What Is A “Legitimate Business Need” Under the FCRA? The Eleventh Circuit Provides A Critical Answer

In a new and critical ruling, the Eleventh Circuit Court of Appeals just held that business has a “legitimate business need” to pull a credit report any time it is responding directly to a consumer-initiated request—even if that consumer is not who he purports to be.  This ruling provides a much needed clarification to one of the Fair Credit Reporting Act’s (“FCRA”) most often used permissible purposes,  “legitimate business need.”

In Domante v. Dish Networks, L.L.C., No. 19-11100, 2020 U.S. App. LEXIS 28682, at *7-8 (11th Cir. Sept. 9, 2020), the Eleventh Circuit affirmed summary judgment for a satellite TV provider, finding that it had a “legitimate business need” for obtaining a consumer report to verify the identity of a person applying for satellite TV services.  This case, however, was not the first time the parties had encountered one another.  Prior to this suit, the plaintiff (a repeat victim of identity theft) and the defendant had settled a previous lawsuit stemming from the fraudulent use of the plaintiff’s identity to open an account with the defendant.  Pursuant to that settlement, the defendant agreed to flag any future applications using the plaintiff’s identity—specifically, the plaintiff’s first and last names, date of birth, and Social Security number—and preclude opening an account in plaintiff’s name.

Several years later, in the events that prompted this suit, someone attempted to fraudulently register for satellite TV services using a limited amount of the plaintiff’s personal information.  Specifically, the applicant provided only the last four digits of the plaintiff’s Social Security number, her date of birth, and her first name.  The applicant provided a different last name, address, and phone number.  The defendant’s automated system submitted this information to a consumer reporting agency, which matched the applicant’s information to the plaintiff’s information and returned to the defendant a consumer report for the plaintiff.  Upon receipt of the report and after realizing this connection, the defendant rejected the fraudulent application and requested that the consumer reporting agency delete the credit inquiry it made for the plaintiff. FULL ARTICLE