Chicago, IL and Philadelphia, PA – Recently, an Oregon jury awarded Judy Thomas $5.3 million dollars for errors found in her credit report. The Oregon woman battled with Chicago based credit reporting giant Trans Union for 6 years to have false information belonging to another woman, removed from her report. Thomas won her lawsuit against Trans Union for violations of the Fair Credit Reporting Act, the federal law which regulates the accuracy of information contained in credit reports and mandates that the credit reporting agencies investigate and correct mistakes within a 30 day period.
Trans Union, Equifax and Experian, or the “big 3” credit reporting agencies report most of the information that is used for consumer lending in this country. Often, a consumer is unaware of exactly what information is being reported about their own credit history, until they are unjustly turned down for a mortgage or installment loan. Only than, after ordering copies of their credit report, do they discover that there is an incorrect piece of information that has been reported which caused the denial.
According to consumer attorneys who handle Fair Credit Reporting Act claims, the system is inherent with flaws. The merging or mixing of credit files from 2 different, unrelated individuals into one report, or “mismerge” as it is know in the industry, is all too common. Jim Francis, of Francis & Mailman, P.C., a Philadelphia law firm that concentrates its practice in credit reporting cases, was not surprised by the verdict. “What is unfortunately known all too well by American consumers is that credit reports are riddled with errors and outdated information that often stands in the way of a job or mortgage. What is not known, is that the major credit reporting agencies are well aware of this problem and simply refuse to do anything about it.”
“What’s worse”, said Francis, “is that when a consumer disputes inaccurate information on her report, the credit reporting agencies almost always side with the companies reporting the information in the first place, rather than with the consumer, because they are the credit bureaus’ customers.” The problem, according to Francis, is financially motivated; “This is another case of the Ford Pinto. While the credit reporting agencies know full well that their cavalier and unlawful practices hurt consumers, they have consciously decided to keep the status quo out of an apparent belief that it is simply cheaper to defend against lawsuits than fix the problem at its core.”
Up until this point, most cases against the big credit reporting agencies have ended in settlements rather than in court. In a similar case against Trans Union in 1998, a jury in Mississippi awarded $4.5 million to Terry Cousin. Trans Union had mixed credit information from Cousin’s brother in with his credit report and did not remove the information, nor did they comply with the time period spelled out in the Fair Credit Act. Last year, the 5th Circuit Court of Appeals in New Orleans rejected the award, claiming Cousin erred on a technicality and did not have enough evidence to prove that Trans Union had violated the FCRA.
Mark Mailman of Francis & Mailman claims, “Juries are now awarding damages that take into account the emotional stress that goes along with a credit denial based on false information, as was the case with the $300,000 damages award in the Thomas verdict. He adds, “Your good credit rating is gone, and as a result of the ongoing battle to restore your rating, your emotional and physical health decline.”
What can a consumer do to ensure the information in their credit report is accurate? Attorney Larry Smith of Krohn & Moss, Ltd. a Chicago consumer law firm that handles FCRA cases advises, “Order a copy of your credit report from each of the 3 credit reporting agencies and look them over carefully for inaccuracies. It makes good sense to know exactly what the credit bureaus are reporting about you before you apply for that important installment loan, rather than after you have been turned down. He adds, “Should you find mistakes or errors, notify the CRA of your dispute in writing, keep a copy of the dispute letter and follow up within a month. If you have made numerous attempts to have the information investigated and removed and the CRA has not done this, you are entitled to sue the agency under the FCRA.”
According to attorneys Francis, Mailman and Smith, even after a credit bureau has investigated and removed inaccurate information, it may reappear again later. They advise ordering copies of your reportsevery 6 months to check that the negative item(s) is gone for good and that your credit history is reportedaccurately and is up to date.
