Skip to content

Phillips v. Grendahl

Case URL: 

We have included this case, which does not directly involve a financial institution, because it provides a good opportunity to focus your attention on two factors: the need to guard against abuse of credit report access and the need to do background checks on prospective employees because people are not always what they appear to be.

What is of interest here is the attempt to use information from something like a credit report for a purely personal purpose. Financial institutions have faced liability in the past when employees have pulled credit reports for personal reasons unrelated to the institution. Make sure your employee training on this issue stresses that consumer reports may only be obtained for a "permissible purpose" as defined by the FCRA. The second point of interest is that the individual being investigated looked good on the surface, but may have had hidden flaws in his past, like bad check writing and delinquent child support. In the employment context, it is dangerous to make assumptions about background, character, and financial history. You can't believe everything an applicant says - whether orally or in a written application. Do background screening.

The Eighth U.S. Circuit Court of Appeals upheld the dismissal of the plaintiff's claim of violation of the Fair Credit Reporting Act but allowed the tort claim of Invasion of Privacy. A mother was suspicious of her daughter's fiancée and after doing some investigations, she hired a private investigator. The investigator utilized a service that "pulled" a "finder's report" on the suitor and passed the information on to the mother. The boyfriend sued the mother, private eye and the reporting service contending a claim for wrongful disclosure and invasion of privacy. The Court held that non-compliance under the applicable section of the FCRA required knowing and intentional commission of an act by the defendant who knew the act would violate the law.

Penalties View All

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Courtwatch