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Public Citizen Tells Federal Appeals Court: Don’t Let Trans Union Off the Hook for Credit Reporting Error

April 18, 2016

Public Citizen Tells Federal Appeals Court: Don’t Let Trans Union Off the Hook for Credit Reporting Error

Reporting Agencies Must Conduct a Meaningful Reinvestigation Into Consumer Credit Disputes

WASHINGTON, D.C. – Trans Union, one of the three major consumer credit reporting agencies, failed to conduct a “reasonable reinvestigation” of a consumer’s disputed debt as required by the Fair Credit Reporting Act (FCRA), Public Citizen said in a brief filed today. Public Citizen is asking the U.S. Court of Appeals for the Seventh Circuit to reverse a district court’s decision dismissing the case.

Plaintiff Jeffrey Brill contacted Trans Union in 2014 to dispute a debt arising from an auto lease with Toyota Motor Credit Corporation listed on his credit report. “I was trying to buy a car when I found out about the fraudulent signature on the Toyota lease,” Brill said. “After I waited in the dealership for hours, the salesman came and told me I had credit problems. Before this, my credit was perfect. I was shocked.”

Brill provided Trans Union with documents demonstrating that his signature on the lease document had been forged. But instead of conducting a thorough reinvestigation of the disputed debt, Trans Union simply sent an automated query asking Toyota to confirm the debt, which Toyota did. Trans Union then refused to remove the erroneous report, even though the forged signature (see the image below) was clearly different from Brill’s signature on an earlier, genuine lease document that Brill sent to the agency for comparison.

“When a consumer disputes the reliability of a source of credit information, a reasonable reinvestigation requires more than just parroting the source of the disputed information,” said Scott Michelman, attorney for Public Citizen and lead attorney on the appeal. “Congress made clear in the statutory language of the FCRA that consumer reporting agencies must take an active role in resolving disputes, so that consumers like Jeffrey Brill do not have their credit wrongfully undermined by inaccurate reports.”

At the heart of the credit reporting system are the three major consumer reporting agencies: Equifax, Experian and Trans Union. As host of Last Week Tonight, John Oliver, documented in his April 10 show, as many as 25 percent of U.S. consumers may have errors in their reports, and consumers face potentially devastating economic repercussions when their reports contain inaccurate information. A bad credit report can stop consumers from obtaining credit cards, auto loans, mortgages, rental housing, bank accounts, insurance, and even employment. As Oliver’s piece noted, inaccuracy in credit reporting is a decades-old problem.

To mitigate the risk of inaccurate reporting, Congress included in the FCRA a requirement that reporting agencies “conduct a reasonable reinvestigation” of disputed information in a consumer’s report, “to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer’s right to privacy.” The reinvestigation conducted by Trans Union in this case fell short of that requirement.

As a result of Trans Union’s refusal to remove the incorrect report, Brill struggled with the economic consequences of tarnished credit for more than a year. Brill received less favorable interest rates and made larger down payments than he otherwise would have, spent additional time and resources to obtain credit, and had a credit account closed.

“I’m pursuing this appeal not only because of the harm Trans Union caused me, but also to send a message to Trans Union that they need to have a human being take a look at these disputes for all consumers,” Brill added. “If the credit bureaus won’t fix these errors, consumers are stuck with the consequences.”

Working with Public Citizen on the appeal is Madison, Wisconsin attorney Joel Winnig, who represented Mr. Brill in the district court.