Despite No Identity Theft, Lost Personal Information is Basis for Violation of Credit Reporting Law
Although there was no actual identity theft that occurred when consumers’ sensitive personal information was stolen from a company, that company was still potentially liable for violating the Fair Credit Reporting Act, says a new Court of Appeals opinion. This type of personal data theft has occurred frequently over the last few years with companies like Target and others having sensitive customer information stolen such as credit card information, social security numbers, etc.
The company, a healthcare organization, had confidential information stolen from it by third parties. Consumers who were customers of the company sued, claiming that their information was inadequately protected. The plaintiffs had not suffered from invasion of privacy or identity theft.
The federal Fair Credit Reporting Act requires that credit reporting agencies — which the company was alleged to be — must have procedures in place to keep information safe.
Although a lower court dismissed the case, the Court of Appeals reversed it, holding that there was a “cognizable and concrete injury” that resulted from the unsafe recordkeeping that led to the data breach. Furthermore, the loss put the consumers at risk of “imminent, immediate” risk of harm.
Even though there was no actual identity theft or other problem that had yet occurred, the handling of the credit report information could still have been illegal, and there could have been a violation of the Fair Credit Reporting Act.
This decision shows how important it is for companies to keep consumer information protected. The risk of potential consequences, including identity theft, is such that any violation of the Fair Credit Reporting Act is potentially subject to legal action.
The decision is here: In re: Horizon Healthcare Services Data Breach Litigation
Culik Law had represented numerous consumers in credit-related issues. If you’re dealing with identity theft, or any other credit reporting problem, contact us to see if we can help.