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Financial Services Law Insights and Observations

District Court Upholds $60 Million Jury Verdict for Credit Reporting Agency’s Use of OFAC Alert

Courts FCRA OFAC Credit Reporting Agency Consumer Finance

Courts

On November 7, the Northern District Court of California upheld a $60 million jury verdict against a credit reporting agency regarding the use of its OFAC Alert (previously covered by InfoBytes). The verdict stems from a 2012 class action lawsuit in which the plaintiffs allege the defendant had failed to distinguish law-abiding citizens from drug traffickers, terrorists, and other criminals with similar names found on the Treasury Department’s OFAC database. Following the defendants motion for judgment as a matter of law or a new trial, the district court agreed with the jury’s findings that the defendants (i) “willfully fail[ed] to follow reasonable procedures to assure the maximum possible accuracy of the OFAC information it associated with members of the class’’; (ii) “willfully failed to clearly and accurately disclose OFAC information in the written disclosures it sent to members of the class”; and (iii) “failed to provide class members a summary of their FCRA rights with each written disclosure made to them.”

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