Despite No Identity Theft, Lost Personal Information is Basis for Violation of Credit Reporting Law

Credit Reporting FCRA ViolationsAlthough 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.

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Josef Culik

Josef Culik

Attorney Joe Culik has built his reputation on helping people and has dedicated his practice in Boston, Massachusetts to consumer protection, employee rights, and individual personal injury. Joe believes in standing up against bullies and entities who disregard the rights of the individual. He has a record of litigating aggressively for his clients’ rights and to obtain the best possible outcome. He has advocated for individuals against some of the largest companies in America and has a passion for helping people uphold their rights against impossible odds. He has filed both individual and class-action lawsuits against most of the major banks, against some of the biggest debt collectors and credit reporting agencies, as well as insurance companies and corporate employers. Contact Joe