Virginia plaintiff who alleges Spokeo violates FCRA to get day in court

A federal lawsuit will now go forward to consider whether the company’s people profiles violate federal law.

As of this writing in September 2017, Americans are on alert that they cannot take their privacy rights for granted. Disturbingly, credit bureau Equifax just announced that a data breach exposed the private data of millions and millions of us to unscrupulous thieves. On the positive side, a Virginian who sued personal-information seller Spokeo in 2011 alleging violations of consumer protection laws will finally have the chance to have his claims heard by a federal jury.

Who is Spokeo?

According to spokeo.com, the Pasadena, California, company describes itself as a "people search engine that organizes white pages listings, public records and social network information into simple profiles to help you safely find and learn about people." It also states that "thousands of companies use Spokeo Enterprise."

According to the Los Angeles Times, Spokeo mines publicly available data to create in essence individual portfolios about people that are marketed to employers and lenders, entities that would like to know personal information about people before they invest in them.

The problem, according to the Times, is that it makes it "much harder for people to keep sensitive or embarrassing personal info under wraps." Also, Spokeo reportedly does not verify or guaranty the accuracy of any of the information it shares about people.

What are consumer reports and what does FCRA say about them?

As background, the federal Fair Credit Reporting Act or FCRA provides protections to consumers from the misuse by lenders, insurers and employers of credit reports and background checks, especially those that are inaccurate. FCRA calls these reports consumer reports.

The law has many layers of safeguards, with most concerning notice and disclosure, the right to correct inaccuracies, the right to notice of FCRA rights, prevention of illegal or discriminatory consumer-report uses, restriction on distribution and more. Reports that contain criminal records are subject to even more protections.

A consumer harmed because a party violated FCRA has the basis for a federal lawsuit for damages.

Robins v. Spokeo, Inc.

The Virginia plaintiff, Thomas Robins, filed his 2011 complaint in federal court in California, alleging that Spokeo's portfolios are consumer reports under FCRA and that the company violated the Act and other laws in its "collection, creation, and dissemination" of the reports, despite the company denying that it is a "consumer reporting agency." In particular, Spokeo markets its reports to employers.

According to the complaint, a Spokeo report not only contains information gleaned from other sources, but also draws conclusions from the data about the type of person the subject is, what he or she likes or cares about, and the state of his or her creditworthiness, wealth level and "economic health."

Robins alleges further that a "significant portion" of the material in the reports is inaccurate and has upset those described therein. He asserts that his data also contains errors.

Robins claims that the harm he has suffered is that the inaccurate report is available to prospective employers during a time that he is unemployed, harming his "employment prospects." He also alleges that he has been harmed by "anxiety, stress, concern, and/or worry about his diminished employment prospects."

It is the issue of whether his allegation of harm is enough on which to base the lawsuit that has held the case up. The original trial court threw out the case, but it was appealed all the way to the U.S. Supreme Court and back to the U.S. Court of Appeals for the 9th Circuit, which recently decided that the allegations of harm are strong enough for the case to go forward, sending it back to the U.S. District Court for trial.

Robins is also requesting that the case be certified as a class action so that others alleging similar harm by Spokeo may also be eligible for relief.

The FTC settlement

While Spokeo denies now that it is subject to FCRA, it settled charges for $800,000 by the Federal Trade Commission or FTC in 2012 that the company was a consumer reporting agency subject to the Act and that it's marketing to employers was a violation. However, that settlement did not mean that the company was admitting it violated the law.

Consumer advocates will watch this case with keen interest. A novel issue in this case is that Spokeo uses social media sites as an information source.

From his Manassas, Virginia, office, consumer protection lawyer Tom Breeden of Thomas R. Breeden, P.C., represents people who have had their consumer rights violated under state and federal laws.