On June 4, 2007 in Safeco Ins. Co. of America v. Burr the Supreme Court ruled that that to recklessly ignore notice obligations set forth in the Fair Credit Reporting Act can make it so that the consumer is eligible for damages and thereby reversed the law established by the Seventh Circuit Court. The latter mentioned case is a merging of a total of two suits concerning insurance companies that did not notify insurance customers that insurance rates covering the consumer's automotive needs were established on data derived from the consumer's credit report. According to the Fair Credit Reporting Act consumers are to be notified if a credit report results in adverse determinations and actions as a direct result of said reports. Furthermore, if the failure to send consumers such notification is a deliberate act, the consumers that have been affected by such action are, in turn, eligible to receive actual, statutory and punitive damages.
The District Court provided a summary judgment in the Safeco Ins. Co. of America v. Burr case, and held that the initial rate offering made by an insurance company cannot be regarded as adverse action. In turn, the Ninth Circuit Court reversed the summary judgment. Later, Justice David H. Souter of the Supreme Court offered a majority decision stating that the willful or deliberate failure of not sending a notice to consumers affected by a credit report rating falls under the Fair Credit Reporting Act's definition of reckless. In the case, two insurance companies, GEICO and SAFECO and their actions had come into question. It was determined that GEICO had not violated any laws, and SAFECO did not behave in a reckless fashion.
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