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Prescreening Litigation
FCRA Litigation
Recently, litigation involving prescreening practices and the Fair Credit Reporting Act (FCRA)
has become a significant issue for the consumer lending industry. More than 150 class actions
have been filed in federal court—there were more than 15 new cases in the first quarter of
2007 alone. These cases typically allege that prescreened solicitations do not meet the
“firm offer of credit” requirements, as mandated by the FCRA.
For information on these recent cases by jurisdiction, offer type, and plaintiff law firm,
please visit: Prescreening cases.
Insights into the Economics of Prescreening
Economists can help explore the impacts of prescreening on consumers and lenders by modeling
and analyzing company, market, and respondent data. Bates White has been following developments
related to FCRA “firm offer of credit” litigation closely. We believe that insight
and analysis based on several economic principles could help frame the issues by closely
examining the impact of prescreening on:
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Competition |
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Consumers’ pricing fees |
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Product selection |
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Search costs |
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Credit availability for subprime consumers |
Expert economic analyses on these topics could supplement litigation strategies for the
purpose of trial testimony, written expert reports, discovery support, class certification
motions, and mediation and negotiation support.
Bates White’s Experience
Bates White experts have submitted oral and written testimony in numerous consumer finance
cases. Our Consumer Finance Practice includes individuals with significant industry experience
in the mortgage lending sector (fair lending, regulatory reviews, disparate impact litigation),
auto finance sector (portfolio transfer litigation, portfolio valuation and due diligence), and
credit card sector (credit scoring models and antitrust analyses). The head of our Consumer
Finance Practice, Matthew Long, worked for a top-10
consumer finance company managing prescreening strategies.
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