006); Welch v. Mr. Christmas Inc., 

440 N.E.2d 1317, 1321 (N.Y. 1982) (“[R]ecovery of exemplary or 

punitive damages in a common-law action requires a showing of 

conscious disregard of the rights of others or conduct so reckless as to 

amount to such disregard.”); see generally Restatement (Second) of 

Torts § 908(2) (1979). 
19

Thurston, 469 U.S. at 125, under the Equal Credit Opportunity Act, 15 U.S.C. 1691e(b), and under a number of 

other federal laws.15 Indeed, reckless disregard has already been determined to be an adequate shield even in 

areas of First Amendment concern, see Gertz v. Robert 

Welch, Inc., 418 U.S. 323, 349 (1974).16 

Finally, the question of how the FCRA responds to 

covered entities who recklessly disregard the statute’s 

requirements is, at bottom, a question about Congress’s 

level of tolerance for reckless disregard of the law. The 

FCRA is designed to protect individuals from abuse, to 

enhance individual privacy, and to promote integrity, 

15 See, e.g., Barbour v. Merrill, 48 F.3d 1270, 1277 (D.C. Cir. 1995) (42 

U.S.C. 1981), cert. dismissed, 516 U.S. 1155 (1996); Ragin v. Harry 

Macklowe Real Estate Co., 6 F.3d 898, 909 (2d Cir. 1993) (Fair Housing 

Act, 42 U.S.C. 3601 et seq.); United States v. Balistrieri, 981 F.2d 916, 

936 (7th Cir. 1992) (Fair Housing Act), cert. denied, 510 U.S. 812 (1993); 

Asbury v. Brougham, 866 F.2d 1276, 1282 (10th Cir. 1989) (42 U.S.C. 

1982); Stephens v. South Atl. Canners, Inc., 848 F.2d 484, 489-490, 492 

& n.6 (4th Cir.) (42 U.S.C. 1981), cert. denied, 488 U.S. 996 (1988); 

Williamson v. Handy Button Mach. Co., 817 F.2d 1290, 1296 (7th Cir. 

1987) (42 U.S.C. 1981); Fischl v. General Motors Acceptance Corp., 708 

F.2d 143, 148 (5th Cir. 1983) (Equal Credit Opportunity Act). 

16 Petitioner Safeco contends (06-84 Pet. 21) that Congress “implicitly 

endorse[d]” reading “willfully” to mean knowing violations of the law 

when it amended the FCRA in 1996 without changing the legal 

standard. There is nothing in the legislative history that supports that 

conclusion or, more particularly, that suggests that Congress understood the circuits’ “conscious disregard” standard to exclude reckless 

disregard. Indeed, both the Third and Ninth Circuits have included 

“reckless disregard” within a “conscious disregard” standard, see 06-84 

Pet. App. 127a; Cushman, 115 F.3d at 226-227, and other courts have 

used the phrases interchangeably in this context, see Casella v. Equifax 

Credit Info. Servs., 56 F.3d 469, 476 (2d Cir. 1995), cert. denied, 517 

U.S. 1150 (1996), and elsewhere, see, e.g., Bevolo v. Carter, 447 F.3d 

979, 982-984 (7th Cir. 2006); Stuart v. United States, 337 F.3d 31, 36 (1st 

Cir. 2003); United States v. Gonsalves, 435 F.3d 64, 70 (1st Cir. 2006). 
20

efficiency, and reliability in the Nation’s banking system. 

See 15 U.S.C. 1681(a)(1), (4) and (b). In the face of those 

critical interests, petitioners posit a statutory scheme 

that cares sufficiently little about non-compliance and 

the harms that it can cause as to treat ordinary negligence and heedless disregard of the law with equivalent 

censure. But the FCRA demands, as its starting point, 

that regulated entities take reasonable measures and 

strike reasonable balances in exercising their “grave responsibilities,” 15 U.S.C. 1681(a)(4) and (b), purposes 

that cannot be reconciled with petitioners’ proposed environment of broad tolerance for companies’ reckless indifference to harm and failure to exercise even slight care 

in complying with the law. 

C. Reckless Disregard Requires Indifference To Clearly Established Law Or The Disregard Of An Obvious And High 

Probability That Conduct Is Unlawful 

While the court of appeals correctly held that “willfully” in the FCRA includes a reckless-disregard component, the court misconceived the import of that standard 

and misapplied it in these cases. For example, the court 

of appeals held that “implausible” interpretations (06-100 

Pet. App. 34a) or knowing reliance on legal opinions 

“that provide creative but unlikely answers to ‘issues of 

first impression’ ” (id. at 33a) constitute reckless disregard. The court further noted (id. at 34a) that whether 

consultation with attorneys would provide evidence of a 

lack of willfulness would depend upon the “unreasonableness” of the erroneous interpretation. That resembles a 

mere negligence standard, and thus sets too low a bar. 

See Richland Shoe, 486 U.S. at 134-135 & n.13. 

To be sure, “the term recklessness is not self-defining,” Farmer v. Brennan, 511 U.S. 825, 836 (1994), nor 
21

capable of being cabined into “one infallible definition,” 

St. Amant v. Thompson, 390 U.S. 727, 730 (1968). “Inevitably its outer limits will be marked out through caseby-case adjudication, as is true for so many legal standards.” Id. at 730-731. Nevertheless, there are two essential aspects of “reckless disregard” in the civil context 

that should have guided the court’s application. 

First, recklessness bespeaks an aggravated or extreme departure from standards of ordinary care. In 

contrast to negligence, recklessness entails action or 

inaction “in the face of an unjustifiably high risk of 

harm” or unlawfulness, Farmer, 511 U.S. at 836 (emphasis added). The probability that harm or a violation of 

the law will result must be apparent to a “high degree.” 

Harte-Hanks Commc’ns, Inc. v. Connaughton, 491 U.S. 

657, 667 (1989). Accordingly, “[t]he usual meaning assigned to * * * ‘reckless’ * * * is that the actor has 

intentionally done an act of an unreasonable character in 

disregard of a risk known to him or so obvious that he 

must be taken to have been aware of it, and so great as 

to make it highly probable that harm [or illegality] would 

follow.” Prosser, supra, § 34, at 185; see Farmer, 511 

U.S. at 837. 

Proof of such an aggravated deviation from the standard of ordinary care is necessary because “reckless disregard” is designed to capture two acute forms of culpability. The reckless-disregard standard reaches conduct 

that is so wrongful under the circumstances that it is a 

proxy for or functionally equivalent to knowing or intentional conduct, which can in some contexts be difficult to 

prove.17 But when couched (as in the FCRA) in terms of 

17 See, e.g., Barry v. Edmunds, 116 U.S. 550, 563 (1886) (standard 

captures that “reckless indifference to the rights of others which is 
22

reckless disregard of the law, the recklessness standard 

also captures failures to conform behavior to the law that 

are so extreme as to independently merit censure.18 

Second, reckless disregard in the civil context is, at 

bottom, an objective standard. See Farmer, 511 U.S. at 

836-837; Prosser, supra, § 34 at 185 (“an objective standard must of necessity in practice be applied”). That is 

even more true when, as here, the recklessness standard 

is framed in terms of compliance with the law, and the 

statutory standard itself is not necessarily well-established. Although inquiries into recklessness often take 

place in areas of well-established duties of care, in the 

statutory context, when the concern is whether the disregard of the law was reckless, the extent to which the law 

was well-established and clearly understood must be part 

of the analysis. Therefore, courts must undertake an 

objective inquiry to determine whether the defendant’s 

conduct reflected a colorable interpretation of the law. 

But because the standard is recklessness, not negligence, 

more than mere unreasonableness or implausibility must 

be shown. See Richland Shoe, 486 U.S. at 134-135 & 

n.13. The plaintiff must demonstrate either that the legal position ran afoul of clearly established law or that 

equivalent to an intentional violation of them”); Saba v. Compagnie 

Nationale Air France, 78 F.3d 664, 667-668 (D.C. Cir. 1996) (in some 

statutes, reckless disregard “provid[es] a proxy” for knowing or 

intentional conduct, while “alleviat[ing] problems of proof”). 

18 See, e.g., Illinois Cent., 303 U.S. at 243 (willfulness encompasses 

actions that either “intentionally disregard[] the statute or [are] plainly 

indifferent to its requirements”); Brock, 809 F.2d at 164 (in civil cases, 

a person acts willfully if “the offender shows ‘indifference’ to the rules; 

he need not be consciously aware that the conduct is forbidden at the 

time he performs it, but his state of mind must be such that, if he were 

informed of the rule, he would not care”). 
23

the defendant failed to act with necessary care in the 

face of a high and obvious risk of legal error. In other 

words, the defendant’s determination of his legal obligations must be shown to have fallen outside the range of 

responsible judgment.

19 The reckless-disregard component of willfulness thus requires violation of clearly established law or indifference to an objectively high and 

obvious risk of unlawfulness.20 

That purely legal inquiry into the objective recklessness of the defendant’s failure to comply with the FCRA 

can, and generally should, be undertaken at an early 

stage in the case. Only if the defendant’s failure to comply with the law was objectively reckless would it become 

necessary for a court to probe, as the court of appeals 

invited here (06-100 Pet. App. 33a-34a), the defendant’s 

subjective good faith. Resolving the objective recklessness of the defendant’s non-compliance with the law at 

the outset will (i) help to develop the contours of FCRA 

law, thereby providing prospective guidance concerning 

the law’s requirements and reducing violations; (ii) “permit the resolution of many insubstantial claims on summary judgment,” Harlow v. Fitzgerald, 457 U.S. 800, 818 

(1982); and (iii) minimize the significant intrusions on 

attorney-client privilege that often attend inquiries into 

19 In that respect, the test is similar to the qualified-immunity inquiry 

into whether a defendant’s conduct violated “clearly established law.” 

Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). Indeed, this Court has 

acknowledged the overlap of the qualified-immunity inquiry and the 

“reckless disregard” standard. See Smith, 461 U.S. at 51-54. 

20 Cf. Professional Real Estate Investors, Inc. v. Columbia Pictures 

Indus., Inc., 508 U.S. 49, 60 (1993) (to overcome Noerr-Pennington 

immunity in antitrust law, the defendant’s litigation position must have 

been “objectively baseless” and “objectively meritless”). 
24

subjective good faith compliance with the law, see 06-100 

Pet. App. 34a. 

The court of appeals deviated substantially from that 

framework. The court gave improper significance to allegedly improper motivations at the outset, 06-100 Pet. 

App. 33a, and inappropriately collapsed the objective and 

subjective components of recklessness into a single inquiry, inviting immediate inquiry on remand into the 

privileged advice of counsel, id. at 34a. The court also 

applied too diluted a standard for recklessness, suggesting that it can be satisfied by “unreasonableness,” “unlikely answers,” or “implausible interpretations,” id. at 

33a-34a. Because the court concluded that “at least some 

of the [defendants’] interpretations are implausible,” and 

hence reckless under the court’s analysis, and because 

the court ordered the case remanded for further proceedings “consistent with [its] opinion” setting forth an 

incorrect articulation of the governing recklessness standard (id. at 34a, 36a; see 06-84 Pet. App. 2a), the court’s 

judgments cannot stand. 

II. AN ADVERSE ACTION NOTICE IS REQUIRED WHEN 

THE CONTENT OF A CONSUMER’S CREDIT REPORT 

PREVENTED THE CONSUMER FROM OBTAINING A 

BETTER INSURANCE RATE 

A. Providing A Higher Insurance Rate Based, In Part, On 

A Credit Report Constitutes An Adverse Action 

The court of appeals correctly concluded in No. 06-100 

(Pet. App. 20a-21a) that GEICO took an adverse action 

against Edo. The FCRA defines an adverse action in the 

insurance context as: 

a denial or cancellation of, an increase in any charge 

for, or a reduction or other adverse or unfavorable 
25

change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the 

underwriting of insurance. 

15 U.S.C. 1681a(k)(1)(B)(i).21 

GEICO concedes (06-100 Pet. App. 10a) that charging 

a new customer a higher rate than that available to other 

customers based, at least in part, on the customer’s 

credit report can constitute an “increase in a[] charge for 

[insurance] * * * applied for,” 15 U.S.C. 

1681a(k)(1)(B)(i), and thus an adverse action. That concession was a wise one. The plain meaning of “increase” 

is “to become” or “to make” “greater in some respect.” 

Webster’s Third New Int’l Dictionary 1145 (1961); see 

Webster’s New Int’l Dictionary 1260 (2d ed. 1958). 

When an insurer charges one new customer more than 

others based, at least in part, on the content of the customer’s credit report, it requires no linguistic leaps to 

conclude that the insurer has “increase[d]” the insurance 

charge for that customer. 

Nothing in the meaning or usage of that term in the 

FCRA presupposes that the baseline for determining 

whether a rate is greater must be a price previously paid 

by the same customer himself, as opposed to the price 

offered to others.22 The FCRA’s prohibitions are not 

21 The FCRA defines “adverse action” differently depending on the 

type of transaction involved (i.e., insurance, credit, employment, or 

licensing). See 15 U.S.C. 1681a(k)(1). This case concerns only the 

insurance provision. 

22 See 16 C.F.R. Pt. 600 App., at 519 (notice required if any adverse 

action is taken, even if the information is non-derogatory); 16 C.F.R. Pt. 

698 App. H, at 552 (Notice of User Responsibilities) (“ ‘adverse action’ 

is defined very broadly” and includes any decision “hav[ing] a negative 

impact”); S. Rep. No. 209, 103d Cong., 1st Sess. 4, 8 (1993) (adverse 

action notice required “any time the permissible use of a report results 
26

limited to repeat customers. Nor is such a reading required by common usage. Had Edo pulled into a gas station and been charged ten cents a gallon more because of 

his race, gender, or the fact that his license plate ended 

in an odd, rather than an even, number, Edo would have 

suffered an “increase[d]” charge for gasoline, regardless 

of whether he had ever purchased gasoline at that station 

before. See Cornist v. B.J.T. Auto Sales, Inc., 272 F.3d 

322, 327 (6th Cir. 2001) (a charge imposed on credit purchasers of new cars was an “increase” over the price 

charged to cash customers). 

GEICO argues (06-100 Pet. 25-29) that no adverse 

action occurred because it determined after the fact that 

Edo’s rate would have been the same if no credit report 

had been requested and GEICO had instead applied a 

neutral credit score. GEICO does not dispute, however, 

that it, in fact, obtained and used Edo’s actual credit 

score and, on that basis, charged him a higher rate for 

insurance than what was offered to certain other customers and what would have been offered to him if his credit 

score had been better. 06-100 Pet. App. 11a-12a, 14a. 

What GEICO would have done in the absence of a credit 

report is beside the point, because what GEICO did—use 

a credit report adversely without providing notice—violated the statute.23 

in an outcome adverse to the interests of the consumer”); H.R. Rep. No. 

486, 103d Cong., 2d Sess. 26 (1994) (same); S. Rep. No. 517, supra, at 7 

(adverse action notice required whenever a consumer is “charged a 

higher rate for * * * insurance” because of his credit report). 

23 Indeed, had GEICO not intended to use Edo’s report in connection 

with the underwriting of insurance, such as to set his insurance rate, it 

would have obtained the report without any permissible purpose, in 

violation of 15 U.S.C. 1681b(a) (Supp. IV 2004). 
27

Nothing in the FCRA conditions the existence of an 

adverse action on the absence of post hoc rationales for 

the higher rate. By the statute’s plain terms, an “adverse action” requires nothing more than that the insurance company “take[] any adverse action,” 15 U.S.C. 

1681m(a)—such as an “increase” in the charge for insurance, 15 U.S.C. 1681a(k)(1)(B)(i)—“based in whole or in 

part on any information contained in a consumer report.” 

15 U.S.C. 1681m(a). If it does, an adverse action notice 

is required. Ibid. Properly understood, therefore, the 

adverse action occurred and was completed the moment 

Edo’s insurance rate was set at a higher and less-preferable level based, at least in part, on his credit report— 

and, at that point, the obligation to issue an adverse-action notice was triggered. See TRW, 534 U.S. at 35 (under the FCRA, “[p]unitive damages * * * could presumably be awarded at the moment of TRW’s alleged 

wrongdoing,” regardless of whether and when actual 

damages might be established); cf. McKennon v. Nashville Banner Publ’g Co., 513 U.S. 352, 357 (1995). 

Indeed, GEICO’s position defies the statutory text 

and purpose. The FCRA’s definition of an adverse action 

focuses on whether the credit report had a negative effect on Edo’s insurance rate, not whether his rate nevertheless fell within some statistical median or “neutral” 

insurance rate for customers of similar backgrounds. 

GEICO’s after-the-fact evidence may speak to whether 

actual damages accrue, McKennon, 513 U.S. at 360-362, 

but it says nothing about whether an adverse action was, 

in fact, taken based on his credit report. 

Furthermore, the purpose of the adverse action notice 

is not to alert consumers only when a report is below 

average; it is to advise any affected consumer that the 

information in his report is not as good as it might be and 
28

that the deficiency has had material consequence. Under 

the FCRA, each consumer plays a pivotal role in assuring the accuracy of his or her consumer report and 

thereby contributes to the integrity of the system as a 

whole. See Philbin v. Trans Union Corp., 101 F.3d 957, 

962 (3d Cir. 1996) (noting “the detrimental effects inaccurate information can visit upon both the individual consumer and the nation’s economy as a whole”). It is the 

adverse action notice that generally triggers the consumer’s role. In the absence of such notice, there may be 

nothing to alert the consumer to check the report and no 

information as to how to check a report. A consumer 

with perfect credit who should receive a discount, but 

instead is charged a higher rate based on a mistaken 

report that her credit is average is no less entitled to 

notice than a consumer with average credit who is 

charged a higher-than-average rate based on a mistaken 

report of a poor credit history. 

Moreover, the obligation to provide notice is a consequence GEICO chose for itself. Nothing in federal law 

requires insurance companies to use credit reports in 

setting their rates. The FCRA simply requires that, if an 

insurance company opts to use the credit reporting system and enjoy its benefits, it must also comply with the 

FCRA’s obligations. That ensures that the other side of 

the balance—the consumer’s interest in being alerted 

when his credit rating denies him a benefit and the financial system’s interest in ensuring the accuracy and integrity of consumer information—is maintained. 

Safeco’s and GEICO’s concerns (06-84 Pet. 24; 06-100 

Pet. 25-29) about the policy implications of applying the 

adverse action definition as it is written are neither wellfounded nor properly directed. For the past four years, 

GEICO has been providing the requisite notices, without 
29

any evidence of paralysis or unworkability induced by its 

compliance with the FCRA. 06-100 Pet. App. 14a. And 

in any event, petitioners could avoid the FCRA’s obligations by not relying upon credit reports. Beyond that, 

objections to the requirements of the FCRA should be 

directed to Congress. 

B. GEICO’s Erroneous Understanding Of The Adverse Action 

Provision Was Not Willful 

While GEICO erred in concluding that no adverse 

action report was required in Edo’s situation, the district 

court’s grant of summary judgment was proper because 

GEICO’s departure from the FCRA’s terms was not objectively reckless. The question whether an “increase[d]” charge can be made for any initial application 

for insurance was itself an issue of first impression, 06-

100 Pet. App. 17a, and the legal novelty of that question 

was compounded in Edo’s case because there was an alternative justification for the rate. 

In addition, the statutory text is not so pellucid on the 

question as to render GEICO’s position an extreme departure from the bounds of responsible judgment, as 

evidenced by the district court’s judgment in GEICO’s 

favor (06-100 Pet. App. 46a). See id. at 38a n.1 (describing GEICO’s arguments as “well-reasoned and thoughtful”). Generally, “[i]f judges * * * disagree on a [legal] 

question, it is unfair to subject [defendants] to money 

damages for picking the losing side of the controversy.” 

Wilson v. Layne, 526 U.S. 603, 618 (1999). Nor had the 

Commission provided specific formal guidance on the 

question. Cf. Thurston, 469 U.S. at 129-130 (airlines’ 

position not reckless where legal advice was sought and 
30

position was within the range of reason).24 Nothing in 

the statute’s text, its established interpretation, agency 

guidance, court decisions, or the facts of the situation 

made it apparent that there was an objectively high risk 

that GEICO’s construction of the law was wrong. As a 

result, GEICO’s position did not reflect such an extreme 

departure from the range of responsible judgment as to 

be either tantamount to a knowing violation of the law or 

to reflect such heedless disregard of its duty to comply 

with the law as to be commensurately culpable. 

CONCLUSION 

The judgment of the court of appeals in No. 06-84 

should be vacated and remanded, and the judgment in 

No. 06-100 should be reversed. 

Respectfully submitted. 

PAUL D. CLEMENT 

WILLIAM BLUMENTHAL Solicitor General 

General Counsel THOMAS G. HUNGAR 

JOHN F. DALY Deputy Solicitor General 

Deputy General Counsel for PATRICIA A. MILLETT

Litigation Assistant to the Solicitor

LAWRENCE DEMILLE-WAGMAN General 

Attorney 

Federal Trade Commission 

NOVEMBER 2006 

24 Commission staff had provided informal guidance advising that 

denying a new customer a better insurance rate wholly or partly 

because of information in the customer’s credit report is an adverse 

action. See Letter from Hannah Stires, FTC, to James Ball (Mar. 1, 

2000) <http://www.ftc.gov/os/statutes/fcra/ball.htm>. 
APPENDIX 

The following Sections are found in Title 15 of the 

United States Code. 

§ 1681. Congressional findings and statement of purpose 

(a) Accuracy and fairness of credit reporting 

The Congress makes the following findings: 

(1) The banking system is dependent upon fair and 

accurate credit reporting. Inaccurate credit reports 

directly impair the efficiency of the banking system, and 

unfair credit reporting methods undermine the public 

confidence which is essential to the continued functioning of the banking system. 

(2) An elaborate mechanism has been developed for 

investigating and evaluating the credit worthiness, 

credit standing, credit capacity, character, and general 

reputation of consumers. 

(3) Consumer reporting agencies have assumed a 

vital role in assembling and evaluating consumer credit 

and other information on consumers. 

(4) There is a need to insure that consumer reporting 

agencies exercise their grave responsibilities with 

fairness, impartiality, and a respect for the consumer’s 

right to privacy. 

(b) Reasonable procedures. 

It is the purpose of this title to require that consumer reporting agencies 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 

(1a) 
1 

2a 

to the confidentiality, accuracy, relevancy, and proper 

utilization of such information in accordance with the 

requirements of this title. 

§ 1681a. Definitions; rules of construction 

(a) Definitions and rules of construction set forth in 

this section are applicable for the purposes of this 

subchapter. 

(b) The term “person” means any individual, partnership, corporation, trust, estate, cooperative, association, 

government or governmental subdivision or agency, or 

other entity. 

(c) The term “consumer” means an individual. 

(d) Consumer report.— 

(1) IN GENERAL.—The term “consumer report” 

means any written, oral, or other communication of any 

information by a consumer reporting agency bearing on 

a consumer’s credit worthiness,1 credit standing, credit 

capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to 

be used or collected in whole or in part for the purpose 

of serving as a factor in establishing the consumer’s 

eligibility for— 

(A) credit or insurance to be used primarily 

for personal, family, or household purposes; 

(B) employment purposes; or 

(C) any other purpose authorized under 

section 1681b of this title. 

* * * * * 

So in original. Probably should be “creditworthiness,”. 
3a 

(k) ADVERSE ACTION.— 

(1) ACTIONS INCLUDED.—The term “adverse 

action”— 

(A) has the same meaning as in section 

1691(d)(6) of this title; and 

(B) means— 

(i) a denial or cancellation of, an increase in 

any charge for, or a reduction or other adverse or unfavorable change in the terms of 

coverage or amount of, any insurance, existing or applied for, in connection with the 

underwriting of insurance; 

(ii) a denial of employment or any other 

decision for employment purposes that adversely affects any current or prospective 

employee; 

(iii) a denial or cancellation of, an increase 

in any charge for, or any other adverse or unfavorable change in the terms of, any license 

or benefit described in section 1681b(a)(3)(D) 

of this title; and 

(iv) an action taken or determination that 

is— 

(I) made in connection with an application that was made by, or a transaction 

that was initiated by, any consumer, or in 

connection with a review of an account 

under section 1681b(a)(3)(F)(ii) of this 

title; and 

(II) adverse to the interests of the 

consumer. 
4a 

(2) APPLICABLE FINDINGS, DECISION S , 

COMMENTARY, AND ORDERS.—For purposes of any 

determination of whether an action is an adverse action 

under paragraph (1)(A), all appropriate final findings, 

decisions, commentary, and orders issued under section 

1691(d)(6) of this title by the Board of Governors of the 

Federal Reserve System or any court shall apply. 

* * * * * 

§1681b. Permissible purposes of consumer reports 

(a) In general 

Subject to subsection (c) of this section, any consumer 

reporting agency may furnish a consumer report under 

the following circumstances and no other: 

(1) In response to the order of a court having 

jurisdiction to issue such an order, or a subpoena 

issued in connection with proceedings before a Federal 

grand jury. 

(2) In accordance with the written instructions of the 

consumer to whom it relates. 

(3) To a person which it has reason to believe— 

(A) intends to use the information in connection 

with a credit transaction involving the consumer on 

whom the information is to be furnished and involving the extension of credit to, or review or collection 

of an account of, the consumer; or 

(B) intends to use the information for employment 

purposes; or 

(C) intends to use the information in connection 

with the underwriting of insurance involving the 

consumer; or 
5a

 (D) intends to use the information in connection 

with a determination of the consumer’s eligibility for 

a license or other benefit granted by a governmental 

instrumentality required by law to consider an 

applicant’s financial responsibility or status; or

 (E) intends to use the information, as a potential 

investor or servicer, or current insurer, in connection 

with a valuation of, or an assessment of the credit or 

prepayment risks associated with, an existing credit 

obligation; or 

(F) otherwise has a legitimate business need for 

the information— 

(i) in connection with a business transaction 

that is initiated by the consumer; or 

(ii) to review an account to determine whether 

the consumer continues to meet the terms of the 

account. 

(4) In response to a request by the head of a State 

or local child support enforcement agency (or a State 

or local government official authorized by the head 

of such an agency), if the person making the request 

certifies to the consumer reporting agency that— 

(A) the consumer report is needed for the 

purpose of establishing an individual’s capacity to 

make child support payments or determining the 

appropriate level of such payments; 

(B) the paternity of the consumer for the child 

to which the obligation relates has been established or acknowledged by the consumer in 

accordance with State laws under which the 

obligation arises (if required by those laws); 
6a 

(C) the person has provided at least 10 days’ 

prior notice to the consumer whose report is 

requested, by certified or registered mail to the 

last known address of the consumer, that the 

report will be requested; and 

(D) the consumer report will be kept confidential, will be used solely for a purpose described in subparagraph (A), and will not be used 

in connection with any other civil, administrative, 

or criminal proceeding, or for any other purpose. 

(5) To an agency administering a State plan under 

Section 454 of the Social Security Act (42 U.S.C. 

§ 654) for use to set an initial or modified child 

support award. 

* * * * * 

§ 1681m. Requirements on users of consumer reports 

(a) Duties of users taking adverse actions on basis of 

information contained in consumer reports

 If any person takes any adverse action with respect to 

any consumer that is based in whole or in part on any 

information contained in a consumer report, the person 

shall— 

(1) provide oral, written, or electronic notice of 

the adverse action to the consumer; 

(2) provide to the consumer orally, in writing, or 

electronically— 

(A) the name, address, and telephone number 

of the consumer reporting agency (including a 

toll-free telephone number established by the 

agency if the agency compiles and maintains 
1 

7a 

files on consumers on a nationwide basis) that 

furnished the report to the person; and 

(B) a statement that the consumer reporting 

agency did not make the decision to take the 

adverse action and is unable to provide the 

consumer the specific reasons why the adverse 

action was taken; and 

(3) provide to the consumer an oral, written, or 

electronic notice of the consumer’s right 

(A) to obtain, under section 612 [§ 1681j], a 

free copy of a consumer report on the consumer 

from the consumer reporting agency referred to 

in paragraph (2), which notice shall include an 

indication of the 60-day period under that 

section for obtaining such a copy; and 

(B) to dispute, under section 611 [§ 1681i], 

with a consumer reporting agency the accuracy 

or completeness of any information in a consumer report furnished by the agency. 

(b) Adverse action based on information obtained from 

third parties other than consumer reporting agencies 

(1) In general 

Whenever credit for personal, family, or household 

purposes involving a consumer is denied or the charge 

for such credit is increased either wholly or partly 

because of information obtained from a person other 

than a consumer reporting agency bearing upon the 

consumer’s credit worthiness,1

 credit standing, credit 

capacity, character, general reputation, personal characteristics, or mode of living, the user of such information 

So in original. Probably should be “creditworthiness,”. 
8a 

shall, within a reasonable period of time, upon the 

consumer’s written request for the reasons for such 

adverse action received within sixty days after learning 

of such adverse action, disclose the nature of the 

information to the consumer. The user of such information shall clearly and accurately disclose to the 

consumer his right to make such written request at the 

time such adverse action is communicated to the 

consumer. 

(2) Duties of person taking certain actions based on 

information provided by affiliate 

(A) Duties, generally

 If a person takes an action described in subparagraph (B) with respect to a consumer, based in whole 

or in part on information described in subparagraph 

(C), the person shall— 

(i) notify the consumer of the action, including 

a statement that the consumer may obtain the 

information in accordance with clause (ii); and 

(ii) upon a written request from the consumer 

received within 60 days after transmittal of the 

notice required by clause (i), disclose to the 

consumer the nature of the information upon 

which the action is based by not later than 30 

days after receipt of the request.

 (B) Action described 

An action referred to in subparagraph (A) is an 

adverse action described in section 1681a(k)(1)(A) of this 

title, taken in connection with a transaction initiated by 

the consumer, or any adverse action described in clause 

(i) or (ii) of section 1861a(k)(1)(B) of this title. 
9a 

(C) Information described 

Information referred to in subparagraph (A)— 

(i) except as provided in clause (ii), is 

information that— 

(I) is furnished to the person taking the 

action by a person related by common ownership or affiliated by common corporate 

control to the person taking the action; and 

(II) bears on the credit worthiness, credit 

standing, credit capacity, character, general 

reputation, personal characteristics, or mode 

of living of the consumer; and

 (ii) does not include 

(I) information solely as to transactions or 

experiences between the consumer and the 

person furnishing the information; or 

(II) information in a consumer report. 

(c) Reasonable procedures to assure compliance

 No person shall be held liable for any violation of this 

section if he shows by a preponderance of the evidence 

that at the time of the alleged violation he maintained 

reasonable procedures to assure compliance with the 

provisions of this section. 

(d) Duties of users making written credit or insurance 

solicitations on the basis of information obtained in 

consumer files 

(1) In general 

Any person who uses a consumer report on any 

consumer in connection with any credit or insurance 

transaction that is not initiated by the consumer, that 
2 

10a 

is provided to that person under section 1681b(c)(1)(B) 

of this title, shall provide with each written solicitation 

made to the consumer regarding the transaction a 

clear and conspicuous statement that— 

(A) information contained in the consumer’s 

consumer report was used in connection with the 

transaction; 

(B) the consumer received the offer of credit or 

insurance because the consumer satisfied the 

criteria for credit worthiness or insurability under 

which the consumer was selected for the offer; 

(C) if applicable, the credit or insurance may 

not be extended if, after the consumer responds to 

the offer, the consumer does not meet the criteria 

used to select the consumer for the offer or any 

applicable criteria bearing on credit worthiness2 

or insurability or does not furnish any required 

collateral; 

(D) the consumer has a right to prohibit 

information contained in the consumer’s file with 

any consumer reporting agency from being used 

in connection with any credit or insurance 

transaction that is not initiated by the consumer; 

and 

(E) the consumer may exercise the right 

referred to in subparagraph (D) by notifying a 

notification system established under section 

1681b(e) of this title. 

So in original. Probably should be “creditworthiness”. 
11a 

(2) Disclosure of address and telephone number; format 

A statement under paragraph (1) shall— 

(A) include the address and toll-free telephone number 

of the appropriate notification system established under 

section 1681b(e) of this title; and 

(B) be presented in such format and in such type size 

and manner as to be simple and easy to understand, as 

established by the Commission, by rule, in consultation 

with the Federal banking agencies and the National 

Credit Union Administration. 

(3) Maintaining criteria on file

 A person who makes an offer of credit or insurance to 

a consumer under a credit or insurance transaction 

described in paragraph (1) shall maintain on file the 

criteria used to select the consumer to receive the offer, 

all criteria bearing on credit worthiness or insurability, 

as applicable, that are the basis for determining whether 

or not to extend credit or insurance pursuant to the 

offer, and any requirement for the furnishing of 

collateral as a condition of the extension of credit or 

insurance, until the expiration of the 3-year period 

beginning on the date on which the offer is made to the 

consumer. 

(4) Authority of Federal agencies regarding unfair or 

deceptive acts or practices not affected 

This section is not intended to affect the authority of 

any Federal or State agency to enforce a prohibition 

against unfair or deceptive acts or practices, including 

the making of false or misleading statements in 

connection with a credit or insurance transaction that is 

not initiated by the consumer. 
12a 

(e) Red flag guidelines and regulations required 

(1) Guidelines 

The Federal banking agencies, the National Credit 

Union Administration, and the Commission shall jointly, 

with respect to the entities that are subject to their 

respective enforcement authority under section 1681s of 

this title— 

(A) establish and maintain guidelines for use by 

each financial institution and each creditor regarding 

identity theft with respect to account holders at, or 

customers of, such entities, and update such 

guidelines as often as necessary; 

(B) prescribe regulations requiring each financial 

institution and each creditor to establish reasonable 

policies and procedures for implementing the 

guidelines established pursuant to subparagraph (A), 

to identify possible risks to account holders or 

customers or to the safety and soundness of the 

institution or customers; and 

(C) prescribe regulations applicable to card issuers 

to ensure that, if a card issuer receives notification of 

a change of address for an existing account, and 

within a short period of time (during at least the first 

30 days after such notification is received) receives 

a request for an additional or replacement card for 

the same account, the card issuer may not issue the 

additional or replacement card, unless the card 

issuer, in accordance with reasonable policies and 

procedures— 

(i) notifies the cardholder of the request at the 

former address of the cardholder and provides to 
13a 

the cardholder a means of promptly reporting 

incorrect address changes; 

(ii) notifies the cardholder of the request by 

such other means of communication as the cardholder and the card issuer previously agreed to; or 

(iii) uses other means of assessing the validity 

of the change of address, in accordance with 

reasonable policies and procedures established by 

the card issuer in accordance with the regulations 

prescribed under subparagraph (B). 

(2) Criteria 

(A) In general 

In developing the guidelines required by paragraph 

(1)(A), the agencies described in paragraph (1) shall 

identify patterns, practices, and specific forms of 

activity that indicate the possible existence of identity 

theft. 

(B) Inactive accounts

 In developing the guidelines required by paragraph 

(1)(A), the agencies described in paragraph (1) shall 

consider including reasonable guidelines providing that 

when a transaction occurs with respect to a credit or 

deposit account that has been inactive for more than 2 

years, the creditor or financial institution shall follow 

reasonable policies and procedures that provide for 

notice to be given to a consumer in a manner 

reasonably designed to reduce the likelihood of identity 

theft with respect to such account. 

(3) Consistency with verification requirements 

Guidelines established pursuant to paragraph (1) shall 
14a 

not be inconsistent with the policies and procedures 

required under section 5318(l) of title 31. 

(f) Prohibition on sale or transfer of debt caused by 

identity theft 

(1) In general

 No person shall sell, transfer for consideration, or 

place for collection a debt that such person has been 

notified under section 605B has resulted from identity 

theft. 

(2) Applicability

 The prohibitions of this subsection shall apply to all 

persons collecting a debt described in paragraph (1) 

after the date of a notification under paragraph (1). 

(3) Rule of construction

 Nothing in this subsection shall be construed to 

prohibit— 

(A) the repurchase of a debt in any case in which 

the assignee of the debt requires such repurchase 

because the debt has resulted from identity theft; 

(B) the securitization of a debt or the pledging 

of a portfolio of debt as collateral in connection with 

a borrowing; or 

(C) the transfer of debt as a result of a merger, 

acquisition, purchase and assumption transaction, or 

transfer of substantially all of the assets of an entity. 

(g) Debt collector communications concerning identity 

theft

 If a person acting as a debt collector (as that term is 

defined in subchapter V of this chapter on behalf of a 

third party that is a creditor or other user of a consumer 
15a 

report is notified that any information relating to a debt 

that the person is attempting to collect may be 

fraudulent or may be the result of identity theft, that 

person shall— 

(1) notify the third party that the information may 

be fraudulent or may be the result of identity theft; 

and 

(2) upon request of the consumer to whom the debt 

purportedly relates, provide to the consumer all 

information to which the consumer would otherwise 

be entitled if the consumer were not a victim of 

identity theft, but wished to dispute the debt under 

provisions of law applicable to that person. 

(h) Duties of users in certain credit transactions 

(1) In general 

Subject to rules prescribed as provided in paragraph 

(6), if any person uses a consumer report in connection 

with an application for, or a grant, extension, or other 

provision of, credit on material terms that are materially 

less favorable than the most favorable terms available to 

a substantial proportion of consumers from or through 

that person, based in whole or in part on a consumer 

report, the person shall provide an oral, written, or 

electronic notice to the consumer in the form and 

manner required by regulations prescribed in 

accordance with this subsection. 

(2) Timing 

The notice required under paragraph (1) may be 

provided at the time of an application for, or a grant, 

extension, or other provision of, credit or the time of 

communication of an approval of an application for, or 
16a 

grant, extension, or other provision of, credit, except as 

provided in the regulations prescribed under paragraph (6). 

(3) Exceptions

 No notice shall be required from a person under this 

subsection if— 

(A) the consumer applied for specific material terms 

and was granted those terms, unless those terms 

were initially specified by the person after the 

transaction was initiated by the consumer and after 

the person obtained a consumer report; or 

(B) the person has provided or will provide a notice 

to the consumer under subsection (a) of this section 

in connection with the transaction. 

(4) Other notice not sufficient

 A person that is required to provide a notice under 

subsection (a) of this section cannot meet that requirement by providing a notice under this subsection. 

(5) Content and delivery of notice

 A notice under this subsection shall, at a minimum— 

(A) include a statement informing the consumer 

that the terms offered to the consumer are set 

based on information from a consumer report; 

(B) identify the consumer reporting agency 

furnishing the report; 

(C) include a statement informing the consumer 

that the consumer may obtain a copy of a consumer 

report from that consumer reporting agency 

without charge; and 
17a 

(D) include the contact information specified by 

that consumer reporting agency for obtaining such 

consumer reports (including a toll-free telephone 

number established by the agency in the case of a 

consumer reporting agency described in section 

603(p) of this title. 

(6) Rulemaking 

(A) Rules required

 The Commission and the Board shall jointly prescribe 

rules. 

(B) Content. 

Rules required by subparagraph (A) shall address, 

but are not limited to— 

(i) the form, content, time, and manner of delivery 

of any notice under this subsection; 

(ii) clarification of the meaning of terms used in 

this subsection, including what credit terms are 

material, and when credit terms are materially less 

favorable; 

(iii) exceptions to the notice requirement under this 

subsection for classes of persons or transactions 

regarding which the agencies determine that notice 

would not significantly benefit consumers; 

(iv) a model notice that may be used to comply with 

this subsection; and 

(v) the timing of the notice required under 

paragraph (1), including the circumstances under 

which the notice must be provided after the terms 

offered to the consumer were set based on information from a consumer report. 
18a 

(7) Compliance

 A person shall not be liable for failure to perform the 

duties required by this section if, at the time of the 

failure, the person maintained reasonable policies and 

procedures to comply with this section. 

(8) Enforcement 

(A) No civil actions

 Sections 1681n and 1681o of this title shall not apply 

to any failure by any person to comply with this section. 

(B) Administrative enforcement.

 This section shall be enforced exclusively under 

section 1681s of this title by the Federal agencies and 

officials identified in that section. 

§ 1681n. Civil liability for willful noncompliance 

(a) In general

 Any person who willfully fails to comply with any 

requirement imposed under this subchapter with 

respect to any consumer is liable to that consumer in an 

amount equal to the sum of— 

(1)(A) any actual damages sustained by the consumer 

as a result of the failure or damages of not less than 

$100 and not more than $1,000; or 

(B) in the case of liability of a natural person for 

obtaining a consumer report under false pretenses or 

knowingly without a permissible purpose, actual 

damages sustained by the consumer as a result of the 

failure or $1,000, whichever is greater; 
19a 

(2) such amount of punitive damages as the court may 

allow; and 

(3) in the case of any successful action to enforce any 

liability under this section, the costs of the action 

together with reasonable attorney’s fees as determined 

by the court. 

(b) Civil liability for knowing noncompliance

 Any person who obtains a consumer report from a 

consumer reporting agency under false pretenses or 

knowingly without a permissible purpose shall be liable 

to the consumer reporting agency for actual damages 

sustained by the consumer reporting agency or $1,000, 

whichever is greater. 

(c) Attorney’s fees

 Upon a finding by the court that an unsuccessful 

pleading, motion, or other paper filed in connection with 

an action under this section was filed in bad faith or for 

purposes of harassment, the court shall award to the 

prevailing party attorney’s fees reasonable in relation to 

the work expended in responding to the pleading, 

motion, or other paper. 

§ 1681o. Civil liability for negligent noncompliance 

(a) In general

 Any person who is negligent in failing to comply with 

any requirement imposed under this subchapter with 

respect to any consumer is liable to that consumer in an 

amount equal to the sum of 

(1) any actual damages sustained by the consumer 

as a result of the failure; and 
20a 

(2) in the case of any successful action to enforce 

any liability under this section, the costs of the action 

together with reasonable attorney’s fees as determined by the court. 

(b) Attorney’s fees

 On a finding by the court that an unsuccessful 

pleading, motion, or other paper filed in connection with 

an action under this section was filed in bad faith or for 

purposes of harassment, the court shall award to the 

prevailing party attorney’s fees reasonable in relation to 

the work expended in responding to the pleading, 

motion, or other paper. 

§ 1681p. Jurisdiction of courts; limitation of actions 

An action to enforce any liability created under this 

title may be brought in any appropriate United States 

district court, without regard to the amount in 

controversy, or in any other court of competent 

jurisdiction, not later than the earlier of— 

(1) 2 years after the date of discovery by the plaintiff 

of the violation that is the basis for such liability; or 

(2) 5 years after the date on which the violation that 

is the basis for such liability occurs. 

§ 1681q. Obtaining information under false pretenses 

Any person who knowingly and willfully obtains 

information on a consumer from a consumer reporting 

agency under false pretenses shall be fined under title 

18, imprisoned for not more than 2 years, or both. 
21a 

§ 1681r. Unauthorized disclosures by officers or 

employees 

Any officer or employee of a consumer reporting 

agency who knowingly and willfully provides 

information concerning an individual from the agency’s 

files to a person not authorized to receive that 

information shall be fined under Title 18, United States 

Code, imprisoned for not more than 2 years, or both. 

§ 1681s. Administrative enforcement 

(a) Enforcement by Federal Trade Commission. 

(1) Compliance with the requirements imposed under 

this subchapter shall be enforced under the Federal 

Trade Commission Act [15 U.S.C.A. 41 et seq.] by the 

Federal Trade Commission with respect to consumer 

reporting agencies and all other persons subject thereto, 

except to the extent that enforcement of the 

requirements imposed under this title is specifically 

committed to some other government agency under 

subsection (b) hereof. For the purpose of the exercise 

by the Federal Trade Commission of its functions and 

powers under the Federal Trade Commission Act, a 

violation of any requirement or prohibition imposed 

under this title shall constitute an unfair or deceptive 

act or practice in commerce in violation of section 5(a) of 

the Federal Trade Commission Act [15 U.S.C.A. 45(a)] 

and shall be subject to enforcement by the Federal 

Trade Commission under section 5(b) thereof [15 U.S.C. 

45(b)] with respect to any consumer reporting agency or 

person subject to enforcement by the Federal Trade 

Commission pursuant to this subsection, irrespective of 

whether that person is engaged in commerce or meets 
22a 

any other jurisdictional tests in the Federal Trade 

Commission Act. The Federal Trade Commission shall 

have such procedural, investigative, and enforcement 

powers, including the power to issue procedural rules in 

enforcing compliance with the requirements imposed 

under this title and to require the filing of reports, the 

production of documents, and the appearance of 

witnesses as though the applicable terms and conditions 

of the Federal Trade Commission Act were part of this 

title. Any person violating any of the provisions of this 

title shall be subject to the penalties and entitled to the 

privileges and immunities provided in the Federal Trade 

Commission Act as though the applicable terms and 

provisions thereof were part of this title. 

(2)(A) In the event of a knowing violation, which 

constitutes a pattern or practice of violations of this 

title, the Commission may commence a civil action to 

recover a civil penalty in a district court of the United 

States against any person that violates this title. In 

such action, such person shall be liable for a civil penalty 

of not more than $2,500 per violation. 

(B) In determining the amount of a civil penalty under 

subparagraph (A), the court shall take into account the 

degree of culpability, any history of prior such conduct, 

ability to pay, effect on ability to continue to do 

business, and such other matters as justice may require. 

(3) Notwithstanding paragraph (2), a court may not 

impose any civil penalty on a person for a violation of 

section 1681s-2(a)(1) of this title unless the person has 

been enjoined from committing the violation, or ordered 

not to commit the violation, in an action or proceeding 

brought by or on behalf of the Federal Trade Commission, and has violated the injunction or order, and 
23a 

the court may not impose any civil penalty for any 

violation occurring before the date of the violation of the 

injunction or order. 

(b) Enforcement by other agencies

 Compliance with the requirements imposed under this 

subchapter with respect to consumer reporting 

agencies, persons who use consumer reports from such 

agencies, persons who furnish information to such 

agencies, and users of information that are subject to 

subsection (d) of section 1681m of this title shall be 

enforced under 

(1) section 8 of the Federal Deposit Insurance Act [12 

U.S.C. 1818], in the case of— 

(A) national banks, and Federal branches and 

Federal agencies of foreign banks, by the Office of 

the Comptroller of the Currency; 

(B) member banks of the Federal Reserve System 

(other than national banks), branches and agencies of 

foreign banks (other than Federal branches, Federal 

agencies, and insured State branches of foreign 

banks), commercial lending companies owned or 

controlled by foreign banks, and organizations 

operating under section 25 or 25A of the Federal 

Reserve Act [12 U.S.C. 601 et seq., 611 et seq.], by 

the Board of Governors of the Federal Reserve 

System; and 

(C) banks insured by the Federal Deposit Insurance 

Corporation (other than members of the Federal 

Reserve System) and insured State branches of 

foreign banks, by the Board of Directors of the 

Federal Deposit Insurance Corporation; 
24a 

(2) section 8 of the Federal Deposit Insurance Act [12 

U.S.C. 1818], by the Director of the Office of Thrift 

Supervision, in the case of a savings association the 

deposits of which are insured by the Federal Deposit 

Insurance Corporation; 

(3) the Federal Credit Union Act [12 U.S.C. 1751 et 

seq.], by the Administrator of the National Credit Union 

Administration with respect to any Federal credit union; 

(4) subtitle IV of title 49, by the Secretary of 

Transportation, with respect to all carriers subject to 

the jurisdiction of the Surface Transportation Board; 

(5) part A of subtitle VII of title 49, by the Secretary 

of Transportation with respect to any air carrier or 

foreign air carrier subject to that part, and 

(6) the Packers and Stockyards Act, 1921 [7 U.S.C. 

181 et seq.] (except as provided in section 406 of that Act 

[7 U.S.C. 226, 227]), by the Secretary of Agriculture 

with respect to any activities subject to that Act. 

The terms used in paragraph (1) that are not defined in 

this subchapter or otherwise defined in section 3(s) of 

the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) 

shall have the meaning given to them in section 1(b) of 

the International Banking Act of 1978 (12 U.S.C. 3101). 

(c) State action for violations 

(1) Authority of States

 In addition to such other remedies as are provided 

under State law, if the chief law enforcement officer of 

a State, or an official or agency designated by a State, 

has reason to believe that any person has violated or is 

violating this title, the State— 
25a 

(A) may bring an action to enjoin such violation in 

any appropriate United States district court or in any 

other court of competent jurisdiction; 

(B) subject to paragraph (5), may bring an action on 

behalf of the residents of the State to recover— 

(i) damages for which the person is liable to such 

residents under sections 1681n and 1681o] as a result of the violation; 

(ii) in the case of a violation described in any of 

paragraphs (1) through (3) of section 1681s-2(c) of 

this title, damages for which the person would, but 

for section 1681s-2(c) of this title, be liable to such 

residents as a result of the violation; or 

(iii) damages of not more than $1,000 for each 

willful or negligent violation; and 

(C) in the case of any successful action under 

subparagraph (A) or (B), shall be awarded the costs 

of the action and reasonable attorney fees as determined by the court. 

(2) Rights of Federal regulators

 The State shall serve prior written notice of any action 

under paragraph (1) upon the Federal Trade Commission or the appropriate Federal regulator determined under subsection (b) of this section and provide 

the Commission or appropriate Federal regulator with 

a copy of its complaint, except in any case in which such 

prior notice is not feasible, in which case the State shall 

serve such notice immediately upon instituting such 

action. The Federal Trade Commission or appropriate 

Federal regulator shall have the right— 

(A) to intervene in the action; 
26a 

(B) upon so intervening, to be heard on all matters 

arising therein; 

(C) to remove the action to the appropriate United 

States district court; and 

(D) to file petitions for appeal. 

(3) Investigatory powers

 For purposes of bringing any action under this 

subsection, nothing in this subsection shall prevent the 

chief law enforcement officer, or an official or agency 

designated by a State, from exercising the powers 

conferred on the chief law enforcement officer or such 

official by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel 

the attendance of witnesses or the production of 

documentary and other evidence. 

(4) Limitation on State action while Federal action 

pending

 If the Federal Trade Commission or the appropriate 

Federal regulator has instituted a civil action or an 

administrative action under section 8 of the Federal 

Deposit Insurance Act [12 U.S.C. 1818] for a violation of 

this subchapter, no State may, during the pendency of 

such action, bring an action under this section against 

any defendant named in the complaint of the Commission or the appropriate Federal regulator for any 

violation of this title that is alleged in that complaint. 

(5) Limitations on State actions for certain violations 

(A) Violation of injunction required

 A State may not bring an action against a person 

under paragraph (1)(B) for a violation described in any 
27a 

of paragraphs (1) through (3) of section 1681s-2(c) of 

this title, unless— 

(i) the person has been enjoined from committing 

the violation, in an action brought by the State under 

paragraph (1)(A); and 

(ii) the person has violated the injunction. 

(B) Limitation on damages recoverable 

In an action against a person under paragraph (1)(B) 

for a violation described in any of paragraphs (1) 

through (3) of section 1681s-2(c) of this title, a State may 

not recover any damages incurred before the date of the 

violation of an injunction on which the action is based. 

(d) Enforcement under other authority

 For the purpose of the exercise by any agency 

referred to in subsection (b) of this section of its powers 

under any Act referred to in that subsection, a violation 

of any requirement imposed under this subchapter shall 

be deemed to be a violation of a requirement imposed 

under that Act. In addition to its powers under any 

provision of law specifically referred to in subsection (b) 

of this section, each of the agencies referred to in that 

subsection may exercise, for the purpose of enforcing 

compliance with any requirement imposed under this 

subchapter any other authority conferred on it by law. 

(e) Regulatory authority 

(1) The Federal banking agencies referred to in 

paragraphs (1) and (2) of subsection (b) of this section 

shall jointly prescribe such regulations as necessary to 

carry out the purposes of this subchapter with respect 

to any persons identified under paragraphs (1) and (2) 

of subsection (b) of this section, and the Board of 
28a 

Governors of the Federal Reserve System shall have 

authority to prescribe regulations consistent with such 

joint regulations with respect to bank holding companies 

and affiliates (other than depository institutions and 

consumer reporting agencies) of such holding companies. 

(2) The Board of the National Credit Union Administration shall prescribe such regulations as necessary to 

carry out the purposes of this subchapter with respect 

to any persons identified under paragraph (3) of 

subsection (b) of this section. 

(f) Coordination of consumer complaint investigations 

(1) In general

 Each consumer reporting agency described in section 

1681a(p) of this title shall develop and maintain procedures for the referral to each other such agency of any 

consumer complaint received by the agency alleging 

identity theft, or requesting a fraud alert under section 

1681c-1 of this title A or a block under section 1681c-2 of 

this title. 

(2) Model form and procedure for reporting identity theft

 The Commission, in consultation with the Federal 

banking agencies and the National Credit Union 

Administration, shall develop a model form and model 

procedures to be used by consumers who are victims of 

identity theft for contacting and informing creditors and 

consumer reporting agencies of the fraud. 

(3) Annual summary reports

 Each consumer reporting agency described in section 

1681a(p) of this title shall submit an annual summary 
29a 

report to the Commission on consumer complaints 

received by the agency on identity theft or fraud alerts. 

(g) FTC regulation of coding of trade names

 If the Commission determines that a person described 

in paragraph (9) of section 1681s-2(a) of this title has not 

met the requirements of such paragraph, the Commission shall take action to ensure the person’s compliance with such paragraph, which may include issuing 

model guidance or prescribing reasonable policies and 

procedures, as necessary to ensure that such person 

complies with such paragraph.