Division I: Failure to Turn Over Credit Reporting Information Actionable Under Consumer Protection Act.
The Handlins applied for housing but were denied. They found out a report listed them as having been evicted, despite the court case for the same being resolved in their favor. After being denied after that, they sought to get all the information and ensure there were no other false things within On-Site's reporting system.
Unfortunately, On-Site did not turn over everything in response to the request for information. The Handlin's brought suit under the consumer protection act. The trial court dismissed the same because of a lack of injury to business or property. The Court of Appeals ruled that failing to provide the necessary information in response to a credit request is all that is needed to show the requisite injury. For starters, the Court noted that injury to business or property isn't the same as damages under other theories, they may be unquantifiable damages to business or property:
The central question here is whether the complaint sufficiently alleges an injury to business or property caused by On-Site's violations. The trial court recognized that On-Site's report to Forestview caused Forestview to delay offering the Handlins tenancy until itwas too late for them to accept it. As a result of Forestview's initial decision to deny their application, the Handlins did not get the apartment they wanted and they incurred expense and inconvenience finding another apartment before their lease ran out. But as the trial courtsaw it, their complaint did not allege that the situation with Forestview would have been resolved differently if On-Site had responded more promptly and completelyto the request for tenant screening information. The court dismissed "on the basis that the plaintiffs have not alleged an actual injury." . . .
The Court took the view that the real issue here is the failure to provide the information to the Handlin's, which is a deprivation of their property (the information) to which they are entitled under the Fair Credit Reporting Act. On-Site took the position that its not property, because the information was in an electronic file, and not a paper file. The Court, for obvious reasons, did not buy it:
This hypertechnical argument cannot sustain dismissal given Washington's liberal standard under CR 12(b)(6) and the mandate for liberal construction of the Consumer Protection Act. When a consumer reporting agency assembles information about a consumer's creditworthiness to sell to landlords like Forestview, the information has commercial utility for the consumer as well as for landlords. See RCW 19.182.005 (legislature declares "that consumers have a vital interest in establishing and maintaining creditworthiness.") The Fair Credit Reporting Act is designed to benefit consumers by giving them the same right of access to their credit information as is available to landlords, employers, or others who are evaluating their creditworthiness. The format in which the information is stored and disclosed is not material to the plaintiffs' pleading obligations under CR 12(b)(6).
The Handlins had a right to use and possess information in On-Site's files. On-Site's alleged violations of the Fair Credit Reporting Act deprived the Handlins of their right to obtain information that has commercial utility for them. Their complaint sufficiently alleges that On-Site's unfair trade practice caused them an actionable "injury" to "property" in the sense that those terms are used in the Consumer Protection Act. See Ambach. 167 Wn.2d at 172-77.
The Court of Appeals also said that the Handlin's were entitled to plead several forms of injunctive relief, including, for starters, actually being given their reporting information. On-Site claimed the Reporting Act doesn't allow injunctive relief. However, the Court pointed out that the Act does expressly allow Consumer Protection Act claims, and that the Consumer Protection Act does allow for injunctive relief.
So what does this mean for Washington businesses? If a business uses this reporting information, but does not disclose it under a request, can they be held liable under the Consumer Protection Act? Probably not. Under the FCRA, the only obligation of someone who bought one of the reports is to report where the report came from:
Adverse action based on report — Procedure — Notice.
If a person takes an adverse action with respect to a consumer that is based, in whole or in part, on information contained in a consumer report, the person shall:
(1) Provide written notice of the adverse action to the consumer, except verbal notice may be given by a person in an adverse action involving a business regulated by the Washington utilities and transportation commission if such verbal notice does not impair a consumer's ability to obtain a credit report without charge under RCW19.182.100(2); and
(2) Provide the consumer with the name, address, and telephone number of the consumer reporting agency that furnished the report to the person.
Now, if you're a reporting agency, on the other hand, you will need to make full disclosures, or risk responding to a Consumer Protection Act claim, which allows for attorney's fees and trebling of damages.