Court: False online profile lawsuit under FCRA can go forward

What would you do if an online profile about you was full of errors? Many people access these profiles -- employers, clients, landlords -- even creditors. If the information were significantly inaccurate it could seriously impact your life, couldn't it?

Whether the errors could cause real-world damage was in question before the U.S. Supreme Court last May. A man had brought a lawsuit under the Fair Credit Reporting Act, claiming willful violations. He was suing online profile aggregator Spokeo, claiming that his profile was wildly inaccurate. The high court sent the case back to the appeals court to determine whether he had suffered any real damages.

Now, the Ninth Circuit Court of Appeals has determined that the damage to his credit could be all too real, and they've allowed his case to move forward. Still at issue is whether a lower court will certify it as a class action. If a class action were successful against Spokeo, other online data providers could be exposed to mass claims.

Inaccurate data was not limited to erroneous ZIP codes

According to the plaintiff, the inaccuracies in his Spokeo profile were not limited to minor errors such as the stray ZIP code. The profile showed another person's photo and claimed the plaintiff was in his 50's, married with children, a holder of a graduate degree who was employed and affluent. None of this was true.

In the Supreme Court case, Justice Alito had pointed out that minor inaccuracies such as erroneous postal codes do not threaten any real harm to the subject's reputation. Without real harm, the plaintiff doesn't have any skin in the game, so the lawsuit would have to be dismissed.

This week, a three-judge panel of the Ninth Circuit ruled that the harm was "concrete and particularized" in the way necessary to sustain a lawsuit.

The errors alleged "do not strike us as the sort of mere technical violations which are too insignificant to present a sincere risk of harm to the real-world interests that Congress chose to protect with FCRA," reads the opinion. Moreover, "it does not take much imagination" to see how the plaintiff could have lost out on jobs, loans and more, considering how important online profiles have become in those processes. Therefore, the case can go forward.

Spokeo promises to defend itself vigorously in court. It also believes that the determination of each plaintiff's potential damages will have to be done on a case-by-case basis -- meaning that no class action would be possible.

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