South-Western Legal Studies in Business

Class Action Certified against Lender for Violation of Fair Credit Reporting Act
Description Appeals court held that a consumer had the right to be granted class action status in a suit against a lender who improperly solicited for credit in violation of the Fair Credit Reporting Act.
Topic Consumer Protection
Key Words Fair Credit Reporting Act; Unsolicited Credit; Class Action
C A S E   S U M M A R Y
Facts Murray received a credit solicitation from GMAC, which had learned her name and address by asking credit bureaus to forward information about potential borrowers who met specific criteria. GMAC offered her a loan to be secured by a mortgage on her home. She sued, contending GMAC violated the Fair Credit Reporting Act because 1) GMAC had not made the “firm offer of credit” that is essential when a lender accesses someone’s credit history without consent, and 2) GMAC’s offer did not include a “clear and conspicuous” notice of recipient’s right to close her credit information to all who lacked her prior consent, as required by the Act. Murray proposed to represent a class of 1.2 million recipients of similar offers from GMAC, demanding statutory damages ranging from $100 to $1,000 per person. The district court denied the motion for class certification. Murray appealed.
Decision

Vacated and remanded. The substantial nature of the potential damages award, despite GMAC’s allegedly “technical” violations, was not a proper ground on which to deny class certification. The fact that Murray had been involved in numerous lawsuits seeking compensation for alleged FCRA violations did not justify denial of class treatment.

Citation Murray v. GMAC Mortgage Corp., 434 F.3d 948 (7th Cir., 2006)

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