Identity Theft Leads to Federal Lawsuit Against Citibank & Experian

The dispute process is critical to ensuring the accuracy of credit reporting, and to protecting the rights of the millions of consumers whose livelihoods, housing, insurance and access to credit depend on accurate reporting. 

Identity theft has led to a federal lawsuit being filed against Citibank North America, Inc. (Citibank) and Experian Information Solutions, Inc. (Experian). Both Citibank and Experian are being sued for violating the Fair Credit Reporting Act (FCRA) as a result of reporting fraudulent information (among other things) after it was disputed.

The case involves the plaintiff’s identity being stolen by a relative. The thief used the plaintiff’s identity to open two credit card accounts with Citibank. The thief maintained these accounts for several years until his death. After his death both accounts became derogatory and were eventually closed and left with unpaid balances and negative payment histories. Citibank reported the delinquent accounts and in return Experian prepared and issued consumer reports concerning the plaintiff that included this derogatory information.

The plaintiff disputed the accuracy of the two Citibank accounts with the consumer reporting agencies, including Experian, on at least three occasions and with Citibank itself on at least two occasions. The disputes were accompanied by an identity theft report, FTC Identity Theft Affidavit, a police report, and a copy of the FTC’s notice to furnishers regarding identity theft.

After receiving the disputes, the consumer reporting agencies forwarded them to Citibank. Citibank responded by verifying the accuracy of the their own accounts. Citibank’s investigations, if any, of the disputes involved merely verifying that the information it received from Experian and the other consumer reporting agencies (information it had itself provided to the agencies in the first place) matched its own computer records, without undertaking a meaningful examination of the underlying facts. Citibank merely verified the existence of disputed information, instead of actually investigating the dispute.

In turn, Experian simply accepted whatever Citibank told it without conducting any independent review or investigation of its own. This ‘investigation’ process is entirely circular in that its only main goal is to verify that information furnished by Citibank is maintained by Experian just as it was reported by Citibank. The concern is about the integrity of the data, not the underlying accuracy of it.

The dispute process is critical to ensuring the accuracy of credit reporting, and to protecting the rights of the millions of consumers whose livelihoods, housing, insurance and access to credit depend on accurate reporting. However, the dispute process is flawed and rightfully challenged.