Alert

Court Rejects Conclusory Allegations of Willful Violations for FCRA Claims

December 5, 2024

A United States Magistrate Judge for the U.S. District Court for the Northern District of Georgia found that the Plaintiff’s claim arising under the Fair Credit Reporting Act (FCRA) was not sufficiently alleged but stopped short of recommending a Defendant’s motion to dismiss be granted. Instead, it was recommended that the pro se plaintiff be directed to file an amended complaint describing in greater detail how the defendant acted willfully when accessing the Plaintiff’s consumer report.

Case Background

The Plaintiff filed a complaint asserting FCRA claims and alleging unauthorized inquiries into her credit report without a permissible purpose. She alleged that Transunion generated and maintained a consumer report pertaining to her and that she observed in the report an unauthorized inquiry by the defendant. The Plaintiff also alleged that the Defendant had no existing business relationship, contractual obligation, or any other transactions with the Plaintiff such that an inquiry into her credit would be permissible under the FCRA. The Plaintiff alleged that the Defendant either was or should have been aware of their obligation under the FCRA to access consumer reports only for permissible purposes.

In addition, the plaintiff alleged that the Defendant either intentionally or recklessly disregarded its obligation to access consumer reports for permissible purposes only and that the defendant’s violation was part of a pattern or practice. Finally, the plaintiff alleged various injuries resulting from the Defendant’s conduct.

The Defendant moved for dismissal of the complaint, arguing that the Plaintiff’s FCRA claims are time-barred and that the Plaintiff failed to state a valid claim under the FCRA.

Court’s Analysis

The court first looked at the Defendant’s arguments regarding the timeliness of the Plaintiff’s FCRA claims and ultimately rejected this argument because “[t]aking as true Plaintiff’s allegation that she generated the report on January 1, 2023, as Plaintiff alleges in her Complaint . . . the Court finds that Defendant has not shown that Plaintiff’s claim is barred by the statute of limitations.”

Next, the court analyzed the Defendant’s argument that the Plaintiff failed to state a valid claim under § 1681b(f) of the FCRA. The court noted the elements for a violation of this section and that “a plaintiff must assert factual allegations that: (1) there was a consumer credit report; (2) the defendant used or obtained the credit report; (3) the defendant did so without a permissible statutory purpose; and (4) the defendant acted with the specified level of culpability, which is willfulness under § 1681(n) and negligence under § 1681(o).”

The court found the majority of these elements sufficiently pled but took issue with the fourth element – the defendant’s mental state.  The court noted, “‘[i]n pleading willfulness, a party may “generally” allege the Defendant’s state of mind’; however, ‘[t]his does not mean that the Plaintiff may make a conclusory allegation that Defendant acted willfully or may otherwise plead the bare elements of the claim.’” Ultimately, the court found the Plaintiff’s allegations that the defendant willfully violated the FCRA “are nothing more than conclusory.”

Specifically, the Plaintiff alleged that the Defendant “was aware or should have been aware of their obligation under the FCRA to access consumer reports only for permissible purposes” and that, “despite this knowledge, [Transworld] intentionally or recklessly disregarded their obligation under the FCRA and did not verify a purported debt or take other actions that would constitute a permissible purpose for accessing Plaintiff’s consumer report.” The court stated that “[r]ather than demonstrate how or why Transworld’s actions were willful through the pleading of concrete facts that plausibly suggest a willful violation, Plaintiff offers allegations simply stating that Transworld’s actions were willful.”

Rather than recommending dismissal, the Magistrate Judge recommended the pro se Plaintiff be given an opportunity to amend her pleadings, reminding the Plaintiff that “conclusory assertions of wrongdoing with no supporting factual allegations will be insufficient to state a claim for relief.”

Key Takeaway

Marion v. Transworld Sys. Inc.¹ highlights the importance of challenging inadequately pled allegations regarding the requisite mental state for a Section 1681b(f) FCRA claim. A plaintiff’s failure to demonstrate how or why a defendant’s actions were willful, and instead, simply offering allegations stating a defendant’s actions were willful, justifies moving for dismissal.

1. Marion v. Transworld Sys. Inc., No. 1:23-CV-05916-MLB-JCF, 2024 WL 4649362, at *7 (N.D. Ga. Sept. 18, 2024)