Announced Action for February 24, 2004

Commission approval of amicus brief filing: The Commission has approved the filing of an amicus brief in Willes v. State Farm Fire and Casualty Co., et al. No 03-35848 (9th Cir.). At issue in this case is whether an insurer takes “adverse action” with respect to a consumer, as that term is defined in the Fair Credit Reporting Act (FCRA), if the insurer obtains the consumer’s credit report, and then, based on information in that report, offers insurance at a higher price or on more onerous terms than it would have offered if the information in the report had been more favorable. According to the brief, the Commission recommends that the Ninth Circuit reverse the district court’s interpretation of “adverse action.” The court should hold that an insurer takes “adverse action” if the insurer offers insurance at a higher price or on more onerous terms based on information in the consumer's credit report. If the decision is not reversed, the FTC contends, the district court’s narrow interpretation will prevail, leaving a loophole that would permit insurance companies to use consumer reports to make decisions unfavorable to consumers, without disclosing that fact to the consumers.

The Commission vote approving the filing of the amicus brief, which is available on the FTC Web site as a link to this release, was 5-0. (FTC File No. P042108; the staff contact is Lawrence DeMille-Wagman, Office of the General Counsel, 202-326-2448; see related press release issued January 23, 3004.)

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.