Court rules in favor of credit reporting agency Clarity in wrongful disclosure claim

By Dawn Geske | Apr 22, 2018

Consumer reporting agency Clarity Services, Inc. has been granted summary judgment in a case that alleged it was in violation of the Fair Credit Reporting Act (FCRA).

SAN FRANCISCO – Consumer reporting agency Clarity Services, Inc. has been granted summary judgment in a case that alleged it was in violation of the Fair Credit Reporting Act (FCRA). 

The case involves Joyce Benton, who filed a lawsuit against Clarity after she claimed it disclosed consumer information about her to two lenders – MobiLoans LLC, and Red Rock Tribal Lending LLC, according to the court order.

Clarity had contracts with the lenders that made the disclosure of her information to them a direct violation of the FCRA, Benton alleged. She also argued that because the two lenders were “arms of Native American tribes that did not waive their sovereign immunity,” it made the disclosure of information to them unlawful.

Benton claimed that because she was a resident of California, the contracts, if binding, were unenforceable. She argued that both MobiLoans and Red Rock are not licensed for lending in the state for consumer loans and offered interest rates that far exceeded the standards set by California law. 

Further, Benton contended that Clarity was in violation of the FCRA as MobiLoans and Red Rock allegedly authorized two service providers to have access to her information. According to Benton’s claims, this is a violation of the FCRA and Clarity was required by law to credential these two providers. 

District Judge Maxine Chesney disagreed, pointing out that the FCRA does not require consumer reporting agencies to credential agents. 

Chesney ruled in favor of Clarity, saying that it was informed about the dissemination of Benton’s information to agents with the service providers. These were two credentialed principals of the lenders MobiLoans and Red Rock, and no violation of the FCRA had occurred by Clarity. 

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