The Eleventh Circuit resurrected a putative class action by holding that consumers need not prove actual damages in order to recover statutory damages based on alleged willful violations of the Fair Credit Reporting Act (“FCRA”).  See Santos v. Healthcare Revenue Recovery Grp., LLC., –F4th–, 2023 WL 7289662 (11th Cir. Nov. 6, 2023) (per curium).

Plaintiffs alleged that, beginning in 2017, defendant Healthcare Revenue furnished data concerning collection accounts from medical providers to defendant Experian.  Due to a technical error on the part of Experian, for a year and a half Experian caused inaccurate “dates of status” or “payment level dates” to appear on credit reports, impacting more than 2.1 million consumers.  Because the error caused the report to indicate collections had begun more recently than they actually had, plaintiffs alleged this “re-aging” of their collections by Experian established a willful violation of its FCRA obligations to follow reasonable procedures in creating consumer credit reports.

Experian successfully defeated a motion for class certification in the district court.  Relying on the Eleventh Circuit’s 1991 decision in Cahlin v. Gen. Motors Acceptance Corp., the district court found that plaintiffs still needed to establish an injury in order to recover statutory damages for willful FCRA violations.  Because plaintiffs could not show they had been denied credit and plaintiffs had failed to allege other kinds of harms uniformly suffered by the class, the district court denied class certification on predominance grounds because individualized inquiries would be necessary to determine whether class members had suffered actual damages. 

The Eleventh Circuit reached a different result.  In vacating the district court’s decision, the Court stressed that it decided Cahlin five years before the 1996 amendment to the FCRA which added a second option to recover “damages” between $100 and $1,000 to the preexisting remedy of actual damages.  Noting that the FCRA now allows recovery for “actual damages” or damages between $100 or $1000, the Court chose to read the second option as not requiring proof of any actual damages in order to give the two provisions separate meanings.  The Court further observed that while it had continued to cite Cahlin after the 1996 amendment, those subsequent cases did not require consumers to prove actual damages.

Santos adds to the growing body of case law establishing that actual damages do not need to be shown for willful violations of FCRA.  The Eleventh Circuit now joins every other federal appellate court to have considered the question, including the Fourth, Sixth, Seventh, Eighth, Ninth, and Tenth.  The growing consensus of the availability of statutory damages for willful violations of FCRA in the absence of proof of actual damages pose a significant litigation risk to companies subject to the FCRA.  Furthermore, this result may alter future litigation strategy, focusing more whether a violation was willful, as negligent violations do not have the statutory damages provision.