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Standing to Sue Under the FCRA Requires Actual Harm

The United States Court of Appeals for the Sixth Circuit, in a case spanning fourteen years, has held that consumers alleging a violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C.A. § 1681e(b), must allege actual harm to sue under the statute.  A claim for statutory damages can not be based on an alleged increased risk of harm, only “a harm that actually happened.”  Beaudry v. TeleCheck Services Inc. et al.

Defendant TeleCheck provides a service to businesses, matching customers’ driver’s license numbers to their check writing histories to determine whether the business should accept the customers’ checks.  In 2002, Tennessee changed its numbering system for driver’s licenses, and TeleCheck’s system did not link customers’ old license numbers with the new ones.  This made some Tennessee residents appear to have no check writing history, leading TeleCheck to recommend that businesses decline those customers’ checks.

Plaintiff Beaudry sued TeleCheck in the Middle District of Tennessee, accusing the company of failing to use reasonable procedures to ensure accuracy of its check recommendations in violation of the FCRA.  The District Court dismissed the complaint in 2008, holding that, without an allegation that Beaudry had a check declined due to a recommendation from TeleCheck, Beaudry lacked standing to pursue her claims.  The Sixth Circuit reversed and remanded, holding that a technical violation of the FCRA provided standing and could lead to statutory damages.

After remand, however, the United States Supreme Court held in Spokeo Inc. v. Robins that a bare procedural violation of the FCRA is inadequate to create standing.  After the District Court granted summary judgment to TeleCheck, Beaudry again appealed.

This time, fourteen years after the case was filed, the Sixth Circuit affirmed the District Court’s dismissal of Beaudry’s claims.  Because Beaudry did not provide evidence that any of her checks were rejected based on a recommendation from TeleCheck, she lacked standing to pursue her claims.  Beaudry’s allegedly increased risk of harm was not sufficient, as under Spokeo statutory damages can only remedy “harm that actually happened.”

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