New FCRA Lawsuit Against Equifax

The Kittell Law Firm filed a new Fair Credit Reporting Act lawsuit today against Equifax for mixing the credit file of our client with that of his father.  As a result, three of the father's tax liens were reported by Equifax on our client's credit report.  What's even worse than that?  Equifax failed to remove the father's tax liens from the son's credit report, even after the son provided documentation that the tax liens belonged to the father.  Equifax continued reporting the father's tax liens on the son's credit report, causing the son to be denied credit on at least three occasions. 

Its bad enough to mix up two people with different names, different Social Security numbers, different addresses and different dates of birth.  What's worse is that Equifax still could not get it right even after being told to fix the obvious error.  Good thing the Fair Credit Reporting Act exists to provide consumers with the opportunity to obtain justice for the aggravation and other damages caused by the credit bureaus' callous disrespect for the accuracy of the credit reports they generate.

$1 million verdict against Equifax won't be reduced

This man's story reminds me of a client I represented a while back against ... you guessed it ... Equifax.  More about my case below:

By Maria Dinzeo

SAN FRANCISCO (CN) - A cancer survivor who won more than $1 million from Equifax for improperly handling his identity theft report can keep the full award, a federal judge ruled.


U.S. District Judge Susan Illston rejected the credit reporting agency's motions for a new trial or to set aside so-called "excessive" damages.

Eric Drew, who was twice referred to hospice care by hospitals that said they could not treat his cancer, had his identity stolen in 2003 by a phlebotomist working at the cancer center where he had undergone treatment.

Drew discovered that multiple fraudulent credit accounts had been opened in his name with thousands of dollars in balances.

"Plaintiff testified that, while he was away from home being treated for near fatal cancer, he singlehandedly caught the individual who had stolen his identity even though the police and hospital personnel had not believed him or wanted to help him," Illston wrote.

Fearing that his life was in danger, Drew called newspapers, the FBI, police and his hometown mayor in Los Gatos, Calif.

When a local television station picked up his story, the identity thief was caught and convicted of criminal violation of the Health Insurance Portability and Accountability Act.

Over the next two years, however, Equifax and a number of other credit reporting agencies and banks allegedly thwarted Drew's attempts to repair his credit and reinvestigate his claims of identity theft.

After a nine-day trial, a jury awarded Drew $6,326.69 in economic damages, $315,000 in noneconomic compensatory damages and $700,000 in punitive damages.

Among Equifax's requests on appeal, the company argued to reduce "excessive" compensatory and punitive damages to $200,000 and $50,000, respectively.

"Here, defendant leaves the court to speculate where its $200,000 figure comes from," Illston wrote. "It does not explain why $315,000 is shocking to the conscience or unsupported by the evidence while $200,000 is a proper number."

Illston refused to grant remittance, finding that Drew had "presented significant evidence of emotional distress that he suffered as a result of his unique circumstances."

"The evidence strongly supports a finding that the harm plaintiff suffered was not the result of mere accident," the ruling states.

Against all odds, Drew identified the man who stole his identity, beat cancer and launched an unprecedented criminal HIPAA prosecution, "but he couldn't navigate the system that defendant had set up to correct his credit report," Illston wrote.

Now, about my case.  Just like Eric Drew, my client helped the authorities nab his identity thief who, among other things, had opened scores of accounts in my client's name and had even bought 2 or 3 vehicles, including a Harley, using my client's identity.  Thanks to the persistence of my client, the authorities (the FBI if I remember right) caught the identity thief while riding the ill-gotten Harley.  The identity thief was tried, convicted and sentenced.

Unfortunately, just like Mr. Drew, my client's story did not end there.  Equifax and the other three bureaus refused to believe my client's disputes regarding the scores of accounts opened in his name, despite the conviction of the identity thief that opened the accounts.  In fact, the identity thief served his entire sentence before Equifax and the other bureaus finally fixed my client's credit reports and then only after I had sued the bureaus on behalf of my client.  In other words, the conviction of the identity thief was not good enough proof for Equifax, Experian and Trans Union.  But my federal lawsuit ironically got the job done, but not before my client suffered very, very significant emotional distress.  At his lowest point, he was sitting in his closet with a gun in his mouth because of the sheer shambles that this life had been turned into after the complete loss of his financial independence caused by the credit bureaus' failure to do their job.

Luckily, he did not pull the trigger and eventually fought back through his lawsuit, which led to his credit reports being corrected.  Equifax should be ashamed to claim that Mr. Drew's damages did not justify an award of $315,000 in light of their intentional and flagrant disregard for their statutory duties.  I'm glad the judge saw through Equifax's sham of an argument.  But I'm sure they will appeal to the next level.

As for my client, his case never went to trial as Equifax and the other bureaus settled for a "confidential" sum after suit was filed.

Another Credit Repair Company Sued

According to a lawsuit filed by Colorado Attorney General John Suthers, a “credit repair” company has clearly violated federal and Colorado law by charging upfront fees and failing to disclose the total cost of its services.
The suit was filed in Denver District Court against Veracity Credit Consultants, a credit repair company that charges consumers initial fees of up to $99, and subsequent monthly fees as high as $79. Colorado law prohibits credit repair companies from charging fees until their services are complete.
The credit repair company of questionable character boasts of “results” and claims to be one of the best credit-repair outfits available.
According to the Colorado Attorney General, many of the company's claims are exaggerated at best. He specifically pointed to the company's claim that it can “optimize” consumers' credit reports by repairing or erasing bad credit as worthy of suspicion. Both the federal Fair Credit Reporting Act and Colorado Consumer Credit Reporting Act provide that credit bureaus can continue to report negative information about a consumer's credit for up to seven years.  Veracity's claimed tactics apparently fly in the face of the FCRA and Colorado's Consumer Credit Reporting Act.

Veracity's website says that the company “uses knowledge of the law and years of experience perfecting a proven formula to provide results while protecting your rights.” Once a consumer opens an account, according to the site, Veracity “investigates and works with credit bureaus and creditors” and works “to remove errors, delete negatives, and highlight good accounts.”
Despite these impressive claims, Veracity's “client-services agreement” explicitly says that the company doesn't “represent or warrant that it will achieve specific results for client.”
I have yet to meet a credit repair company that is above board.  Credit repair companies that are willing to try to remove accurate, non obsolete information from a consumer's credit report for a fee simply fly in the face of the entire credit reporting system and hurt those consumers who do pay their bills.  Just as strongly as I feel that credit bureaus should correct errors on consumers' credit reports, I also believe that consumers should have to live with their legitimately bad credit for the seven years that the FCRA allows the reporting of adverse credit items.  Credit repair companies are shady at best and those consumers who try to skirt the rules by using credit repair companies are, in my opinion, questionable as well.

Class action against check verifiers reinstated

From http://www.courthousenews.com/ - 

"The 6th Circuit revived a class action accusing foreign check-verification companies of ignoring a numbering change in Tennessee's driver's license system, making it appear as if 'hundreds of thousands, if not millions' of consumers were first-time check writers.


Cheryl Beaudry filed the class action in 2007 against TeleCheck Services, TeleCheck International and First Data Corp., alleging violations of the Fair Credit Reporting Act (FCRA).

U.S. District Judge Aleta Arthur Trauger dismissed the case, saying Beaudry failed to allege injury - namely, that she had a check rejected or transaction canceled because of the error.

But the Cincinnati-based appellate panel said she didn't need to prove actual injury under the law.

'FCRA's private right of action does not require proof of actual damages as a prerequisite to the recovery of statutory damages for willful violations of the Act,' Judge Sutton wrote.

'The district court and the defendants suggest that, if we read the law to allow statutory damages without proof of injury, we would be creating a strict liability regime,' Sutton added. 'Not so. The existence of a willfulness requirement proves that there is nothing 'strict' about the state of behavior required to violate the law' (emphasis in original).

Sutton said Beaudry simply had to show that the defendants used unreasonable procedures in preparing her credit report.

'Under these circumstances,' the court concluded, 'Beaudry's claim should not have been dismissed.'"

The reason that actual injury is not required for a willful violation of the FCRA is because 15 U.S.C. 1681n provides for statutory damages of not less than $100 but not more than $1000.  15 U.S.C. 1681o, on the other hand, does not allow the recovery of statutory damages for a negligent violation of the FCRA.  Thus, a negligent violation must cause actual damage to the consumer for the consumer to be able to recover.

Eventually, I will get around to explaining 1681n and o in detail but, currently, I am bogged down with work and, as a result, stuck at 1681d.  But I'll get there, I promise.

Article about yet another case where Equifax mixed two consumers' files together

Yesterday in the Atlanta Journal-Constitution, there was an article about yet another case where Equifax's faulty matching logic caused two people's credit files to be merged together, creating a mixed file where the bad credit history of one person lands on the good credit report of another person. The case in the article involves twins, where Equifax places the brother's bad credit on his twin sister's credit report and refuses to fix the errors despite numerous disputes and proof provided by the sister.

Here's a quote from the article:

"For more than two years Robyn Mueller has been battling credit reporting giant Equifax, which mixed her twin brother’s data into her file, then failed to correct the errors, records show.
Mueller sent Equifax repeated dispute letters beginning in 2006 — and even copies of each sibling’s driver’s licenses, pay stubs and other records — to prove they are different people. But the problem wasn’t fixed until last summer when she sued the Atlanta-based credit bureau.

For two years the errors saddled Mueller with an Equifax credit report so troubled she had no credit score, according to Mueller and records she’s assembled as part of a federal lawsuit.
'You don’t understand how much torture I went through,' said Mueller, 39, who lives in Sugar Hill. 'All the credit bureaus, they control your life. … It’s not fair for them to steal your identity.'

...

Federal law is supposed to protect consumers from such problems, mandating that credit reporting agencies investigate and promptly correct any errors consumers report to them.
But consumer watchdog groups say the system for disputing credit report errors is badly broken and can have a devastating impact on an individual’s ability to get loans, housing, insurance and jobs. They say credit bureaus do little to investigate alleged errors and use an automated system that reduces a consumer’s complex dispute letter and supporting documents to a two- or three-digit code.

When credit bureaus refuse to correct errors, the Fair Credit Reporting Act allows consumers to bring suit to enforce the law and collect damages and attorneys fees if they prevail.

The Consumer Data Industry Association, a trade group for the credit bureaus, said the dispute system, with its electronic coding, quickly corrects errors most of the time. Serious, lingering problems are rare, said Stuart Pratt, the association’s CEO."

FYI - the CDIA is an organization that is comprised of the credit bureaus and major furnishers of credit information (credit card companies, mortgage companies, etc.). The CDIA is actually responsible for coming up with the credit bureaus' terrible procedures for "investigating" consumer disputes by merely asking the company that provided the wrong information to begin with whether it was right or not, and then, no matter what the answer, going with the answer of the furnisher and never siding with the consumer if the consumer's position contradicts that of the furnisher.

First of all, Mr. Pratt, serious, lingering problems with Equifax and the other CRAs Experian and Trans Union are not only not "rare" but are common place. I see them every day.

And, in Ms. Mueller's case, the problem is not only Equifax's complete failure to properly investigate her disputes, but also Equifax's matching logic, which fails to require an exact match of a Social Security number on an account to the consumer before placing the account on the consumer's credit report. This caused the brother's bad credit, reported to Equifax with the brother's name and Social Security number, to land on the sister's credit report under her name and Social Security number.

This is a problem that Equifax has known about since the early 1990s and has even promised to fix in order to extricate itself from a lawsuit filed against it by 18 States and again when it was sued for this same mixed file problem by the FTC. Both times, Equifax agreed to fix its matching logic to use full identifying information, including full Social Security number, but both times Equifax failed to do what it promised, to the detriment to consumers like Ms. Mueller. Good luck in your lawsuit.

Here's a link to the full article - http://www.ajc.com/feeds/content/metro/stories/2009/06/14/spotlight_credit.html?cxtype=rss&cxsvc=7&cxcat=13.

Sample FCRA lawsuits that I have handled

Below is a summary of Fair Credit Reporting Act (and some Fair Debt Collection Practices Act) cases where I have represented consumers over the past two years.

• FCRA claim against Bank of America - filed in the United States District Court for the Eastern District of New York in September 2008; case involves the theft of the Plaintiff's identity. Identity thief opened a fraudulent checking account in the Plaintiff's name. The Plaintiff alerted Bank of America numerous times that the checking account was fraudulently opened. Despite being made aware of the fraudulent nature of the checking account, Bank of America allowed the identity thief to access the Plaintiff's legitimate home equity line of credit, stealing nearly $10,000 from the Plaintiff. Bank of America then tried to foreclose on the Plaintiff's home because of the $10,000 stolen by the identity thief.

• FCRA claim against Wells Fargo - filed in the United States District Court for the District of Kansas in July, 2007; Case involves multiple allegations of violations of the Fair Credit Reporting Act, 15 U.S.C. 1681 et seq. committed by Wells Fargo. Wells Fargo sent a "cash and use" check to a person living in Florida with the same or similar name as our client who lives in Kansas. Our client has never lived in Florida. The Florida person cashed the check, but failed to repay the loan. Instead of collecting from the person in Florida, Wells Fargo allegedly made abusive collection attempts against our client, including reporting the erroneous debt onto our client's credit reports with Trans Union, Experian and Equifax. Despite repeated disputes to Wells Fargo and the credit bureaus, Wells Fargo allegedly refused to remove the erroneous debt from the client's credit reports, thereby violating the FCRA. Settled in September 2008.

• FDCPA claim against Midland Credit - filed in December 2006 in Circuit Court of Marion County, Mississippi. Midland allegedly violated Fair Debt Collection Practices Act by filing a lawsuit against the client to collect fraudulent debt that, even if owed, was barred by the statute of limitations. This case was settled in July, 2007.

• FDCPA claim against Van Ru Credit Corporation - filed December 2006 in Circuit Court of Harrison County, Mississippi. Removed to United States District Court for Southern District of Mississippi. Van Ru allegedly violated Fair Debt Collection Practices Act by repeated telephone calls to client’s job, despite client informing Van Ru that she was not allowed to receive personal calls at her place of employment. Settled in April 2007.

• FCRA lawsuit against TransUnion - filed March 2007 in the United States District Court for the Southern District of Indiana. Case involves claims of erroneous publication by TransUnion of an account as thirty days late when in fact the account was never late. As a result, the client was charged higher interest rates on a home loan, resulting in more than $120,000 in liquidated damages. Settled in November 2008.

• Theft of Identity FCRA lawsuit against Equifax Credit Information Services, Experian Information Solutions, Trans Union and Verizon Wireless - filed April 2007 in Circuit Court of Washington County, Mississippi. Removed to United States District Court for Northern District of Mississippi. Client is a victim of identity theft. Unknown person in Illinois used client's identity to open an account with Verizon Wireless. Despite repeated disputes, neither Equifax, Experian, TransUnion nor Verizon would remove fraudulent account from client's credit reports. Client suffered multiple credit denials, resulting in the filing of a claim under the Fair Credit Reporting Act. Settled January 2009.

• Mixed file FCRA lawsuit against Equifax Credit Information Services - filed April 2007 in United States District Court for the Southern District of Mississippi, Southern Division. In Fair Credit Reporting Act litigation, client alleges that Equifax merged his credit file with that of his brother, causing the brother's derogatory credit to appear on the client's credit report. The client suffered multiple credit denials due to his brother’s bad credit appearing on his credit report. Settled in September 2008.

• Mixed file FCRA lawsuit against Equifax Credit Information Services and CSC Credit Services - filed May 2007 in United States District Court for the Southern District of Indiana. Client alleges in this Fair Credit Reporting Act case that Equifax merged her credit file with that of another person with the same first and last name and a similar social security number, leading to the denial of the client's credit application. CSC, Equifax’s agent, failed to correct the errors on the client's Equifax credit report despite repeated disputes. Settled in February 2008.

• Credit Error FCRA lawsuit against Credit Protection Association and Equifax Credit Information Services - filed May 2007 in United States District Court for District of Arizona. Fair Credit Reporting Act lawsuit arising from an account that was allegedly sent to collection in error. Client disputed erroneous collection to Equifax and Credit Protection on several occasions, yet both allegedly failed to remove the erroneous collection. Settled in January 2008.

• FDCPA litigation against Gallas & Schultz - filed in May 2007 in Circuit Court of Forrest County, Mississippi. Gallas & Schultz allegedly violated Fair Debt Collection Practices Act by threatening to sue client on time barred debt.

• FDCPA lawsuit against ER Solutions - filed in May 2007 in Circuit Court of Rankin County, Mississippi. Fair Debt Collection Practices Act claim arising from ER Solutions alleged violations of the FDCPA by threatening litigation against the client regarding time barred debt. Settled June 2007.

• FDCPA litigation against Allied Interstate - filed in June 2007 in Circuit Court of Carroll County, Mississippi. Allied Interstate allegedly committed multiple violations of the Fair Debt Collection Practices Act by discussing debt with the client’s wife and parents and other third parties, as well as repeatedly calling the client at his place of employment. Settled in April 2008.

• FDCPA Lawsuit against D.C. Brown & Associates - filed in April 2008 in the Circuit Court of Jackson County, Mississippi. This Fair Debt Collection Practices Act case involves a debt collector who allegedly threatened consumers with being arrested, having their personal property taken away and with a lawsuit over a $300 debt that was over ten years old and thus past the statute of limitations. The collection agency also allegedly cursed the Plaintiffs, calling them "lowlifes" and "deadbeats" in an attempt to embarrass them to pay this old debt.