SAFECO INSURANCE COMPANY OF AMERICA et al. v. BURR et al.

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47 OCTOBER TERM, 2006
Syllabus
SAFECO INSURANCE COMPANY OF AMERICA
et al. v. BURR et al.
certiorari to the united states court of appeals for
the ninth circuit
No. 06–84. Argued January 16, 2007—Decided June 4, 2007*
The Fair Credit Reporting Act (FCRA) requires notice to a consumer
subjected to “adverse action . . . based in whole or in part on any infor
mation contained in a consumer [credit] report.” 15 U. S. C. § 1681m(a).
As applied to insurance companies, “adverse action” is “a denial or can
cellation of, an increase in any charge for, or a reduction or other ad
verse or unfavorable change in the terms of coverage or amount of, any
insurance, existing or applied for.” § 1681a(k)(1)(B)(i). FCRA pro
vides a private right of action against businesses that use consumer
reports but fail to comply. A negligent violation entitles a consumer to
actual damages, § 1681o(a), and a willful one entitles the consumer to
actual, statutory, and even punitive damages, § 1681n(a).
Petitioners in No. 06–100 (GEICO) use an applicant’s credit score to
select the appropriate subsidiary insurance company and the particular
rate at which a policy may be issued. GEICO sends an adverse action
notice only if a neutral credit score would have put the applicant in a
lower priced tier or company; the applicant is not otherwise told if he
would have gotten better terms with a better credit score. Respondent
Edo’s credit score was taken into account when GEICO issued him a
policy, but GEICO sent no adverse action notice because his company
and tier placement would have been the same with a neutral score. Edo
filed a proposed class action, alleging willful violation of § 1681m(a) and
seeking statutory and punitive damages under § 1681n(a). The District
Court granted GEICO summary judgment, finding no adverse action
because the premium would have been the same had Edo’s credit history
not been considered. Petitioners in No. 06–84 (Safeco) also rely on
credit reports to set initial insurance premiums. Respondents Burr and
Massey—whom Safeco offered higher than the best rates possible with
out sending adverse action notices—joined a proposed class action, al
leging willful violation of § 1681m(a) and seeking statutory and punitive
damages under § 1681n(a). The District Court granted Safeco summary
judgment on the ground that offering a single, initial rate for insurance
*Together with No. 06–100, GEICO General Insurance Co. et al. v. Edo,
also on certiorari to the same court.

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48 SAFECO INS. CO. OF AMERICA v. BURR
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cannot be “adverse action.” The Ninth Circuit reversed both judg
ments. In GEICO’s case, it held that an adverse action occurs when
ever a consumer would have received a lower rate had his consumer
report contained more favorable information. Since that would have
happened to Edo, GEICO’s failure to give notice was an adverse action.
The court also held that an insurer willfully fails to comply with FCRA
if it acts in reckless disregard of a consumer’s FCRA rights, remanding
for further proceedings on the reckless disregard issue. Relying on its
decision in GEICO’s case, the Ninth Circuit rejected the District Court’s
position in the Safeco case and remanded for further proceedings.
Held:
1. Willful failure covers a violation committed in reckless disregard
of the notice obligation. Where willfulness is a statutory condition of
civil liability, it is generally taken to cover not only knowing violations
of a standard, but reckless ones as well. See, e. g., McLaughlin v. Rich
land Shoe Co., 486 U. S. 128, 133. This construction reflects common
law usage. The standard civil usage thus counsels reading § 1681n(a)’s
phrase “willfully fails to comply” as reaching reckless FCRA violations,
both on the interpretive assumption that Congress knows how this
Court construes statutes and expects it to run true to form, see Com
missioner v. Keystone Consol. Industries, Inc., 508 U. S. 152, 159, and
under the rule that a common law term in a statute comes with a com
mon law meaning, absent anything pointing another way, Beck v.
Prupis, 529 U. S. 494, 500–501. Petitioners claim that § 1681n(a)’s draft
ing history points to a reading that liability attaches only to knowing
violations, but the text as finally adopted points to the traditional under
standing of willfulness in the civil sphere. Their other textual and
structural arguments are also unpersuasive. Pp. 56–60.
2. Initial rates charged for new insurance policies may be adverse
actions. Pp. 60–67.
(a) Reading the phrase “increase in any charge for . . . any insur
ance, existing or applied for,” § 1681a(k)(1)(B)(i), to include a disadvanta
geous rate even with no prior dealing fits with the ambitious objective
of FCRA’s statement of purpose, which uses expansive terms to de
scribe the adverse effects of unfair and inaccurate credit reporting and
the responsibilities of consumer reporting agencies. See § 1681(a).
These descriptions do nothing to suggest that remedies for consumers
disadvantaged by unsound credit ratings should be denied to first-time
victims, and the legislative histories of both FCRA’s original enactment
and a 1996 amendment reveal no reason to confine attention to custom
ers and businesses with prior dealings. Finally, nothing about insur
ance contracts suggests that Congress meant to differentiate applicants

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49 Cite as: 551 U. S. 47 (2007)
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from existing customers when it set the notice requirement; the newly
insured who gets charged more owing to an erroneous report is in the
same boat with the renewal applicant. Pp. 60–63.
(b) An increased rate is not “based in whole or in part on” a credit
report under § 1681m(a) unless the report was a necessary condition of
the increase. In common talk, “based on” indicates a but-for causal
relationship and thus a necessary logical condition. Though some tex
tual arguments point another way, it makes more sense to suspect that
Congress meant to require notice and prompt a consumer challenge only
when the consumer would gain something if the challenge succeeded.
Pp. 63–64.
(c) In determining whether a first-time rate is a disadvantageous
increase, the baseline is the rate that the applicant would have received
had the company not taken his credit score into account (the “neutral
score” rate GEICO used in Edo’s case). That baseline comports with
the understanding that § 1681m(a) notice is required only when the
credit report’s effect on the initial rate is necessary to put the consumer
in a worse position than other relevant facts would have decreed any
way. Congress was more likely concerned with the practical question
whether the consumer’s rate actually suffered when his credit report
was taken into account than the theoretical question whether the con
sumer would have gotten a better rate with the best possible credit
score, the baseline suggested by the Government and respondent
plaintiffs. The Government’s objection to this reading is rejected. Al
though the rate initially offered for new insurance is an “increase” call
ing for notice if it exceeds the neutral rate, once a consumer has learned
that his credit report led the insurer to charge more, he need not be
told with each renewal if his rate has not changed. After initial dealing
between the consumer and the insurer, the baseline for “increase” is the
previous rate or charge, not the “neutral” baseline that applies at the
start. Pp. 64–67.
3. GEICO did not violate the statute, and while Safeco might have, it
did not act recklessly. Pp. 67–70.
(a) Because the initial rate GEICO offered Edo was what he would
have received had his credit score not been taken into account, GEICO
owed him no adverse action notice under § 1681m(a). Pp. 67–68.
(b) Even if Safeco violated FCRA when it failed to give Burr and
Massey notice on the mistaken belief that § 1681m(a) did not apply to
initial applications, the company was not reckless. The common law
has generally understood “recklessness” in the civil liability sphere as
conduct violating an objective standard: action entailing “an unjustifia
bly high risk of harm that is either known or so obvious that it should
be known.” Farmer v. Brennan, 511 U. S. 825, 836. There being no

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50 SAFECO INS. CO. OF AMERICA v. BURR
Syllabus
indication that Congress had something different in mind, there is no
reason to deviate from the common law understanding in applying the
statute. See Beck v. Prupis, supra, at 500–501. Thus, a company does
not act in reckless disregard of FCRA unless the action is not only a
violation under a reasonable reading of the statute, but shows that the
company ran a risk of violating the law substantially greater than the
risk associated with a reading that was merely careless. The negli
gence/recklessness line need not be pinpointed here, for Safeco’s reading
of the statute, albeit erroneous, was not objectively unreasonable. Sec
tion 1681a(k)(1)(B)(i) is silent on the point from which to measure “in
crease,” and Safeco’s reading has a foundation in the statutory text and
a sufficiently convincing justification to have persuaded the District
Court to adopt it and rule in Safeco’s favor. Before these cases, no
court of appeals had spoken on the issue, and no authoritative guidance
has yet come from the Federal Trade Commission. Given this dearth
of guidance and the less-than-pellucid statutory text, Safeco’s reading
was not objectively unreasonable, and so falls well short of raising the
“unjustifiably high risk” of violating the statute necessary for reckless
liability. Pp. 68–70.
No. 06–84, 140 Fed. Appx. 746; No. 06–100, 435 F. 3d 1081, reversed and
remanded.
Souter, J., delivered the opinion of the Court, in which Roberts, C. J.,
and Kennedy and Breyer, JJ., joined, in which Scalia, J., joined as to
all but footnotes 11 and 15, in which Thomas and Alito, JJ., joined as to
all but Part III–A, and in which Stevens and Ginsburg, JJ., joined as to
Parts I, II, III–A, and IV–B. Stevens, J., filed an opinion concurring in
part and concurring in the judgment, in which Ginsburg, J., joined, post,
p. 71. Thomas, J., filed an opinion concurring in part, in which Alito, J.,
joined, post, p. 73.
Maureen E. Mahoney argued the cause for petitioners in
both cases. On the briefs in No. 06–84 were Michael K. Kel
logg, Sean A. Lev, Michael P. Kenny, Cari K. Dawson,
Susan H. Ephron, and Lisa E. Lear. With Ms. Mahoney on
the briefs in No. 06–100 were Richard P. Bress, Robert D.
Allen, Meloney Cargil Perry, Jay F. Utley, and Brandon
P. Long.
Patricia A. Millett argued the cause for the United States
as amicus curiae in both cases. With her on the brief were

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51 Cite as: 551 U. S. 47 (2007)
Counsel
Solici tor General Clement, Deputy Solici tor General
Hungar, John F. Daly, and Lawrence DeMille-Wagman.
Scott A. Shorr argued the cause for respondents in both
cases. With him on the brief were Robert A. Shlachter,
Steve D. Larson, and Scott L. Nelson.†
†Briefs of amici curiae urging reversal in both cases were filed for the
American Insurance Association by Seth P. Waxman, Noah A. Levine, J.
Stephen Zielezienski, and Allan J. Stein; for the Consumer Data Industry
Association by Anne P. Fortney; for Farmers Insurance Co. of Oregon
et al. by Theodore J. Boutrous, Jr., Gail E. Lees, Mark A. Perry, William
E. Thomson, Christopher Chorba, Barnes H. Ellis, and James N. West
wood; for the Financial Services Roundtable et al. by L. Richard Fischer,
Beth S. Brinkmann, Seth M. Galanter, Robin S. Conrad, and Shane Bren
nan; for Ford Motor Co. by David G. Leitch, John M. Thomas, Walter
Dellinger, and Matthew M. Shors; for the Freedomworks Foundation by
Gene C. Schaerr, Steffen N. Johnson, and Linda T. Coberly; for Mortgage
Insurance Cos. of America et al. by Thomas M. Hefferon, Richard M.
Wyner, Joseph F. Yenouskas, and Jeremiah S. Buckley; for the National
Association of Mutual Insurance Cos. by Sheila L. Birnbaum, Barbara
Wrubel, Douglas W. Dunham, and Ellen P. Quackenbos; for the Property
Casualty Insurers Association of America by Susan M. Popik and Merri
A. Baldwin; for Trans Union LLC by Michael O’Neil and Roger L. Long
tin; and for the Washington Legal Foundation by Daniel J. Popeo and
Richard A. Samp.
Briefs of amici curiae urging affirmance in both cases were filed for the
State of Oregon et al. by Hardy Myers, Attorney General of Oregon, Peter
Shepherd, Deputy Attorney General, Mary H. Williams, Solicitor Gen
eral, and Kaye E. McDonald, Assistant Attorney General, by Eugene
A. Adams, Interim Attorney General of the District of Columbia, and by
the Attorneys General for their respective States as follows: Terry God
dard of Arizona, Mike Beebe of Arkansas, Carl C. Danberg of Delaware,
Mark J. Bennett of Hawaii, Lisa Madigan of Illinois, Tom Miller of Iowa,
J. Joseph Curran, Jr., of Maryland, Mike Hatch of Minnesota, Jeremiah
W. (Jay) Nixon of Missouri, Mike McGrath of Montana, Eliot Spitzer of
New York, Jim Petro of Ohio, W. A. Drew Edmondson of Oklahoma,
Henry McMaster of South Carolina, Larry Long of South Dakota, Robert
E. Cooper, Jr., of Tennessee, Mark L. Shurtleff of Utah, William H. Sor
rell of Vermont, Darrell V. McGraw, Jr., of West Virginia, Peggy A. Lau
tenschlager of Wisconsin, and Patrick J. Crank of Wyoming; for Insurance
Commissioners of the State of Delaware et al. by Patrick T. Ryan, Jeanie
Kunkle Vaudt, Assistant Attorney General of Iowa, John W. Campbell,

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52 SAFECO INS. CO. OF AMERICA v. BURR
Opinion of the Court
Justice Souter delivered the opinion of the Court.*
The Fair Credit Reporting Act (FCRA or Act) requires
notice to any consumer subjected to “adverse action . . .
based in whole or in part on any information contained in a
consumer [credit] report.” 15 U. S. C. § 1681m(a). Anyone
who “willfully fails” to provide notice is civilly liable to the
consumer. § 1681n(a). The questions in these consolidated
cases are whether willful failure covers a violation com
mitted in reckless disregard of the notice obligation, and, if
so, whether petitioners Safeco and GEICO committed reck
less violations. We hold that reckless action is covered, that
GEICO did not violate the statute, and that while Safeco
might have, it did not act recklessly.
I
A
Congress enacted FCRA in 1970 to ensure fair and accu
rate credit reporting, promote efficiency in the banking sys
tem, and protect consumer privacy. See 84 Stat. 1128, 15
U. S. C. § 1681; TRW Inc. v. Andrews, 534 U. S. 19, 23 (2001).
The Act requires, among other things, that “any person [who]
takes any adverse action with respect to any consumer that
is based in whole or in part on any information contained in
a consumer report” must notify the affected consumer.1 15
John H. Clough, Michael W. Ridgeway, Rob McKenna, Attorney General
of Washington, and Christina Beusch, Assistant Attorney General of
Washington; and for the National Consumer Law Center, Inc., et al. by
Richard J. Rubin, Joanne S. Faulkner, and Elizabeth D. De Armond.
*Justice Scalia joins all but footnotes 11 and 15 of this opinion.
1 So far as it matters here, the Act defines “consumer report” as “any
written, oral, or other communication of any information by a con
sumer reporting agency bearing on a consumer’s credit worthiness, credit
standing, [or] credit capacity . . . which is used or expected to be used
or collected in whole or in part for the purpose of serving as a factor in
establishing the consumer’s eligibility for . . . credit or insurance to be
used primarily for personal, family, or household purposes.” 15 U. S. C.
§ 1681a(d)(1) (footnote omitted). The scope of this definition is not at
issue.

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U. S. C. § 1681m(a). The notice must point out the adverse
action, explain how to reach the agency that reported on the
consumer’s credit, and tell the consumer that he can get a
free copy of the report and dispute its accuracy with the
agency. Ibid. As it applies to an insurance company, “ad
verse action” is “a denial or cancellation of, an increase in
any charge for, or a reduction or other adverse or unfavor
able change in the terms of coverage or amount of, any insur
ance, existing or applied for.” § 1681a(k)(1)(B)(i).
FCRA provides a private right of action against busi
nesses that use consumer reports but fail to comply. If a
violation is negligent, the affected consumer is entitled to
actual damages. § 1681o(a) (2000 ed., Supp. IV). If willful,
however, the consumer may have actual damages, or statu
tory damages ranging from $100 to $1,000, and even punitive
damages. § 1681n(a) (2000 ed.).
B
Petitioner GEICO 2 writes auto insurance through four
subsidiaries: GEICO General, which sells “preferred” poli
cies at low rates to low-risk customers; Government Employ
ees, which also sells “preferred” policies, but only to govern
ment employees; GEICO Indemnity, which sells standard
policies to moderate-risk customers; and GEICO Casualty,
which sells nonstandard policies at higher rates to high-risk
customers. Potential customers call a toll-free number an
swered by an agent of the four affiliates, who takes informa
tion and, with permission, gets the applicant’s credit score.3
2 The specific petitioners are subsidiary companies of the GEICO Corpo
ration; for the sake of convenience, we call them “GEICO” collectively.
3 The Act defines a “credit score” as “a numerical value or a categoriza
tion derived from a statistical tool or modeling system used by a person
who makes or arranges a loan to predict the likelihood of certain credit
behaviors, including default.” 15 U. S. C. § 1681g(f)(2)(A) (2000 ed., Supp.
IV). Under its contract with its credit information providers, GEICO
learned credit scores and facts in the credit reports that significantly

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54 SAFECO INS. CO. OF AMERICA v. BURR
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This information goes into GEICO’s computer system, which
selects any appropriate company and the particular rate at
which a policy may be issued.
For some time after FCRA went into effect, GEICO sent
adverse action notices to all applicants who were not offered
“preferred” policies from GEICO General or Government
Employees. GEICO changed its practice, however, after a
method to “neutralize” an applicant’s credit score was de
vised: the applicant’s company and tier placement is com
pared with the company and tier placement he would have
been assigned with a “neutral” credit score, that is, one cal
culated without reliance on credit history.4 Under this new
scheme, it is only if using a neutral credit score would have
put the applicant in a lower priced tier or company that
GEICO sends an adverse action notice; the applicant is not
otherwise told if he would have gotten better terms with a
better credit score.
Respondent Ajene Edo applied for auto insurance with
GEICO. After obtaining Edo’s credit score, GEICO offered
him a standard policy with GEICO Indemnity (at rates
higher than the most favorable), which he accepted. Be
cause Edo’s company and tier placement would have been
the same with a neutral score, GEICO did not give Edo an
adverse action notice. Edo later filed this proposed class ac
tion against GEICO, alleging willful failure to give notice in
violation of § 1681m(a); he claimed no actual harm, but sought
statutory and punitive damages under § 1681n(a). The Dis
trict Court granted summary judgment for GEICO, finding
influenced the scores, but did not have access to the credit reports
themselves.
4 A number of States permit the use of such “neutral” credit scores to
ensure that consumers with thin or unidentifiable credit histories are not
treated disadvantageously. See, e. g., N. Y. Ins. Law Ann. §§ 2802(e), (e)(1)
(West 2006) (generally prohibiting an insurer from “consider[ing] an ab
sence of credit information,” but allowing it to do so if it “treats the con
sumer as if the applicant or insured had neutral credit information, as
defined by the insurer”).

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there was no adverse action when “the premium charged to
[Edo] . . . would have been the same even if GEICO Indem
nity did not consider information in [his] consumer credit his
tory.” Edo v. GEICO Casualty Co., CV 02–678–BR, 2004
U. S. Dist. LEXIS 28522, *12 (D. Ore., Feb. 23, 2004), App.
to Pet. for Cert. in No. 06–100, p. 46a.
Like GEICO, petitioner Safeco 5 relies on credit reports
to set initial insurance premiums,6 as it did for respondents
Charles Burr and Shannon Massey, who were offered higher
rates than the best rates possible. Safeco sent them no
adverse action notices, and they later joined a proposed
class action against the company, alleging willful violation
of § 1681m(a) and seeking statutory and punitive damages
under § 1681n(a). The District Court ordered summary
judgment for Safeco, on the understanding that offering a
single, initial rate for insurance cannot be “adverse action.”
The Court of Appeals for the Ninth Circuit reversed both
judgments. In GEICO’s case, it held that whenever a con
sumer “would have received a lower rate for his insurance
had the information in his consumer report been more favor
able, an adverse action has been taken against him.” Reyn
olds v. Hartford Financial Servs. Group, Inc., 435 F. 3d
1081, 1093 (2006). Since a better credit score would have
placed Edo with GEICO General, not GEICO Indemnity, the
appeals court held that GEICO’s failure to give notice was
an adverse action.
The Ninth Circuit also held that an insurer “willfully” fails
to comply with FCRA if it acts with “reckless disregard” of
a consumer’s rights under the Act. Id., at 1099. It ex
plained that a company would not be acting recklessly if it
“diligently and in good faith attempted to fulfill its statutory
5 Again, the actual petitioners are subsidiary companies, of Safeco Cor
poration in this case; for convenience, we call them “Safeco” collectively.
6 The parties do not dispute that the credit scores and credit reports
relied on by GEICO and Safeco are “consumer reports” under 15 U. S. C.
§ 1681a(d)(1).

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56 SAFECO INS. CO. OF AMERICA v. BURR
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obligations” and came to a “tenable, albeit erroneous, inter
pretation of the statute.” Ibid. The court went on to say
that “a deliberate failure to determine the extent of its obli
gations” would not ordinarily escape liability under § 1681n,
any more than “reliance on creative lawyering that provides
indefensible answers.” Ibid. Because the court believed
that the enquiry into GEICO’s reckless disregard might turn
on undisclosed circumstances surrounding GEICO’s revision
of its notification policy, the Court of Appeals remanded the
company’s case for further proceedings.7
In the action against Safeco, the Court of Appeals rejected
the District Court’s position, relying on its reasoning in
GEICO’s case (where it had held that the notice requirement
applies to a single statement of an initial charge for a new
policy). Spano v. Safeco Corp., 140 Fed. Appx. 746 (2005).
The Court of Appeals also rejected Safeco’s argument that
its conduct was not willful, again citing the GEICO case, and
remanded for further proceedings.
We consolidated the two matters and granted certiorari to
resolve a conflict in the Circuits as to whether § 1681n(a)
reaches reckless disregard of FCRA’s obligations,8 and to
clarify the notice requirement in § 1681m(a). 548 U. S. 942
(2006). We now reverse in both cases.
II
GEICO and Safeco argue that liability under § 1681n(a) for
“willfully fail[ing] to comply” with FCRA goes only to acts
7 Prior to issuing its final opinion in this case, the Court of Appeals had
issued, then withdrawn, two opinions in which it held that GEICO had
“willfully” violated FCRA as a matter of law. Reynolds v. Hartford Fi
nancial Servs. Group, Inc., 416 F. 3d 1097 (CA9 2005); Reynolds v. Hart
ford Financial Servs. Group, Inc., 426 F. 3d 1020 (CA9 2005).
8 Compare, e. g., Cushman v. Trans Union Corp., 115 F. 3d 220, 227 (CA3
1997) (adopting the “reckless disregard” standard), with Wantz v. Exper
ian Information Solutions, 386 F. 3d 829, 834 (CA7 2004) (construing
“willfully” to require that a user “knowingly and intentionally violate the
Act”); Phillips v. Grendahl, 312 F. 3d 357, 368 (CA8 2002) (same).

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known to violate the Act, not to reckless disregard of stat
utory duty, but we think they are wrong. We have said
before that “willfully” is a “word of many meanings whose
construction is often dependent on the context in which it
appears,” Bryan v. United States, 524 U. S. 184, 191 (1998)
(internal quotation marks omitted); and where willfulness is
a statutory condition of civil liability, we have generally
taken it to cover not only knowing violations of a standard,
but reckless ones as well, see McLaughlin v. Richland Shoe
Co., 486 U. S. 128, 132–133 (1988) (“willful,” as used in a limi
tation provision for actions under the Fair Labor Standards
Act, covers claims of reckless violation); Trans World Air
lines, Inc. v. Thurston, 469 U. S. 111, 125–126 (1985) (same,
as to a liquidated damages provision of the Age Discrimina
tion in Employment Act of 1967); cf. United States v. Illinois
Central R. Co., 303 U. S. 239, 242–243 (1938) (“willfully,” as
used in a civil penalty provision, includes “ ‘conduct marked
by careless disregard whether or not one has the right so
to act’ ” (quoting United States v. Murdock, 290 U. S. 389,
395 (1933))). This construction reflects common law usage,
which treated actions in “reckless disregard” of the law as
“willful” violations. See W. Keeton, D. Dobbs, R. Keeton, &
D. Owen, Prosser and Keeton on Law of Torts § 34, p. 212
(5th ed. 1984) (hereinafter Prosser and Keeton) (“Although
efforts have been made to distinguish” the terms “willful,”
“wanton,” and “reckless,” “such distinctions have consist
ently been ignored, and the three terms have been treated
as meaning the same thing, or at least as coming out at the
same legal exit”). The standard civil usage thus counsels
reading the phrase “willfully fails to comply” in § 1681n(a) as
reaching reckless FCRA violations,9 and this is so both on
9 It is different in the criminal law. When the term “willful” or “will
fully” has been used in a criminal statute, we have regularly read the
modifier as limiting liability to knowing violations. See Ratzlaf v. United
States, 510 U. S. 135, 137 (1994); Bryan v. United States, 524 U. S. 184,
191–192 (1998); Cheek v. United States, 498 U. S. 192, 200–201 (1991). This

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58 SAFECO INS. CO. OF AMERICA v. BURR
Opinion of the Court
the interpretive assumption that Congress knows how we
construe statutes and expects us to run true to form, see
Commissioner v. Keystone Consol. Industries, Inc., 508 U. S.
152, 159 (1993), and under the general rule that a common
law term in a statute comes with a common law meaning,
absent anything pointing another way, Beck v. Prupis, 529
U. S. 494, 500–501 (2000).
GEICO and Safeco argue that Congress did point to some
thing different in FCRA, by a drafting history of § 1681n(a)
said to show that liability was supposed to attach only to
knowing violations. The original version of the Senate bill
that turned out as FCRA had two standards of liability to
victims: grossly negligent violation (supporting actual dam
ages) and willful violation (supporting actual, statutory, and
punitive damages). S. 823, 91st Cong., 1st Sess., § 1 (1969).
GEICO and Safeco argue that since a “gross negligence”
standard is effectively the same as a “reckless disregard”
standard, the original bill’s “willfulness” standard must have
meant a level of culpability higher than “reckless disregard,”
or there would have been no requirement to show a different
state of mind as a condition of the potentially much greater
liability; thus, “willfully fails to comply” must have referred
to a knowing violation. Although the gross negligence
standard was reduced later in the legislative process to sim
ple negligence (as it now appears in § 1681o), the provision
reading of the term, however, is tailored to the criminal law, where it is
characteristically used to require a criminal intent beyond the purpose
otherwise required for guilt, Ratzlaf, supra, at 136–137; or an additional
“ ‘bad purpose,’ ” Bryan, supra, at 191; or specific intent to violate a known
legal duty created by highly technical statutes, Cheek, supra, at 200–201.
Thus we have consistently held that a defendant cannot harbor such crimi
nal intent unless he “acted with knowledge that his conduct was unlawful.”
Bryan, supra, at 193. Civil use of the term, however, typically presents
neither the textual nor the substantive reasons for pegging the threshold
of liability at knowledge of wrongdoing. Cf. Farmer v. Brennan, 511 U. S.
825, 836–837 (1994) (contrasting the different uses of the term “reckless
ness” in civil and criminal contexts).

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for willful liability remains unchanged and so must require
knowing action, just as it did originally in the draft of
§ 1681n.
Perhaps. But Congress may have scaled the standard for
actual damages down to simple negligence because it thought
gross negligence, being like reckless action, was covered by
willfulness. Because this alternative reading is possible,
any inference from the drafting sequence is shaky, and cer
tainly no match for the following clue in the text as finally
adopted, which points to the traditional understanding of
willfulness in the civil sphere.
The phrase in question appears in the preamble sentence
of § 1681n(a): “Any person who willfully fails to comply with
any requirement imposed under this subchapter with respect
to any consumer is liable to that consumer . . . .” Then come
the details, in paragraphs (1)(A) and (1)(B), spelling out two
distinct measures of damages chargeable against the willful
violator. As a general matter, the consumer may get either
actual damages or “damages of not less than $100 and not
more than $1,000.” § 1681n(a)(1)(A). But where the of
fender is liable “for obtaining a consumer report under false
pretenses or knowingly without a permissible purpose,” the
statute sets liability higher: “actual damages . . . or $1,000,
whichever is greater.” § 1681n(a)(1)(B).
If the companies were right that “willfully” limits liability
under § 1681n(a) to knowing violations, the modifier “know
ingly” in § 1681n(a)(1)(B) would be superfluous and incongru
ous; it would have made no sense for Congress to condition
the higher damages under § 1681n(a) on knowingly obtaining
a report without a permissible purpose if the general thresh
old of any liability under the section were knowing miscon
duct. If, on the other hand, “willfully” covers both knowing
and reckless disregard of the law, knowing violations are sen
sibly understood as a more serious subcategory of willful
ones, and both the preamble and the subsection have distinct
jobs to do. See United States v. Menasche, 348 U. S. 528,

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60 SAFECO INS. CO. OF AMERICA v. BURR
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538–539 (1955) (“ ‘[G]ive effect, if possible, to every clause
and word of a statute’ ” (quoting Montclair v. Ramsdell, 107
U. S. 147, 152 (1883))).
The companies make other textual and structural argu
ments for their view, but none is persuasive. Safeco thinks
our reading would lead to the absurd result that one could,
with reckless disregard, knowingly obtain a consumer report
without a permissible purpose. But this is not so; action
falling within the knowing subcategory does not simul
taneously fall within the reckless alternative. Then both
GEICO and Safeco argue that the reference to acting “know
ingly and willfully” in FCRA’s criminal enforcement provi
sions, §§ 1681q and 1681r, indicates that “willfully” cannot
include recklessness. But we are now on the criminal side
of the law, where the paired modifiers are often found, see,
e. g., 18 U. S. C. § 1001 (2000 ed. and Supp. IV) (false state
ments to federal investigators); 20 U. S. C. § 1097(a) (embez
zlement of student loan funds); 18 U. S. C. § 1542 (2000 ed.
and Supp. IV) (false statements in a passport application).
As we said before, in the criminal law “willfully” typically
narrows the otherwise sufficient intent, making the govern
ment prove something extra, in contrast to its civil law
usage, giving a plaintiff a choice of mental states to show in
making a case for liability, see n. 9, supra. The vocabulary
of the criminal side of FCRA is consequently beside the point
in construing the civil side.
III
A
Before getting to the claims that the companies acted reck
lessly, we have the antecedent question whether either com
pany violated the adverse action notice requirement at all.
In both cases, respondent-plaintiffs’ claims are premised on
initial rates charged for new insurance policies, which are
not “adverse” actions unless quoting or charging a first-time

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premium is “an increase in any charge for . . . any insurance,
existing or applied for.” 15 U. S. C. § 1681a(k)(1)(B)(i).
In Safeco’s case, the District Court held that the initial
rate for a new insurance policy cannot be an “increase” be
cause there is no prior dealing. The phrase “increase in any
charge for . . . insurance” is readily understood to mean a
change in treatment for an insured, which assumes a previ
ous charge for comparison. See Webster’s New Interna
tional Dictionary 1260 (2d ed. 1957) (defining “increase” as
“[a]ddition or enlargement in size, extent, quantity, num
ber, intensity, value, substance, etc.; augmentation; growth;
multiplication”). Since the District Court understood “in
crease” to speak of change just as much as of comparative
size or quantity, it reasoned that the statute’s “increase”
never touches the initial rate offer, where there is no change.
The Government takes the part of the Court of Appeals in
construing “increase” to reach a first-time rate. It says that
regular usage of the term is not as narrow as the District
Court thought: the point from which to measure difference
can just as easily be understood without referring to prior
individual dealing. The Government gives the example of a
gas station owner who charges more than the posted price
for gas to customers he does not like; it makes sense to say
that the owner increases the price and that the driver pays
an increased price, even if he never pulled in there for gas
before. See Brief for United States as Amicus Curiae 26.10
The Government implies, then, that reading “increase” re
quires a choice, and the chosen reading should be the broad
one in order to conform to what Congress had in mind.
10 Since the posted price seems to be addressed to the world in general,
one could argue that the increased gas price is not the initial quote. But
the same usage point can be made with the example of the clothing model
who gets a call from a ritzy store after posing for a discount retailer. If
she quotes a higher fee, it would be natural to say that the uptown store
will have to pay the “increase” to have her in its ad.

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We think the Government’s reading has the better fit with
the ambitious objective set out in the Act’s statement of pur
pose, which uses expansive terms to describe the adverse
effects of unfair and inaccurate credit reporting and the re
sponsibilities of consumer reporting agencies. See § 1681(a)
(inaccurate reports “directly impair the efficiency of the
banking system”; unfair reporting methods undermine public
confidence “essential to the continued functioning of the
banking system”; need to “insure” that reporting agencies
“exercise their grave responsibilities” fairly, impartially, and
with respect for privacy). The descriptions of systemic
problem and systemic need as Congress saw them do nothing
to suggest that remedies for consumers placed at a disadvan
tage by unsound credit ratings should be denied to first-time
victims, and the legislative histories of FCRA’s original en
actment and of the 1996 amendment reveal no reason to con
fine attention to customers and businesses with prior deal
ings. Quite the contrary.11 Finally, there is nothing about
insurance contracts to suggest that Congress might have
meant to differentiate applicants from existing customers
when it set the notice requirement; the newly insured who
gets charged more owing to an erroneous report is in the
same boat with the renewal applicant.12 We therefore hold
11 See S. Rep. No. 91–517, p. 7 (1969) (“Those who . . . charge a higher
rate for credit or insurance wholly or partly because of a consumer report
must, upon written request, so advise the consumer . . . ”); S. Rep.
No. 103–209, p. 4 (1993) (adverse action notice is required “any time the
permissible use of a report results in an outcome adverse to the interests
of the consumer”); H. R. Rep. No. 103–486, p. 26 (1994) (“[W]henever a
consumer report is obtained for a permissible purpose . . . , any action
taken based on that report that is adverse to the interests of the consumer
triggers the adverse action notice requirements”).
12 In fact, notice in the context of an initially offered rate may be of
greater significance than notice in the context of a renewal rate; if, for
instance, insurance is offered on the basis of a single, long-term guaran
teed rate, a consumer who is not given notice during the initial application
process may never have an opportunity to learn of any adverse treatment.

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that the “increase” required for “adverse action,” 15 U. S. C.
§ 1681a(k)(1)(B)(i), speaks to a disadvantageous rate even
with no prior dealing; the term reaches initial rates for
new applicants.
B
Although offering the initial rate for new insurance can
be an “adverse action,” respondent-plaintiffs have another
hurdle to clear, for § 1681m(a) calls for notice only when the
adverse action is “based in whole or in part on” a credit re
port. GEICO argues that in order to have adverse action
“based on” a credit report, consideration of the report must
be a necessary condition for the increased rate. The Gov
ernment and respondent-plaintiffs do not explicitly take a
position on this point.
To the extent there is any disagreement on the issue, we
accept GEICO’s reading. In common talk, the phrase
“based on” indicates a but-for causal relationship and thus a
necessary logical condition. Under this most natural read
ing of § 1681m(a), then, an increased rate is not “based in
whole or in part on” the credit report unless the report was
a necessary condition of the increase.
As before, there are textual arguments pointing another
way. The statute speaks in terms of basing the action “in
part” as well as wholly on the credit report, and this phras
ing could mean that adverse action is “based on” a credit
report whenever the report was considered in the rate
setting process, even without being a necessary condition for
the rate increase. But there are good reasons to think Con
gress preferred GEICO’s necessary-condition reading.
If the statute has any claim to lucidity, not all “adverse
actions” require notice, only those “based . . . on” information
in a credit report. Since the statute does not explicitly call
for notice when a business acts adversely merely after con
sulting a report, conditioning the requirement on action
“based . . . on” a report suggests that the duty to report
arises from some practical consequence of reading the re

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64 SAFECO INS. CO. OF AMERICA v. BURR
Opinion of the Court
port, not merely some subsequent adverse occurrence that
would have happened anyway. If the credit report has no
identifiable effect on the rate, the consumer has no immedi
ately practical reason to worry about it (unless he has the
power to change every other fact that stands between him
self and the best possible deal); both the company and the
consumer are just where they would have been if the com
pany had never seen the report.13 And if examining reports
that make no difference was supposed to trigger a reporting
requirement, it would be hard to find any practical point in
imposing the “based . . . on” restriction. So it makes more
sense to suspect that Congress meant to require notice and
prompt a challenge by the consumer only when the consumer
would gain something if the challenge succeeded.14
C
To sum up, the difference required for an increase can be
understood without reference to prior dealing (allowing a
13 For instance, if a consumer’s driving record is so poor that no insurer
would give him anything but the highest possible rate regardless of his
credit report, whether or not an insurer happened to look at his credit
report should have no bearing on whether the consumer must receive no
tice, since he has not been treated differently as a result of it.
14 The history of the Act provides further support for this reading. The
originally enacted version of the notice requirement stated: “Whenever . . .
the charge for . . . insurance is increased either wholly or partly because of
information contained in a consumer report . . . , the user of the consumer
report shall so advise the consumer . . . .” 15 U. S. C. § 1681m(a) (1976
ed.). The “because of ” language in the original statute emphasized that
the consumer report must actually have caused the adverse action for the
notice requirement to apply. When Congress amended FCRA in 1996, it
sought to define “adverse action” with greater particularity, and thus split
the notice provision into two separate subsections. See 110 Stat. 3009–
426 to 3009–427, 3009–443 to 3009–444. In the revised version of
§ 1681m(a), the original “because of ” phrasing changed to “based . . . on,”
but there was no indication that this change was meant to be a substantive
alteration of the statute’s scope.

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first-time applicant to sue), and considering the credit report
must be a necessary condition for the difference. The re
maining step in determining a duty to notify in cases like
these is identifying the benchmark for determining whether
a first-time rate is a disadvantageous increase. And in deal
ing with this issue, the pragmatic reading of “based . . . on”
as a condition necessary to make a practical difference car
ries a helpful suggestion.
The Government and respondent-plaintiffs argue that the
baseline should be the rate that the applicant would have
received with the best possible credit score, while GEICO
contends it is what the applicant would have had if the com
pany had not taken his credit score into account (the “neutral
score” rate GEICO used in Edo’s case). We think GEICO
has the better position, primarily because its “increase”
baseline is more comfortable with the understanding of cau
sation just discussed, which requires notice under § 1681m(a)
only when the effect of the credit report on the initial rate
offered is necessary to put the consumer in a worse position
than other relevant facts would have decreed anyway. If
Congress was this concerned with practical consequences
when it adopted a “based . . . on” causation standard, it pre
sumably thought in equally practical terms when it spoke of
an “increase” that must be defined by a baseline to measure
from. Congress was therefore more likely concerned with
the practical question whether the consumer’s rate actually
suffered when the company took his credit report into ac
count than the theoretical question whether the consumer
would have gotten a better rate with perfect credit.15
15 While it might seem odd, under the current statutory structure, to
interpret the definition of “adverse action” (in § 1681a(k)(1)(B)(i)) in con
junction with § 1681m(a), which simply applies the notice requirement to
a particular subset of “adverse actions,” there are strong indications that
Congress intended these provisions to be construed in tandem. When
FCRA was initially enacted, the link between the definition of “adverse
action” and the notice requirement was clear, since “adverse action” was

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66 SAFECO INS. CO. OF AMERICA v. BURR
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The Government objects that this reading leaves a loop
hole, since it keeps first-time applicants who actually deserve
better-than-neutral credit scores from getting notice, even
when errors in credit reports saddle them with unfair rates.
This is true; the neutral-score baseline will leave some con
sumers without a notice that might lead to discovering er
rors. But we do not know how often these cases will occur,
whereas we see a more demonstrable and serious disadvan
tage inhering in the Government’s position.
Since the best rates (the Government’s preferred baseline)
presumably go only to a minority of consumers, adopting the
Government’s view would require insurers to send slews of
adverse action notices; every young applicant who had yet to
establish a gilt-edged credit report, for example, would get
a notice that his charge had been “increased” based on his
credit report. We think that the consequence of sending out
notices on this scale would undercut the obvious policy be
hind the notice requirement, for notices as common as these
would take on the character of formalities, and formalities
tend to be ignored. It would get around that new insurance
usually comes with an adverse action notice, owing to some
legal quirk, and instead of piquing an applicant’s interest
about the accuracy of his credit record, the commonplace no
tices would mean just about nothing and go the way of junk
mail. Assuming that Congress meant a notice of adverse
defined within § 1681m(a). See 15 U. S. C. § 1681m(a) (1976 ed.). Though
Congress eventually split the provision into two parts (with the definition
of “adverse action” now located at § 1681a(k)(1)(B)(i)), the legislative his
tory suggests that this change was not meant to alter Congress’s intent to
define “adverse action” in light of the notice requirement. See S. Rep.
No. 103–209, at 4 (“The Committee bill . . . defines an ‘adverse action’ as
any action that is adverse to the interests of the consumer and is based in
whole or in part on a consumer report”); H. R. Rep. No. 103–486, at 26
(“[A]ny action based on [a consumer] report that is adverse to the interests
of the consumer triggers the adverse action notice requirements”).

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action to get some attention, we think the cost of closing the
loophole would be too high.
While on the subject of hypernotification, we should add a
word on another point of practical significance. Although
the rate initially offered for new insurance is an “increase”
calling for notice if it exceeds the neutral rate, did Congress
intend the same baseline to apply if the quoted rate remains
the same over a course of dealing, being repeated at each
renewal date?
We cannot believe so. Once a consumer has learned that
his credit report led the insurer to charge more, he has no
need to be told over again with each renewal if his rate has
not changed. For that matter, any other construction would
probably stretch the word “increase” more than it could bear.
Once the gas station owner had charged the customer the
above-market price, it would be strange to speak of the same
price as an increase every time the customer pulled in.
Once buyer and seller have begun a course of dealing, cus
tomary usage does demand a change for “increase” to make
sense.16 Thus, after initial dealing between the consumer
and the insurer, the baseline for “increase” is the previous
rate or charge, not the “neutral” baseline that applies at
the start.
IV
A
In GEICO’s case, the initial rate offered to Edo was the
one he would have received if his credit score had not been
16 Consider, too, a consumer who, at the initial application stage, had a
perfect credit score and thus obtained the best insurance rate, but, at the
renewal stage, was charged at a higher rate (but still lower than the rate
he would have received had his credit report not been taken into account)
solely because his credit score fell during the interim. Although the con
sumer clearly suffered an “increase” in his insurance rate that was “based
on” his credit score, he would not be entitled to an adverse action notice
under the baseline used for initial applications.

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68 SAFECO INS. CO. OF AMERICA v. BURR
Opinion of the Court
taken into account, and GEICO owed him no adverse action
notice under § 1681m(a).17
B
Safeco did not give Burr and Massey any notice because it
thought § 1681m(a) did not apply to initial applications, a mis
take that left the company in violation of the statute if Burr
and Massey received higher rates “based in whole or in part”
on their credit reports; if they did, Safeco would be liable to
them on a showing of reckless conduct (or worse). The first
issue we can forget, however, for although the record does
not reliably indicate what rates they would have obtained if
their credit reports had not been considered, it is clear
enough that if Safeco did violate the statute, the company
was not reckless in falling down in its duty.
While “the term recklessness is not self-defining,” the
common law has generally understood it in the sphere of civil
liability as conduct violating an objective standard: action
entailing “an unjustifiably high risk of harm that is either
known or so obvious that it should be known.” 18 Farmer v.
Brennan, 511 U. S. 825, 836 (1994); see Prosser and Keeton
17 We reject Edo’s alternative argument that GEICO’s offer of a stand
ard insurance policy with GEICO Indemnity was an “adverse action” re
quiring notice because it amounted to a “denial” of insurance through a
lower cost, “preferred” policy with GEICO General. See § 1681a(k)
(1)(B)(i) (defining “adverse action” to include a “denial . . . of . . . insur
ance”). An applicant calling GEICO for insurance talks with a sales rep
resentative who acts for all the GEICO companies. The record has no
indication that GEICO tells applicants about its corporate structure, or
that applicants request insurance from one of the several companies or
even know of their separate existence. The salesperson takes information
from the applicant and obtains his credit score, then either denies any
insurance or assigns him to one of the companies willing to provide it; the
other companies receive no application and take no separate action. This
way of accepting new business is clearly outside the natural meaning of
“denial” of insurance.
18 Unlike civil recklessness, criminal recklessness also requires subjec
tive knowledge on the part of the offender. Brennan, 511 U. S., at 836–
837; ALI, Model Penal Code § 2.02(2)(c) (1985).

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§ 34, at 213–214. The Restatement, for example, defines
reckless disregard of a person’s physical safety this way:
“The actor’s conduct is in reckless disregard of the
safety of another if he does an act or intentionally fails
to do an act which it is his duty to the other to do, know
ing or having reason to know of facts which would lead
a reasonable man to realize, not only that his conduct
creates an unreasonable risk of physical harm to an
other, but also that such risk is substantially greater
than that which is necessary to make his conduct negli
gent.” 2 Restatement (Second) of Torts § 500, p. 587
(1963–1964).
It is this high risk of harm, objectively assessed, that is the
essence of recklessness at common law. See Prosser and
Keeton § 34, at 213 (recklessness requires “a known or obvi
ous risk that was so great as to make it highly probable that
harm would follow”).
There being no indication that Congress had something
different in mind, we have no reason to deviate from the
common law understanding in applying the statute. See
Prupis, 529 U. S., at 500–501. Thus, a company subject to
FCRA does not act in reckless disregard of it unless the ac
tion is not only a violation under a reasonable reading of the
statute’s terms, but shows that the company ran a risk of
violating the law substantially greater than the risk associ
ated with a reading that was merely careless.
Here, there is no need to pinpoint the negligence/reck
lessness line, for Safeco’s reading of the statute, albeit er
roneous, was not objectively unreasonable. As we said,
§ 1681a(k)(1)(B)(i) is silent on the point from which to meas
ure “increase.” On the rationale that “increase” presup
poses prior dealing, Safeco took the definition as excluding
initial rate offers for new insurance, and so sent no adverse
action notices to Burr and Massey. While we disagree with
Safeco’s analysis, we recognize that its reading has a founda

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70 SAFECO INS. CO. OF AMERICA v. BURR
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tion in the statutory text, see supra, at 61, and a sufficiently
convincing justification to have persuaded the District Court
to adopt it and rule in Safeco’s favor.
This is not a case in which the business subject to the Act
had the benefit of guidance from the courts of appeals or the
Federal Trade Commission (FTC) that might have warned it
away from the view it took. Before these cases, no court of
appeals had spoken on the issue, and no authoritative guid
ance has yet come from the FTC 19 (which in any case has
only enforcement responsibility, not substantive rulemaking
authority, for the provisions in question, see 15 U. S. C.
§§ 1681s(a)(1), (e)). Cf. Saucier v. Katz, 533 U. S. 194, 202
(2001) (assessing, for qualified immunity purposes, whether
an action was reasonable in light of legal rules that were
“clearly established” at the time). Given this dearth of
guidance and the less-than-pellucid statutory text, Safeco’s
reading was not objectively unreasonable, and so falls well
short of raising the “unjustifiably high risk” of violating the
statute necessary for reckless liability.20
* * *
19 Respondent-plaintiffs point to a letter, written by an FTC staff mem
ber to an insurance company lawyer, that suggests that an “adverse ac
tion” occurs when “the applicant will have to pay more for insurance at
the inception of the policy than he or she would have been charged if the
consumer report had been more favorable.” Letter from Hannah A.
Stires to James M. Ball (Mar. 1, 2000), http://www.ftc.gov/os/statutes/fcra/
ball.htm (as visited May 17, 2007, and available in Clerk of Court’s case
file). But the letter did not canvass the issue, and it explicitly indicated
that it was merely “an informal staff opinion . . . not binding on the Com
mission.” Ibid.
20 Respondent-plaintiffs argue that evidence of subjective bad faith must
be taken into account in determining whether a company acted knowingly
or recklessly for purposes of § 1681n(a). To the extent that they argue
that evidence of subjective bad faith can support a willfulness finding even
when the company’s reading of the statute is objectively reasonable, their
argument is unsound. Where, as here, the statutory text and relevant
court and agency guidance allow for more than one reasonable interpreta

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71 Cite as: 551 U. S. 47 (2007)
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The Court of Appeals correctly held that reckless disre
gard of a requirement of FCRA would qualify as a willful
violation within the meaning of § 1681n(a). But there was
no need for that court to remand the cases for factual devel
opment. GEICO’s decision to issue no adverse action notice
to Edo was not a violation of § 1681m(a), and Safeco’s mis
reading of the statute was not reckless. The judgments of
the Court of Appeals are therefore reversed in both cases,
which are remanded for further proceedings consistent with
this opinion.
It is so ordered.
Justice Stevens, with whom Justice Ginsburg joins,
concurring in part and concurring in the judgment.
While I join the Court’s judgment and Parts I, II, III–A,
and IV–B of the Court’s opinion, I disagree with the reason
ing in Parts III–B and III–C, as well as with Part IV–A,
which relies on that reasoning.
An adverse action taken after reviewing a credit report
“is based in whole or in part on” that report within the mean
ing of 15 U. S. C. § 1681m(a). That is true even if the com
pany would have made the same decision without looking at
the report, because what the company actually did is more
relevant than what it might have done. I find nothing in the
statute making the examination of a credit report a “neces
sary condition” of any resulting increase. Ante, at 63. The
more natural reading is that reviewing a report is only a
sufficient condition.
tion, it would defy history and current thinking to treat a defendant who
merely adopts one such interpretation as a knowing or reckless violator.
Congress could not have intended such a result for those who followed
an interpretation that could reasonably have found support in the courts,
whatever their subjective intent may have been.
Both Safeco and GEICO argue that good-faith reliance on legal advice
should render companies immune to claims raised under § 1681n(a).
While we do not foreclose this possibility, we need not address the issue
here in light of our present holdings.

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The Court’s contrary position leads to a serious anomaly.
As a matter of federal law, companies are free to adopt what
ever “neutral” credit scores they want. That score need not
(and probably will not) reflect the median consumer credit
score. More likely, it will reflect a company’s assessment of
the creditworthiness of a run-of-the-mill applicant who lacks
a credit report. Because those who have yet to develop a
credit history are unlikely to be good credit risks, “neutral”
credit scores will in many cases be quite low. Yet under the
Court’s reasoning, only those consumers with credit scores
even lower than what may already be a very low “neutral”
score will ever receive adverse action notices.1
While the Court acknowledges that “the neutral-score
baseline will leave some consumers without a notice that
might lead to discovering errors,” ante, at 66, it finds this
unobjectionable because Congress was likely uninterested in
“the theoretical question whether the consumer would have
gotten a better rate with perfect credit,” ante, at 65.2 The
Court’s decision, however, disserves not only those consum
ers with “gilt-edged credit report[s],” ante, at 66, but also
the much larger category of consumers with better-than
“neutral” scores. I find it difficult to believe that Congress
1 Stranger still, companies that automatically disqualify consumers who
lack credit reports will never need to send any adverse action notices.
After all, the Court’s baseline is “what the applicant would have had if the
company had not taken his credit score into account,” ante, at 65, but from
such companies, what the applicant “would have had” is no insurance at
all. An offer of insurance at any price, however inflated by a poor and
perhaps incorrect credit score, will therefore never constitute an adverse
action.
2 The Court also justifies its deviation from the statute’s text by reason
ing that frequent adverse action notices would be ignored. See ante, at
66–67. To borrow a sentence from the Court’s opinion: “Perhaps.” Ante,
at 59. But rather than speculate about the likely effect of “hypernotifica
tion,” ante, at 67, I would defer to the Solicitor General’s position, in
formed by the Federal Trade Commission’s expert judgment, that consum
ers by and large benefit from adverse action notices, however common.
See Brief for United States as Amicus Curiae 27–29.

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73 Cite as: 551 U. S. 47 (2007)
Thomas, J., concurring in part
could have intended for a company’s unrestrained adoption
of a “neutral” score to keep many (if not most) consumers
from ever hearing that their credit reports are costing them
money. In my view, the statute’s text is amenable to a more
sensible interpretation.
Justice Thomas, with whom Justice Alito joins, con
curring in part.
I agree with the Court’s disposition and most of its reason
ing. Safeco did not send notices to new customers because
it took the position that the initial insurance rate it offered
a customer could not be an “increase in any charge for . . .
insurance” under 15 U. S. C. § 1681a(k)(1)(B)(i). The Court
properly holds that regardless of the merits of this interpre
tation, it is not an unreasonable one, and Safeco therefore
did not act willfully. Ante, at 68–70. I do not join Part
III–A of the Court’s opinion, however, because it resolves
the merits of Safeco’s interpretation of § 1681a(k)(1)(B)(i)—
an issue not necessary to the Court’s conclusion and not
briefed or argued by the parties.