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The Supreme Court in a unanimous decision overturned an appeals court ruling and found that Geico did not violate the Fair Credit Report Act by failing to let customers know that they pay higher rates due to low credit rating. In addition, the court found if Safeco did violate the law there was no intention to do so. Justice David Souter said that a “company’s conduct must entail an unjustifiably high risk of harm that is either known to a company or is so obvious that it should have been known.”
Published on June 5, 2007
The insurance industry claimed that should they be found in violation of the Act, it would cost the companies billions of dollars in punitive damages for failing to notify customers.
In overturning the appeals court, the Supreme Court adopted a notification requirement favored by the industry. The standard limits the circumstances in which customers must be told that their premiums are higher because of their credit ratings.
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