by David A. Szwak, Esq., Shreveport, Louisiana

When faced with a potential Fair Credit Reporting Act case, it is crucial that you identify the correct statute(s) of limitation for claims against consumer reporting agencies and subscribers. The FCRA provides a two (2) year statute of limitation commencing from the date of the violation of the Act, regardless of whether the victim even knows of the violation. It is perhaps the least consumer-friendly provision of the anti-consumer FCRA.

How the Statute of Limitations Is Calculated

Where an action against a consumer reporting agency is lodged under the FCRA, it must be analyzed accordingly. If more than two years have tolled since the violation of the FCRA, then any cause of action as to that specific violation may be prescribed. If an action against the consumer reporting agency is based on state law theories, under 15 U.S.C. 1681h(e), then state law statute of limitations should be applied. Most subscribers are not directly subject to actions under the FCRA. However, if the subscriber violates the "user" provisions of the FCRA, then liability under the FCRA exists and suit on the cause of action for the violation of the FCRA must be brought within two (2) year statute of limitation commencing from the date of the violation of the Act. Again, if the action against the subscriber is a state law action, under 15 U.S.C. 1681h(e), then state law statute of limitations should be applied. The uniform rules applicable to the consumer reporting agencies under the FCRA do not apply to common law claims against the agencies, subscribers or other third parties. In federal court these state law claims would be covered by the "Erie" doctrine.

Exceptions to the Statute

A limited exception to the two year statute of limitation under the FCRA, 15 U.S.C. 1681p, exists. The "discovery rule" provides that commencement of the statute of limitation does not begin until the consumer knew or should have known of the issuance of the report or the injury was incurred. Some courts have held that the "discovery rule" only applies in cases where there ave been willful and/or intentional violations of the FCRA and does not apply to negligence actions. Some courts have held that the "discovery rule" only applies where the defendant materially and willfully misrepresented information. The court in Houghton v. Insurance Crime Prevention Institute, held that the exception to 15 U.S.C. 1681p requires plaintiff to prove that defendant materially and willfully misrepresented any information required to be disclosed to the consumer by the FCRA and the misrepresented information was material to the establishment of defendant's liability to plaintiff.

In Allen v. Equifax Credit Information Services, Inc., a prisoner sued Equifax for wrongfully providing his consumer report to the FBI. The Court dismissed his action finding that more than two years had passed "from the date on which liability arises." The "material and willful misrepresentation" exception is a limited exception to the jurisdictional statute, 15 U.S.C. 1681p. additional exception may not be implied. The Allen court concluded by commenting that the FCRA statute of limitations would toll even against an incarcerated person.

In Williams v. Avco, plaintiff sued Avco for impermissibly accessing his consumer report. Defendant raised the statute of limitations defense. The Court applied 15 U.S.C. 1681p, but found that the suit record was not clear as to when Avco "obtained" the consumer report thereby precluding summary judgment. The date Avco "obtained" the report is operative as the date of the violation of the FCRA.

Nonetheless, each transmission of the same credit report is a separate and distinct tort to which a separate statute of limitation applies. Defendant, who defames plaintiff, is liable for the harm from the initial reporting and any and all republications which were reasonably foreseeable.

As you can see, the statute of limitations provision under the FCRA can cause real problems for the consumer or his attorney. Cautiously determine each action you intend to bring and each FCRA violation you can prove. Once you determine the dates or "trigger points" for FCRA- based liability then count forward two years from the commencement or origination of liability and you should have your statute of limitation.