Supreme Court Agrees to Hear Insurance Credit Score Cases

by Mike Bevel, CollectionIndustry.com

Like a tired but indulgent parent, the U.S. Supreme Court has agreed to hear one hour of oral arguments on insurers’ use of credit reports, based on appeals filed by Safeco Insurance Co. of America and GEICO General Insurance Co., among others.

At issue is whether insurers can be found liable for a “willful” violation of the Fair Credit Reporting Act (“FCRA”) when they do not notify consumers about how their credit ? good or bad ? affects their premium rates.

The Ninth Circuit had originally said ?yes;? the insurance industry has disagreed; and that?s what brought the issue before the Supreme Court.

According to the Supreme Court, a conflict exists between the Fourth, Fifth, Sixth, Seventh and Eight Circuit courts, and now the Third and Ninth Circuit Courts, over the mens rea, or criminal intent, required for a “willful” violation of FCRA.

The high court combined Safeco Insurance v. Burr, 06-84 and GEICO General Insurance v. Edo, 06-100 when it noted it would hear oral arguments.