Background
Austin Fraase applied for a full-time maintenance technician position with the Fargo Parks District. The employer ordered a background check from Advantage Credit Bureau, which incorrectly reported a speeding ticket conviction in Austin’s record. The ticket actually belonged to Austin’s twin brother, Aaron, but appeared under Austin’s name because the North Dakota Courts’ website grouped the brothers together as aliases in a single “case jacket.”
Fargo Parks ordered a second background check that again showed the speeding ticket. However, during the hiring process, Austin explained that his brother received the ticket, and Fargo Parks offered him the job anyway, which he accepted and started as scheduled. Advantage mailed adverse action notices to Austin informing him of his right to dispute the reports under the Fair Credit Reporting Act (FCRA). Austin sued instead, claiming Advantage failed to follow reasonable procedures to assure maximum possible accuracy.
The Court’s Holding
The Eighth Circuit affirmed summary judgment for Advantage, holding that the credit reporting agency followed reasonable procedures under the FCRA. The court found that Advantage reasonably relied on the official North Dakota Courts’ website, which it viewed as a reputable source. When Advantage employees searched the website using Austin’s first name, last name, and date of birth, the system returned Aaron’s speeding ticket grouped with Austin’s information as an alias, and the employees reasonably reported what the court records indicated.
The court rejected Austin’s arguments on multiple grounds. First, absent evidence of systemic problems with the court website, Advantage was not required to investigate beyond the face of the court records or to question the reliability of an official public repository of court information. Second, Advantage’s reliance on the court website met its own policy of matching full names and dates of birth. Third, the presence of inconsistencies in the report—such as the speeding ticket in one section versus a clean driving record in another—did not constitute facial inaccuracies requiring deeper investigation, as the court noted such inconsistencies are “not uncommon” when different data vendors provide different report sections. The court did not address Austin’s damages claim, finding it unnecessary after determining Advantage followed reasonable procedures.
Key Takeaways
- Credit reporting agencies may reasonably rely on official court websites without conducting independent investigation absent notice of systemic problems with the source.
- The FCRA is not a strict liability statute; agencies are not liable for inaccurate information obtained from sources reasonably believed to be reputable.
- Credit reporting agencies need not establish special procedures to account for twins or similar names when they have no knowledge that a consumer is a twin.
- Inconsistencies between different sections of a background report (e.g., criminal records versus driving records) do not automatically impose a duty to investigate further, particularly when different data vendors supply different sections.
Why It Matters
This decision significantly protects credit reporting agencies from liability under the FCRA when they rely on reputable official sources like court websites. By holding that agencies need not conduct independent investigation or second-guess information provided by public court systems, the Eighth Circuit acknowledges practical limitations inherent in background check procedures. The decision sets a meaningful barrier to FCRA claims based on innocent mistakes originating in source data rather than in the agency’s procedures.
The ruling also clarifies that demanding credit reporting agencies investigate beyond the face of court records or implement special procedures for every possible scenario would substantially increase costs and burden the industry. For employers and individuals, the decision underscores that background check errors stemming from government records—particularly those grouping individuals together—may not provide a basis for FCRA recovery against the reporting agency, though other remedies (such as disputing the report directly) remain available.