I readily admit that I am not an attorney, nor would I call myself well versed in law, however then how do you explain "statutory damages" that are awarded all the time in court? These are for the "known" that you have been damaged, but ackowledge the murkiness of quantifying.
Unfortunately, Enigma is right. Everything other than actual damages is speculation. That has been the rule since FCRA litigation ensued. Now, you may be able to change that with a novel argument. However, you would first have to withstand a 12b6 and then a JMOL. Not saying that it can't be done but, it would take a reversal of precedent.
Biz, you're correct here in some respects. The FCRA does provide statutory damages and fees. However, to invoke those you must show actual damage; i.e., some fashion of loss. This showing cannot be made here insofar as there is no loss of opportunity or higher rates being imposed. At least not yet. Now, the FDCPA is strict liability. You don't have to show anything other than the violation itself. It's like running a red light. Doesn't matter why you did it only that you did it. The FCRA is more like a negligence standard. You must show liability first and then, injury which was caused by the Defendant. A deflated FAKO score is not an actual injury. FCRA cases have seen courts hold one time after another that monetary loss must be shown. Kind of like standing in Constitutional matters.
I guess I still have a question about the "actual" damages aspect. I understand the aspect for awarding damages, but I cannot get around the "fact" that a lowered credit score WILL cause financial "damages" if "acted upon". The aspect of Fly's case is the identical (written) reports with disparity in scores. It seems presented to a judge, they would readily see the "damage", yes the "amount" is nebulous, but the damage is evident. Especially with Fly's "prudent" actions to remedy. There is just "screaming" common sense here that seems cannot be denied. I just cannot mentally wrap my mind around the "fact" that Fly would be required/expected to go out and "suffer" the damage(s), just to make the case. Perhaps we are looking at this incorrectly, (and jump in here Fly), what if Fly opens the box to demand why the score drop? What if the case is not about dollars, but about information? There has to be somewhere in the FCRA the "spirit" of a law regarding "protection" against suffering damages. The FCRA now states that a consumer has a right to get a credit score (but must pay). The other aspect here is that the FCRA is a bit outdated when you consider the "technology" now. Truthfully, there are two reports, one in "alpha" that we read, one in numeric code that scoring models read. How do we know that "both" are accurate and complete? Read that "compliant to the FCRA? Legal minds, help me out here, would the electronic "coded report" be considered bound by the FCRA? Somewhere the "bridge" has to be built between the "reporting" and the score. Lets' face it, it is ALL about the score, the credit report has become subordinated to it. Scorers has promoted this concept for years, and they have realized it. The main issue we have all pondered is how this scoring model works and calculates, perhaps a "shoe has dropped" in Fly's issue.
Just a "P.S."... I just have to say I think this is a great discussion thread. I'm sorry Fly that your scores took a hit, but the incident has lent some valuable insight into a murky field. I also wish to state that any posts I make here are purely discussional. I hope no one takes anything I say in the wrong way. I think this thread has opend up a great exchange of knowledge and perceptions. I mean nothing argumentative in any post, and I hope to foster productive discussion. Again, I think this is a great thread and exchange that has potential for productive results.
Biz, I think that we're on the same page here in terms of making ordinary sense of all of this. However, the law doesn't always make sense when legal damages are at issue. You hit the nail on the head when you pondered why would Fly be required to sustain damages before being able to prosecute this potential claim. Plain answer to that inquiry is because authority on the matter has said he must. Doesn't really matter why, only that he must. Until someone changes that posture, you must show damages in order to recoup legal relief. Now, is that a double edged sword, you bet it is. However, the current state of the law is that one must first be damaged in order to invoke the protection of the FCRA. They fact that it will likely happen is not enough. Their is no "be damaged or show an imminent likelyhood of damage" standard at play. Fly must show an acutal harm before he can proceed under the FCRA. Right now, I don't think that liability is even a forgone conclusion but, I digress. In order to make this claim actionable, there has to be a showing of loss. Some ripeness needs devolpment. I know it doesn't make sense but, it unfortunately, is what it is.
You make great points Apex (as usual). All you leave me with is the glaring aspect that perhaps the laws need to be changed. Perhaps to catch up with the true informational system that the credit industry works in. Perhaps what is so emotional here is that the credit scoring industry (read that FICO foremost) has been "untouched" by any regulation(s) for the most part. Yet, it is such a "crucial number" to our financial lives. This is amplified by the "secretive" nature of the model, how do you go after something you can't explain, or identify? After Fly's post, I feel this "coding" aspect is closer to the truth for unexplained score fluctuations. How many times have we "tried" to answer those questions on this forum? The fact that the CDIA manual was published lent validity to this "dark science". So, hopefully we all share a feeling that it is not right for the "scoring industry" to run with no accountability. How many times have we felt that frustration? So again, perhaps a time to rally and change laws?
And if that is accepted, then there must be a different explanation for Brown v Board, Gideon, Miranda, and Roe. The types of "screaming common sense" to which bizwiz alludes are what form the cornerstones of revolutionary changes in the interpretation of law. The above reversals of precedent are dramatic evidence of that. There is some screaming common sense involved in Flyingifr's allegations. This is by no means as earth shattering as the others, but it does have potential, far-ranging implications in credit-related law. I don't think the question is whether to proceed, but rather "how". There are several options. How might the Court view a proactive effort to determine actual damages; i.e. apply for credit and see what happens? To argue that he must wait until his FICO/FAKO fully recovers seems an unfair burden. What time frame might be reasonable? Doesn't the "guarantee" of the advertising claim "see the credit score your creditors will see" put a burden on the claimant? What might the Court say to such an allegation? Could it open the door for the inspection that is needed? We're not looking here for the decisive win, although that would be more than welcome. What we are looking for is the crack that can be exploited that might, just might, lead to that revolutionary change.
I understand that and I think that the thought behind going after FICO is a noble one. Your FICO score is important and as Biz aptly noted, crucial to your financial perspective. However, I just don't think these facts present a viable argument to reverse precendent. You are correct however, Oracle, in large part, that Fly would need to apply and see what happens. I'm not saying he must wait for his scores to come up, I'm saying that he must be damaged by what they are now. As for what he could do, nothing other than to get declined credit. I suppose you could file a Declaratory Motion but, that is a novel approach at best. Even still, you would only get equitable relief wherein they place his scores back to the previous level. Therefore, he needs to apply to a creditor which pulls Experian. AMEX is pulling them exclusively and they will not apply the PLUS score we're currently discussing now. They will use a FICO model. If he is declined, we have a loss based upon a FICO score drawn from Experian data. However, Experian would have caused this loss and thus, putting liability to FICO would be difficult. You could make the argument that it was the score though so who knows . . . With that said, I think that the FCRA should have a strict liability standard. Biz has duly noted that the laws should be amplified. You wouldn't see all of this "parroting" and "it's their fault" back and forth between furnishers and the agencies. However, you would need a full blown amendment to hook Fair Isaac insofar as they don't fall under the auspices of the FCRA now. UDAP claims are far better for that.
Accepting at face value the legal principle that for every wrong there is a remedy, this thread is venturing into the relationship between credit files and credit scores that is far and above what I have seen anywhere else in the past 5 years. In a way I am sorta honored to be the Guinea Pig in this. I realize that the discussion so far has been over theoretical damages, and given that this happened barely a week ago there has not yet been enough time for any damages to surface. The fact that I acted as promptly as possible to mitigate them strengthens my case. The possibility of credit denials is slim given that my Credit Score is still over 700. The possibility of a rate-jack or a cutback in available credit lines is there, however, given the shaky credit climate of today. Newspaper articles are reporting how the fallout from the SubPrime Mortgage debacle is now flowing into the Auto Loan and Credit card sectors are rife. The reduction in my Credit Score could be just enough to prompt some adverse action. When that happens I will have my actual damages. Until then all discussion is theoretical. The theoretical discussion is important, because a lot of questions are being explored at a plane of discussion that affects everyone. Some of the more important questions are: 1. Just who "owns" a credit score - the consumer about whom it applies or the company that computes it? Without ownership of the Score I have little standing to sue over its destruction. Nevertheless, in a day when the credit score is a de-facto statement of a person's worth, a falsely derogatory one could fall under the Libel and Slander statutes. Think of it this way - what would Congress do if it turned out that FICO built into its algorithm a calculation that deducts 50 points for everyone with a vowel at the end of their name, or an O' in their name? While the biases most likely aren't that blatant, it is obvious from this that there are some biases into a system that was designed to root human biases out (and replace them with computerized biases). 2. Under the laws of Libel and Slander, going back to the Zenger trial of colonial times, the rule has been "Truth is an Absolute Defense". But just what is Truth in this instance? Both credit files appear the same, but are regarded very differently. Which is true and, if they appear to a human being as identical, how is a human being supposed to tell the difference, especially when exercising FCRA rights? 3. FCRA requires full disclosure of a consumer's credit file to that consumer. It is now obvious that the term "full disclosure" has a very vague meaning when two "identical" credit files taken three days apart on the same person can yield two very different credit scores. 4. Is Credit Scoring a stacked deck? Are there features in it that circumvent the requirements of FCRA? Is Credit Scoring itself subject to FCRA? I could go on and on, but now that issue has come out in a clear case where there are no other mitigating factors, we have a right to some answers.
Fly, The one item you left out is the "Murphy's Law" aspect of this situation. The alignment of events where this "damage" (perhaps finally) occured to a person who would take action (legal) over it. I'm certain this exact set of circumstances has happened before, perhaps blindly, perhaps to a person who did not "appreciate" the impact. A key variable is that it happened to you, not someone who would let is pass by. To some of your points; I affirm that you "own" the "consequences" of the credit score, and that you do not own the calculation, or the "integrity of the (coded) data". This is quite a precarious ownership position, seemingly all of the bad, none of the good. I also agree that there is the "feel" of "Libel and Slander", analagous to a defamation of character. The FCRA item of "full disclosure" is the point I have the current issue with. Your situation seems almost a "shell game", whether intentional or not, whether with malice or not. Simply, "something does not compute". I put forth a feeling that the credit scoring industry is a "stacked deck", relating back to comments above re: ownership. I think many members share a feeling that they have (at least some) control over thier credit reports, but there is an abyss of seemingly no control over the credit scoring aspect. Your situation highlights that credit scoring "should" be subject to the FCRA, or perhaps a new "Act". One cannot ignore the importance of a credit score in this day, yet we are left no avenues to challenge it. The credit scoring industry has been able to exist in a "foggy" environment, where any "swings" were blind ones and striking at nothing but air. Your "case" has the potential to swing and hit something, even if it is solely the "right to know". At this point, I am dying to see a dispute to the Credit Reporting Agencies that alleges a possible coding error. I would love to see the actual response.
All good questions. With that said, file the action. As you know, I'd wait until you do sustain some damage (which is all that I've been saying herein). I'm not being a wiseguy wherein I'd like to see what happens. You may be able to blaze a trail so to speak when you get some damage. Personally, I've been looking for a piece of low hanging fruit to implicate Fair Isaac under something. I was waiting for this whole FICO 08' thing to come to pass but, it won't and thus, the ECOA argument seems to have flown away. Therefore, your individual action may be the thing to do it under some statutory framework.
Wow! Re-reading The FCRA... Actually I'm shocked now, I had to go read the FCRA again w/"fresh eyes" re: this subject. I now guess that Fly was right about a "stacked deck". If I'm reading it correctly, the FCRA actually "protects" againt having to "disclose" these items re: calculating a credit score! I'm reading it that they can legally claim to not have to disclose the real information. I hope I'm wrong in my layman's reading. It is interesting that there is language re: other mediums of communication, this hints at the "electronic" side of a report. Legal minds, please offer opinions on what the FCRA actually says about disclosure and credit scores, I hope I'm wrong here!
Lest anyone think this is an isolated incident - it isn't. It happened to me before - at the very beginning of my Credit Repair journey - with the very first creditor I took on. My first posts on CN all those years ago have it - Sherman Acquisitions dropped a TL on my credit report for a debt they had "purchased" after it had been discharged in bankruptcy. I lost about 60 points on that and after they deleted the TL I only got about half of them back. Back then I didn't know what I know now, and making a stink about it with a FICO score in the high 400's is somewhat less persuasive than one in the high 700's. The point is - I believe it is part of the Credit Score's inherent bias against rising scores - do anything to depress them. That seems to be policy with scores in the 400's and the 700's and presumably everywhere between.
Interesting information, I admit my interest w/the FICO model has mostly been "mechanical", understanding its algorithm. A key factor here is that a model like this should be "reproducable and repeatable", this is a major facet of the integrity of a model. In short, identical data should always yield the same "prediction", no matter where it comes from. Yet observation of many "cases" say this is not happening with the FICO model, or more importantly, that there is data being inputed that one cannot see. Your two incidents lend evidence that the model is "reproducing and repeating" its algorithm function, and that the variance is "underneath" in data not seen and/or not available. Now, the question becomes, "what is that data, and where is it coming from?" Permit me to ask a dumb question here: Has a "consumer" ever challenged the scores and/or model? The reason I ask is that I had a discussion today re: a similar situation (but not credit score related), and I did not realize the legal right to have the score justified to the "consumer", or the right to challenge it.
There have been many cases versus Fair Isaac and they usually come within Complaints against all the usual subjects. I haven't seen any verdicts against them along these lines insofar as the model is allegedly protected as proprietary.
In Discovery demand the source code or depose them. Do that and I'll wager they'll cut you a blank check.
Nobody has asked the question - have you pulled a FICO to prove or disprove a correlation? Have you read the T & C's for which you agreed? Then you realize your beef is not even with Experian, but rather a subsidiary company. You realize that you acknowledged that the report you are receiving is NOT a full disclosure. Then there are the boiler plate "no warranty as to accuracy" agreed to: Then there are there limitations of liability (assuming you live in a jurisdiction that disallows no liability clauses) Then rinse and repeat for the product specific (Plus Score) disclaimers.
