The Fair Credit Reporting Act (the "FCRA") states that "Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." This is the basic standard set for consumer reports (commonly known as "credit reports"). The courts have interpreted this provision of the FCRA to mean that the obligation on the agencies focuses on whether the consumer reporting agency followed "reasonable procedures to assure maximum possible accuracy," not whether the consumer report is absolutely accurate.
The Commentary to the Fair Credit Reporting Act further suggests that the FCRA “does not require error free consumer reports.” Instead, the FCRA does require the consumer reporting agency to have reasonable procedures to ensure that it “accurately transcribes, stores and communicates consumer information received from a source that it reasonably believes to be reputable, and which is creditable on its face .…” One federal circuit court has held that simply because a consumer report is inaccurate, it does not follow that FCRA has been violated and that the the issue is one of "reasonable procedures," which can be determined only in the context of the particular case.
For example, courts have found that reasonable procedures were not followed in situations where consumer reporting agencies: (1) spent little time investigating information and failed to check a second source when the information developed was adverse; (2) failed to use special care as to a consumer on whom inaccurate information had been received in the past; (3) used computer-generated reports where the identifiers used were not sufficiently distinct to ensure that information was displayed about only the consumer in question (as in the case of a mixed file or merged credit report); or (4) reported accurate but otherwise misleading information (especially when the information reported is incomplete).