Class Action Lawsuit against CRA's

Discussion in 'Credit Talk' started by kdp, Dec 16, 2002.

  1. kdp

    kdp Member

  2. georgiaboy

    georgiaboy Well-Known Member

    Happy Holidays CRAS he he he (snicker snicker)
     
  3. sassyinaz

    sassyinaz Well-Known Member

    Gotta LOVE it, thanks for finding it!!!!!!!!!!!

    Interesting the part about judgments not reported as joint too, think I'll try that.

    Sassy

    Credit report suit puts Equifax, rivals in hot seat

    By DAVID MCNAUGHTON
    Atlanta Journal-Constitution Staff Writer

    Franklin Clark went to court because he wanted the world to know he hadn't filed for bankruptcy. His case has evolved into a class action suit that involves millions of consumers and damage claims in the billions.

    If Clark wins, it could change the way companies like Equifax keep track of your personal finances.

    Clark never filed for bankruptcy, but he co-signed a truck loan for his son-in-law, who later did. Even though Clark said he made sure the truck payments were made on time and the loan was paid off, the connection to his son-in-law's bankruptcy came back to haunt him.

    When Clark tried to buy a car for himself, he was turned down because his own credit report carried a bankruptcy case notation. For Clark, it was a humiliation made worse because "everybody" in the little town of Belton, S.C., heard about it.

    "It was like I was white trash," Clark said.

    The 58-year-old mechanic is the point man in a case that challenges the accuracy of reports issued by the three largest purveyors of credit data in the world.

    Experian and TransUnion are defendants in addition to Atlanta-based Equifax. Information the companies use to compile their reports comes from banks, credit card companies, retailers and others that extend credit to consumers.

    "We are confident that the language used in our credit reports is accurate and completely understandable to the lenders who use them every day, and that there is no merit to claims that say otherwise," Equifax said in a statement. Experian and TransUnion would not comment.

    Inaccurate or imprecise credit reports have long been a sore point for consumer advocacy groups. That's because credit reports carry the bill-paying histories of virtually every consumer who has ever applied for credit, and they determine how much credit individuals are granted and at what cost.

    The Fair Credit Reporting Act, which governs the credit reporting industry, requires companies to use "reasonable procedures to ensure the maximum possible accuracy" of credit reports.

    There are estimates that a third or more of all credit reports contain errors, although attorneys for the plaintiffs acknowledged in court documents that no reliable statistics exist.

    The Consumer Federation of America and the National Credit Reporting Association, a trade organization, will release a study on credit report accuracy Tuesday in Washington.

    The study covers 500,000 credit reports. It shows "there's not 100 percent accuracy," said Stephen Brobeck, executive director of the Consumer Federation of America. He would not provide details of the study's findings.


    Financial stakes high

    What make's Clark's case more significant than other lawsuits alleging damage from credit report errors is that it was granted class status. Attorneys for Clark and his fellow plaintiffs believe it is one of only three so designated under the Fair Credit Reporting Act, and the largest by far.

    Class action status raises the financial stakes and gives plaintiffs the strength of an army. Without the status, individuals are on their own against larger and better financed legal opponents.

    "We don't think we had their attention until the judge certified the class," said Doug Smith, a Spartanburg, S.C., attorney and member of the plaintiffs' legal team.

    The defendant companies admitted as much in an unsuccessful appeal of the class action certification. They argued before the 4th U.S. Circuit Court of Appeals that the class designation would impose "intense settlement pressure" and would invite additional suits.

    "The class-certification order has transformed one or two individual claims, of very doubtful merit, into extremely high-stakes litigation with the prospect of damages verdicts exceeding $1.6 billion for each defendant," the companies argued.

    "That's a bazooka aimed at the head of the defendants," said Emory law professor Richard Freer, a specialist in civil law procedure. "Once a class is certified, the defense faces enormous potential liability. The incentive for the defendants to settle this case goes through the roof."

    For that reason, Freer thinks the case is unlikely to go to trial, which would begin in July if court-ordered mediation is not successful by Jan. 30.


    'It made me . . . sick'

    Fair Credit Reporting Act litigation is still in its infancy, according to Richard Rubin, a Santa Fe, N.M., lawyer who handles appeals for consumer plaintiffs.

    To win in court, consumers must prove credit report errors are willful. The 4th U.S. Circuit Court of Appeals defined a willful act as one done "knowingly and intentionally . . . in conscious disregard for the rights of the consumer."

    Congress amended the 1970 law in 1996 to include penalties of $100 to $1,000 for willful errors.

    Each of the companies identified about 1.6 million to 1.7 million consumers who fall into the Clark suit. It's not apparent whether that means a total of 5.1 million individuals are involved, because the three companies often have reports on the same people.

    People eligible to join the class action suit will be notified by Feb. 17, 2003.

    All the consumers have three things in common, according to U.S. District Judge Margaret Seymour, who is hearing the Clark case in Spartanburg, S.C.

    In granting class action status, Seymour held that the plaintiffs have not filed for bankruptcy; their credit reports include the notation "bankruptcy," and the notation does not indicate the account involved in a bankruptcy was jointly held.

    In their appeal, TransUnion, Equifax and Experian contended that even if credit reports include a bankruptcy notation, lenders can differentiate between individuals actually in bankruptcy and those who co-signed a note for the bankrupt consumer or hold a joint account with that person.

    Attorneys in Clark's case claim the distinction shown between who filed and who did not is not clear.

    Clark thinks the answer is for the credit reporting companies to fix the system.

    "It made me and my wife plum sick," said Clark, who has been out of work since September. "I just want to make them do what's right."

    Emory's Freer says such a case could change how credit companies fill out their reports.

    "If what (the defendants) are doing violates the Fair Credit Reporting Act, then the defendants need to change what they are doing," Freer said. "One way to make them do is to hit them with a big judgment."
     
  4. breeze

    breeze Well-Known Member

    Woohoo!! So good to see this!!!
     
  5. charlieslex

    charlieslex Well-Known Member

    There needs to be hundreds more like this out there if not thousands. Charlie
     
  6. NanaC

    NanaC Well-Known Member

    Just some info, at http://www.classactionamerica.com, there is a listing of class actions in a designated area, credit. One stood out, New York residents vs. Arrow finanacial. If you qualify, there's a link to get additioanl information.

    :)
     
  7. keepmine

    keepmine Well-Known Member

    Loved the white trash comment! Seriously, looks like Nelson vs Chase Manhattan is really getting some legs.
     
  8. Pat

    Pat Well-Known Member

    The study covers 500,000 credit reports. It shows "there's not 100 percent accuracy," said Stephen Brobeck, executive director of the Consumer Federation of America. He would not provide details of the study's findings.

    I wonder if they got permission from the 500,000 peoples credit files they looked at. And I'd really be curious how exactly they determined if they were accurate.
     
  9. picantel

    picantel Well-Known Member

    Fair Credit Reporting Act litigation is still in its infancy, according to Richard Rubin, a Santa Fe, N.M., lawyer who handles appeals for consumer plaintiffs.

    To win in court, consumers must prove credit report errors are willful. The 4th U.S. Circuit Court of Appeals defined a willful act as one done "knowingly and intentionally . . . in conscious disregard for the rights of the consumer."
    ------------------------------------------------------
    That is the best part of it. In my case experian knowingly and intentionally lied.
     
  10. whyspers

    whyspers Well-Known Member


    Hey Picantel...check your fax machine :)


    L
     
  11. WALLST

    WALLST Well-Known Member

  12. WALLST

    WALLST Well-Known Member

    b) Reporting of Account Balances was Inconsistent
    Inconsistencies regarding the balance on revolving accounts or collections appeared on
    82.4% of files, and inconsistencies regarding an accountâ??s credit limit appeared on 96.1%
    of files. These particular numbers are presented with one qualification. The software
    used to review reports presents information in a field titled â??credit limit/high credit.â?
    Researchers acknowledge that the raw data may contain separate information regarding
    the high credit (the highest amount ever charged on this account) and the credit limit (the
    amount of credit made available by the creditor) and the observations regarding
    inaccuracies in these fields may not reflect the data used to derive credit scores.
    However, even with this qualification, there are reasons to be concerned about incorrect
    reporting of balances or credit limits. Credit card lenders have an incentive to obscure
    the real credit limit from credit reports, as a means of retaining existing borrowers. If a
    credit card lender reports a credit limit as lower than the actual limit (for example by
    reporting the high credit as the credit limit) the borrower will appear to be closer to
    â??maxing-outâ? their credit, and will appear less attractive to competing credit card lenders.
    Thus, the consumer will be less likely to receive competing offers. Such misreporting
    also poses a significant risk to consumersâ?? overall credit rating. The practice of
    deliberately refusing to report complete and accurate account information in order
    obscure consumersâ?? credit has drawn repeated condemnation from John Hawke, the
    Comptroller of the Currency 26 . There is good reason to be concerned, given that one of the most frequently provided explanations for a consumerâ??s credit score is that the
    â??proportion of balances to credit limits is too high on bank revolving or other revolving
    accounts.â? This is the primary explanation listed on approximately one out of six reports.
    c) Contradictory or Missing Dates Occurred Frequently and Have
    the Potential to Distort a Consumerâ??s Record.
    Because more recent credit activity is more influential in determining a credit score, it is
    important that the relevant dates on accounts be accurate. This is primarily true for
    accounts that have gone into default. Creditors track the date of last activity on consumer
    accounts, but, because most creditors report to repositories in large batches of data on
    many accounts, credit repositories also track a second date â?? the last date the information
    was reported by the data provider. If a data provider fails to report any information in the
    date of last activity data field, the scoring software will assume that the date last reported
    is the date of last activity. Thus, if a consumer has an account that defaulted several
    years ago, but otherwise has good credit, under normal circumstances the relative impact
    of this account will diminish over time. However, if there is no date of last activity
    reported, this default will seem perpetually as recent as the last submission of a batch of
    data from that provider. One in five consumer files (21.6%) contained a defaulted
    account that did not report a date of last activity. One in four files (25.5%) contained
    contradictory information regarding the date of last activity.
     
  13. sassyinaz

    sassyinaz Well-Known Member

    wow Wallst, thanks!!!!!!!!!

    That's an eyeful!

    Sassy
     

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