On February 7, 2019, AllianceOne Receivables Management, Inc. (“AllianceOne”), a debt collector, agreed to pay $2.2 million to settle a nationwide class action alleging violations of the Fair Credit Reporting Act (“FCRA”) for obtaining consumer reports on individuals with outstanding parking tickets without a permissible purpose.
The parties moved to approve the settlement after more than three years of litigation and propose that AllianceOne will pay $2.2 million to a class fund, plus $5,000 to the named Plaintiff and up to $733,333.33 in attorney’s fees. The settlement follows the district court’s grant of partial summary judgment in Plaintiff’s favor and certification of a nationwide class of individuals.
In the case, Rodriguez v. AllianceOne, filed in 2015 in the United States District Court for the Western District of Washington, Rodriguez alleged that AllianceOne’s purpose in pulling consumer reports on individuals with outstanding parking tickets – to obtain contact information and identify assets – was not “permissible” under § 1681b of the FCRA.
The District Court agreed with Rodriguez’s theory, granting partial summary judgment in his favor, finding that AllianceOne did not have a permissible purpose to obtain consumer reports under § 1681b because a vehicle parking violation is not a credit transaction “initiated” by a consumer. However, the District Court also held that Rodriguez failed to prove any actual damages; thus, leaving only the possibility of statutory damages based on a willful violation of the FCRA. The Court further found that whether AllianceOne’s conduct was “willful” is a question of fact for the jury.
Recognizing that “there is no assurance that the jury would find a willful violation,” the parties agreed to settle the case on a class-wide basis and moved for approval of the class settlement. The certified class contains nearly 15,000 people. Assuming no opt-outs, the proposed settlement contemplates about $98 per class member for the alleged FCRA violation. This nears the minimum statutory penalty of $100 for a willful violation of the FCRA but is far less than the maximum penalty of $1,000 per violation. The District Court is expected to approve the settlement.