The United States Court of Appeals for the Tenth Circuit recently held that a credit reporting agency did not violate the federal Fair Credit Report Act in its response to a consumer's complaints of errors in his record. A copy of the opinion is attached.
The plaintiff individual was the victim of identity theft, which led to two fraudulent accounts being opened with Verizon Wireless in his name, as well as disputed charges as to his legitimate Verizon accounts. All accounts were closed, but because the plaintiff had legitimate accounts with Verizon, and failed to pay money owed under the legitimate accounts, Verizon reported his failure to pay the charges to the three major credit-reporting agencies, including Experian Information Solutions, Inc. (Experian). After disputing the reports and being dissatisfied with the response, the plaintiff brought a lawsuit in federal court naming various Verizon entities and Experian, among others, alleging violations of the Fair Credit Reporting Act (FCRA) and Utah law. The district court granted summary judgment in favor of Experian finding no violation of FCRA and dismissed the claims against the Verizon entities because the proper Verizon entity was not named as a defendant. The plaintiff then appealed.
With respect to Experian, the appellate court noted that the sole issue before it was whether Experian intentionally or recklessly failed to adequately investigate the plaintiff's dispute with Verizon. As you may recall, the FCRA provides that: "Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." 15 U.S.C. § 1681e(b). A "willful" violation is "either an intentional violation or a violation committed by an agency in reckless disregard of its duties under the FCRA." See Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 57–58 (2007). A consumer need not prove actual damages if the violation is willful.
In upholding the district court's ruling, the appellate court noted that the plaintiff presented little evidence regarding what Experian knew and when it knew it, and that there was "a dispute of fact regarding when and how Plaintiff complained to Experian." The court then went through the relevant facts in the course of its analysis:
The plaintiff stated that he disputed the charges online and that he did so approximately every six months, though he had no records of doing so. A letter from Experian produced in discovery indicated that it was not Plaintiff that first provided notice of a problem. Instead, it stated that Experian had "added an Initial Security Alert to [Plaintiff's] credit file as requested on [his] behalf by one or more of the nationwide consumer credit reporting agencies," and further advised Plaintiff of what information he would need to provide (such as his social security number and a police report) to place an extended fraud alert on his credit file and to block information on his file that he believed resulted from identity theft. Nevertheless, the plaintiff never sent any credit reporting agency a copy of the police report.
A few months later, the plaintiff sent a letter to the three credit-reporting agencies. The letter provided his name, his current address, and a contact telephone number. It requested a free credit report and the removal from his credit file of derogatory information provided by Verizon. Experian responded a week later in a letter stating that it could not honor his request because it was "unable to access [his] report using the identification information [he] provided." The letter explained that for a person to access his own credit report, Experian requires the person's full name, current mailing address and two proofs of the address, social security number, date of birth, and complete addresses for the past two years. The letter provided an internet address and phone number to contact if Plaintiff already had a personal credit report, thought the information to be inaccurate, and wished to request an investigation. There was no evidence of a response.
The Court held that, on this record, Experian was entitled to summary judgment on the willful misconduct claim. The Court reasoned that the standards employed by Experian and the information it requested from Plaintiff were reasonable. Further, the court noted that it had "been pointed to no described practice that would be a reckless violation of the FCRA." Therefore, the court held that a reasonable person reviewing the evidence before the district court could not find Experian to have committed a willful violation of the FCRA.
With respect to the Verizon entities, the Court noted that the issue was whether Plaintiff had named the right entity as a defendant. The Court held that the plaintiff had not, despite becoming aware of which Verizon entity was the correct entity months before the motions for summary judgment were heard. After finding that the delay was unexcused, the Court upheld the district court's denial of the plaintiff's motion for leave to amend his pleadings to name the proper entity.
Ralph T. Wutscher
Kahrl Wutscher LLP
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