In Patel v. Comcast Corporation, plaintiff consumer Mounang Patel brought a purported class action lawsuit against defendant Comcast Corporation, arguing that Comcast unlawfully obtains background checks (also referred to as consumer reports) on consumers under false pretenses. On July 17, Comcast moved to dismiss this class claim on the ground that Patel failed to allege that Comcast made any actionable misrepresentations regarding its reasons for obtaining a consumer report.
In the complaint, Patel alleged that he signed up for new Comcast cable service, which included his leasing of “valuable Comcast equipment.” In connection with his cable service, Comcast gave him the option of providing a $100 deposit for the leased equipment or, instead, having Comcast run a credit check. Because he was concerned about the impact a credit check would have on his impending home mortgage application, Patel alleges that he elected to provide the deposit to Comcast.
Despite his decision to place a deposit, Patel claims that Comcast ran a credit check on him anyway. According to Patel, this credit check lowered his credit score and impacted his ability to close on his mortgage loan. As a result, Patel filed a class action complaint against Comcast. In the first count of this complaint, Patel alleges that Comcast violated § 1681q of the Fair Credit Reporting Act by “knowingly and willfully obtaining information on [him] from a consumer reporting agency under false pretenses.”
On July 17, Comcast moved to dismiss Patel’s FCRA class claim. According to Comcast, a “false pretenses” claim requires Comcast to have made a false statement to the consumer reporting agency from whom it obtained the consumer report. In other words, the claim turns on what Comcast said to the consumer reporting agency, not the consumer. In Comcast’s view, because Patel claimed that Comcast made false representations to him, and not to the consumer reporting agency, he cannot state a claim under § 1681q.
In recent years, plaintiffs have begun bringing “false pretense” FCRA claims in situations where they would historically bring a “permissible purpose” claim. Companies that use consumer reports in their business should make sure that they have a permissible purpose to obtain the consumer reports. While the Patel decision indicates that Courts will trim overly aggressive plaintiffs’ claims, the core FCRA requirement of a permissible purpose stands.