Consumer Protection

Inaccurate Credit Reporting

Result: 2nd-largest settlement ever under Fair Credit Reporting Act
Year: 2011

White v. Experian Information Solutions

In September 2011, the Court approved a $45 million settlement on behalf of 750,000 claimants against the nation’s three largest repositories of consumer credit information, Experian Information Solutions, Inc., Trans Union, LLC, and Equifax Information Services, LLC. Plaintiffs charged that defendants violated the Fair Credit Reporting Act (“FCRA”) by recklessly failing to follow reasonable procedures to ensure the accurate reporting of debts discharged in bankruptcy and by refusing to adequately investigate consumer disputes regarding the status of discharged accounts. The $45 million settlement constitutes the second-largest settlement ever in a lawsuit alleging violations of the FCRA.

TransUnion Class Action Lawsuit, Equifax Class Action Lawsuit, Experian Class Action Lawsuit

In addition, plaintiffs obtained approval of a historic settlement for injunctive relief earlier in the case. The injunctive relief required the retroactive correction and updating of consumers’ credit file information concerning discharged debt (affecting one million consumers who had filed for bankruptcy dating back to 2003), as well as new procedures to ensure that debts subject to future discharge orders will be similarly treated.

Demonstrating the significance of the case on the credit reporting industry, U.S. District Court Judge David O. Carter observed in the order granting final approval of the class action settlement that,

Plaintiffs’ claims largely presented questions of first impression … Prior to the injunctive relief order entered in the instant case, however, no verdict or reported decision had ever required Defendants to implement procedures to cross-check data between their furnishers and their public record providers.

“Prior to the litigation, consumers across America were denied mortgages, home refinancing and car loans, or paid higher interest rates due to debt and negative credit reports that should been removed from their credit files,” stated Lieff Cabraser’s Michael W. Sobol, who served as Plaintiffs’ Co-Lead Counsel. “Credit reporting agencies must now reconcile creditors’ information against available public bankruptcy records to assure maximum possible accuracy.”