­­­­­­­What is behavioral data really? And where does it stand in relation to the FCRA? In this recent ruling out of the Central District of California, Tailford v. Experian Info. Sols., Inc., 2020 U.S. Dist. LEXIS 84658, the putative class of plaintiffs defined behavioral data as “non-traditional consumer data such as household income and purchase history,” and argued that Experian, as a consumer reporting agency (“CRA”)  is required to disclose all such data IF it “might be” furnished in a consumer credit report. Plaintiffs argued that the behavioral data that Experian sold to its affiliates and third parties through a credit product called “OmniView,” should have been included by Experian in plaintiffs’ consumer reports. By not disclosing the behavioral data in the consumer reports, Experian violated the FCRA. Experian, in response, argued that the behavioral data “does not bear on a consumer’s eligibility for credit, employment, or insurance, [and] its transmission does not constitute a consumer report,” and therefore should not be considered part of the plaintiffs’ respective files, or required to be disclosed. The Court agreed.

Experian’s response comes directly from the Court’s reasoning in Shaw v. Experian Info. Sols. Inc. (9th Cir. 2018) 891 F.3d 749., where the Court rejected an assertion that Experian was required to disclose upon a consumer request that Fannie Mae had mishandled its data because it was “not information retained by Experian in any credit report [and therefore,] falls outside the bounds of a ‘file’ for purposes of section 1681g(a).” Similarly here, Experian argued, the behavioral data is not alleged to be information retained for use in a credit report and therefore is not part of the consumer file. Agreeing with Experian, the Court stated: “Shaw’s definition of a consumer file “does not open the door for every shred of information to be included in a consumer disclosure simply because there is some slight chance it might someday be in a consumer report.”” Plaintiffs’ allegation that behavioral data “might be furnished” was considered mere speculation, and not sufficient to survive a cause of action under the FCRA disclosure requirement. Plaintiffs had to show that Experian included such information in a consumer report in the past OR plan to do so in the future. However, no such allegations existed in the complaint as to the behavioral data at issue. The Court granted Experian’s motion to dismiss plaintiffs’ claim.

The Court’s ruling is a refreshing reminder that even if a CRA is handling multiple consumer data services, there is clear divide between products that are regulated by the FCRA and those that are not. Thus, consumer information collected or provided for purposes other than those expressly covered under the FCRA are not regulated by the FCRA merely because they are being handled by an entity that performs traditional CRA functions as well, and merely because such information might be included in a consumer file. As long as the data has not been furnished in a “consumer report,” and is not intended to be furnished in a “consumer report,” there is no obligation to disclose such information in an FCRA consumer report. And although “behavioral data” is not defined under the FCRA, it is distinguished as separate from the consumer data that is covered by the FCRA as long as it is not being furnished in a consumer report.

Plaintiffs also claimed that Experian violated section 1681g by failing to include all consumer report inquiries regarding the plaintiffs, and names of all persons who had submitted such inquiries for the one-year period preceding the date of the request. However, plaintiffs needed more than just a cursory allegation that the inquiries made to Experian were for “consumer reports” such that they would have been required to be disclosed in a section 1681g disclosure.  Because the plaintiffs did not offer any facts to support why the inquiries in question were for consumer reports, the Court dismissed the claim.

Plaintiffs finally also alleged that Experian was required to disclose the “employment dates” it had allegedly stored related to consumers. Plaintiffs did not allege that the employment dates had ever appeared on or might appear on a consumer report. Instead, plaintiffs alleged that they are entitled to “all” section 1681g disclosures and that although the disclosures they received listed several current or former employers they did not disclose “any of the reported dates of employment,” which were required. The Court was not convinced here either. Mere speculation of what information a CRA holds is insufficient to allege that they are concealing that information, especially when such information has never been disclosed in a consumer report.

All the information at issue in this case was information that could have been useful in a consumer report, and IF Experian had in fact used that information in a consumer report, it would have to be disclosed under the FCRA requirements. However, mere speculation that Experian sold information for use in identifying consumers for marketing, and not for use in determining eligibility for credit (and presumably not for any of the other permissible purposes), was insufficient to survive a cause of action under the FCRA. Plaintiffs were granted leave to amend, so we may be seeing more unfold on this, and maybe an answer to the potential controversy around CRA’s furnishing behavioral data in consumer reports?!