Today, the U.S. Supreme Court overturned two Ninth Circuit decisions that held insurers potentially liable under the Fair Credit Reporting Act for failing to give "adverse action" notices to customers.  The Court gave GEICO a full pardon because the company would have charged the plaintiff Ajene Edo the same premium even if it hadn’t considered his less-than-terrific credit score.  The Court thus concluded that GEICO fully complied with FCRA.  Safeco Ins. Co. of Am. v. Burr, No. 06-84 (U.S. June 4, 2007). 

In the case of Safeco, the Court decided that the company did violate the statute’s notice requirement but that "the company was not reckless in falling down in its duty."  Safeco didn’t give notice because it thought that the FCRA didn’t apply to "initial" applications for insurance.  The Court pointed to the "dearth of guidance [from the Federal Trade Commission] and the less-than-pellucid statutory text" as negating Safeco’s recklessness.

Blawgletter supposes that the Court has now made the FCRA "pellucid" for purposes of future violations.

Barry Barnett

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