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On December 3, 2015, the Consumer Financial Protection Bureau (CFPB) announced an enforcement action against subprime credit reporting company Clarity Services, Inc. (Clarity), and its owner, Timothy Ranney (Ranney), for allegedly violating the Fair Credit Reporting Act (FCRA).

Clarity, a Florida-based credit reporting company with operations throughout the United States,  purchases consumer credit reports from other consumer credit reporting companies, adds additional information to them, and sells them to financial services providers.

The FCRA permits access to consumer credit reports only for a “permissible purpose,” such as a lender making an underwriting decision.  The CFPB’s alleges that Clarity and Ranney violated the FCRA by

  • obtaining approximately 190,000 consumer credit reports from consumer credit reporting agencies—without a permissible purpose—for use in marketing for clients, which resulted in consumer credit files wrongly reflecting a permissible inquiry by a lender; and
  • failing to properly investigate consumer disputes and impermissibly pre-conditioning investigations on receipt of documents from consumers.

Clarity, Ranney, and the CFPB entered into a Stipulation and Consent to the Issuance of a Consent Order, whereby Clarity and Ranney consented to the CFPB entering an administrative Consent Order against them in order to resolve the alleged FCRA violations.  Although Clarity and Ranney consented to the order, they neither admitted nor denied the allegations contained therein.  The Consent Order requires Clarity and Ranney to

  • stop illegal credit reporting practices, including pulling consumer reports and selling them to third-parties who lack a permissible purpose;
  • improve policies and procedures, including employee training, to ensure users of consumer credit reports have a permissible purpose;
  • improve policies and procedures, including employee training, to ensure full investigations are conducted when they are notified of consumer disputes, including disputes regarding unauthorized access to credit reports; and
  • pay an $8 million civil penalty.

You can view the CFPB Consent Order here:


Stinson Leonard Street LLP provides sophisticated transactional and litigation legal services to clients ranging from individuals and privately held enterprises to national and international public companies. As one of the 100 largest firms in the U.S., Stinson Leonard Street has offices in 14 cities, including Minneapolis, Mankato and St. Cloud, Minn.; Kansas City, St. Louis and Jefferson City, Mo.; Phoenix, Ariz.; Denver, Colo.; Washington, D.C.; Decatur, Ill.; Wichita and Overland Park, Kan.; Omaha, Neb.; and Bismarck, N.D.

Zane Gilmer is a member of the firm’s litigation practice group.  His practice focuses on business litigation and compliance and he is a member of the firm’s CFPB taskforce.  Zane works out of the firm’s Denver office and he can be reached at or 303.376.8416.

The views expressed herein are the views of the blogger and not those of Stinson Leonard Street or any client.