Top Court May Set Clock on ID Fraud Lawsuits. (cover story) Subject(s): CREDIT bureaus -- United States; FINANCIAL institutions -- United States; EXPERIAN Information Solutions Inc. Source: American Banker, 03/28/2001, Vol. 166 Issue 60, p1, 2p A case the Supreme Court accepted this month will help to determine how vulnerable credit reporting agencies and financial institutions are to identity-theft lawsuits. The issue that the Supreme Court agreed on March 5 to hear in its upcoming session, which starts in October, concerns neither the bureaus' disclosure policies nor the accuracy of their record keeping, but the length of time that consumers have to sue for alleged Fair Credit Reporting Act violations. Under the law, which was passed in 1970, people can sue the bureaus for up to two years, but the matter of when the clock starts ticking is in dispute. None of the major bureaus are party to the Supreme Court case, which involves a consumer's complaint against TRW Inc., which sold its credit reporting business to Experian Information Solutions Inc. in 1996. But the high court's ruling will affect all the companies, plus the credit card issuers and banks that often get blamed by victims of identity fraud. For the industry, a decision in favor of the credit bureaus could shut the door on many consumer lawsuits. For the plaintiff, a victory would mean a return to district court, where if she is successful a jury would determine the amount of damages owed to her by TRW. Lawyers involved say that in similar suits, juries have awarded damages of over $1 million. In recent years credit bureaus have been held liable for damages suffered as a result of identity theft when information they supplied abetted the imposters. Victims left with ravaged credit histories have filed suits accusing the bureaus of violating the Fair Credit Reporting Act, arguing that the fraud took place because of the bureaus' loose standards for disclosure of credit reports and inadequate procedures to ensure the reports' accuracy. The law stipulates a two-year statute of limitations from the time that "liability arises," but it is unclear whether this period begins when fraud occurs or when the victim discovers that fraud has occurred. In the TRW case, an appeals court upheld that the two-year period began after the victim discovered the theft. But the credit bureaus -- which say that people should monitor their reports regularly to check for inaccuracies -- argue that the period began as soon as erroneous information was published in the plaintiff's credit report as a result of fraudulent activity. TRW and Experian declined to comment on the case. It is unclear whether they would share liability if a ruling against them is made, since the companies have not disclosed whether Experian assumed all liability when it bought TRW's credit reporting business. Experian, Trans Union LLC, Equifax Inc., and the Associated Credit Bureaus Inc. have jointly filed a friend-of-the-court brief for TRW. Counsel for the plaintiff, California resident Adelaide Andrews, will argue before the high court that TRW's interpretation of the statute of limitations -- which would invalidate her suit against the company -- is unfair, since it often takes longer than two years to discover that a credit record has been tampered with.