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The Supreme Court agreed Tuesday to hear arguments in a case that could make it easier for consumers to hold insurers, banks and other businesses liable for failing to notify them about adverse information in credit reports. The Fair Credit Reporting Act requires companies to notify consumers about rate increases based on information in consumer credit reports. In most federal courts, consumers alleging business violations of the disclosure requirements must show that businesses knew a failure to notify violated the law. The 9th U.S. Circuit Court of Appeals said last year that consumers do not need to demonstrate knowledge on the part of the companies. Consumers need to prove only that companies exhibited reckless disregard of the law’s requirements, the appeals court ruled in a class action lawsuit involving insurance companies. Four large insurance companies argued that notification is not required when applicants are asked to pay more on an initial insurance policy based on adverse information from a credit report. Offering a substandard rate when buying a policy does not qualify as an “increase” under the law unless a lower rate had been offered previously, the companies say. The Supreme Court agreed to take cases by two of the companies, Geico General Insurance Co. and Safeco Insurance Co. of America. The cases are Geico v. Ajene Edo, 06-100, and Safeco v. Charles Burr, 06-84. Copyright 2006 Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.

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