Second Circuit Holds FCRA Preempts State Tort Claims

Macpherson v. JP Morgan Chase Bank, NA

Consumer alleged that Chase provided false information about his finances to Equifax, a consumer credit reporting agency. Chase removed the case to federal court and moved for dismissal under Fed.R.Civ.Pro. 12(b)(6), on the grounds that the consumer's claims were preempted by the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681t(b)(1)(F). Consumer appealed from the district court's dismissal of his state common law tort claims. The Second Circuit affirmed the judgment of the district court and held that the FCRA preempted consumer's state law claims against Chase.

Macpherson v. JPMorgan Chase

Mixed Credit Files - The Case of Angela Williams

Angela Williams filed a lawsuit against Equifax alleging that her Equifax credit report included more than two dozen negative accounts which did not belong on her credit report. The negative accounts actually belonged to another consumer named Angelina Williams. In addition to sharing almost identical names, Angela and Angelina also shared another important similarity - their social security numbers were almost identical except that the last two digits were reversed. Angela sent numerous disputes to Equifax trying to correct its reporting over a period of more than a decade. From time to time, Equifax would remove some of the inaccurate accounts from her credit file but those accounts would later appear in other versions of her credit report. Often times, when Angela would request a copy of her credit report, Equifax would return only incomplete credit reports since Equifax's database had created many different credit files for Angela; sometimes those files were put together into one report and sometimes they were not. As a result of this inaccurate reporting, Angela alleged she was repeatedly denied credit. In November 2007, Angela's case made its way to a Florida jury who entered a verdict in her favor and against Equifax for $219,000 in actual damages and $2.7 million in punitive damages.

How does Trans Union process consumer disputes?

In general, when Trans Union receives a dispute from a consumer, Trans Union investigates the dispute using one of two systems developed for the purpose of processing and tracking disputes, the Consumer Dispute Verification process (“CDV”) and the Automated Consumer Dispute Verification process (“ACDV”).  Through the ACDV process, Trans Union contacts the furnisher of the disputed credit information and, via an automated process, asks the furnisher to verify that the indicative (e.g., name, social security number, address, date of birth, etc.) information on the consumer matches the indicative information maintained in the furnisher’s records and is associated with the particular account being disputed.  Trans Union also asks the furnisher to verify the accuracy of the account information, e.g. account balance, payment history, credit limit, etc., being reported to Trans Union by the furnisher.

If the furnisher verifies that the reported information is correct, Trans Union updates the information on the consumer's credit file and notifies the consumer of that fact. If the furnisher reports that the information is inaccurate or can no longer be verified, or if the creditor does not respond within the required time, Trans Union deletes the information from the consumer's credit file and notifies the consumer that the information has been deleted.  Trans Union may employ additional procedures depending on the precise dispute involved and the circumstances of the case.

What is a Mixed or Merged Credit Report?

A mixed or merged credit report is the result of a consumer reporting agency's inaccurate merging of credit information (commonly referred to in the industry as "tradeline" information) and/or an entire credit file belonging to one consumer onto the credit report of another consumer. There are many different possible causes for the merging of tradelines but all of them relate in one way or another the algorithms (the database rules) used by consumer reporting agencies to match tradelines to a particular consumer's credit file. The success or failure of these algorithms or rules is both a function of the rules themselves and of the information provided by the furnishers of the tradeline information to the consumer reporting agencies.  In other words, a mixed credit report could be caused by an improper algorithm just as it could be caused by the inaccurate reporting of a consumer's personal or "indicative" information (e.g., name, social security number, address, date of birth, etc.) by the furnishers to the agencies.  These rules also determine which credit files are merged to create a complete credit report.  Therefore, a mixed credit report is sometimes the result of the mixing of two or more consumer credit files belonging to different consumers into one credit report.  Just as with mixed tradeline information a mixed credit file can be the result of an improper algorithm just as it can be the result of the indicative information used to compile the credit report.

Indiana Residents - Your Equifax Credit File Is Actually Owned By CSC

Most people know there are three national consumer reporting agencies - Trans Union, Equifax and Experian. However, if you are a resident of Indiana, then your "Equifax" credit report is actually a report compiled from a credit file owned by a company called CSC Credit Services.  CSC owns, manages and controls the file and all information within that file but stores the file on Equifax's database and reports the file through the Equifax reporting system.  If you discover inaccuracies on a credit report prepared by Equifax and you reside in Indiana, you should dispute those inaccuracies directly with CSC which you can do by clicking the following link: CSC Credit Report Disputes.  Note, CSC owns credit files for residents in fifteen (15) mid-western and central states. 

How Can You Obtain Your Credit Report?

You can obtain your credit report directly from each of the consumer reporting agencies -Trans Union, Equifax, Experian or CSC Credit Services.  The FCRA guarantees you access to your credit report for free from each of the three nationwide credit reporting companies —Trans Union, Equifax and Experian — every 12 months. Note that for all Indiana residents your Equifax credit report is created from credit files which, though housed on Equifax’s database, are actually owned by CSC Credit Services.  To obtain your free annual credit report you should visit AnnualCreditReport.com - the ONLY authorized source for the free annual credit report that's yours by law.

Have you found inaccurate information on your credit report?

If you are having problems related to inaccurate information on your credit report, we recommend that you investigate your credit history thoroughly.  The information below may assist you with your efforts.  In addition, you should attempt to collect the following information:

• Copies of all credit reports containing the inaccurate information and any previous credit reports you may possess;

• Copies of all dispute letters you wrote to the consumer reporting agencies or creditors and any responses you received;

• Copies of all documents that prove the information you are disputing is indeed inaccurate; and

• Copies of all documents that prove you have suffered damages as a result of the reporting errors: This includes letters turning you down for credit, notices of interest rate hikes, medical bills for stress-related ailments and other damages.

How to Dispute Errors on a Credit Report

Step 1: Obtain your free credit reports
Obtaining your credit report is the first step in disputing any inaccurate or wrong information which may appear on it. Federal law requires the three national credit reporting agencies, Equifax, Experian, and Trans Union, to provide you with a free credit report every year. Most likely, each of these credit reporting agencies has a credit file on you. Get all three of your credit reports.

You can get your free credit reports at AnnualCreditReport.com. This is the only official site to help consumers obtain their free credit report. You may contact the credit reporting agencies directly, but consumer beware! These credit reporting agencies own businesses which easily trick the consumer into buying their credit scores rather than providing the consumer with their actual free credit report (legally known as the "consumer report").

Step 2: Initiate dispute with the credit reporting agency
Dispute errors on your credit report by using the FTC's sample complaint letter. Make copies of supportive documentation and mail your dispute to the credit reporting agency reporting the error(s). Mail your dispute letter & enclosures via certified mail - return receipt to: 

Trans Union
Consumer Disclosure Center
P.O. Box 2000
Chester, PA 19022-2000
Phone: (800) 916-8800

Equifax
Complaint Department
P.O. Box 740256
Atlanta, GA 30374
Phone: (888) 873-5420

Experian
NCAC
701 Experian Parkway
Allen, TX 75013
Phone: (800) 583-4080

Step 3: Initiate dispute with the furnisher
Contact the furnisher of the inaccurate information. Use the FTC's sample complaint letter to use to dispute inaccurate information with providers. 

Step 4: Wait for response
Credit reporting agencies must investigate disputes made by consumers. Thirty (30) days after the dispute is initiated, credit reporting companies are required (by law) to provide consumers with the results. The results should be accompanied by a free credit report. If the disputed is not resolved, consider seeking legal action.

What is Credit History?

Credit history is a record of your past borrowing and repaying, including information about late payments and bankruptcy.  In other words, your credit history is your reputation about how much debt you have and how you repay that debt. Your credit history is created by the consumer reporting agencies through credit information they receive and compile from furnishers of credit information such as your mortgage lenders, credit card companies, automobile loan lenders and others.  These furnishers report personal information about you such as your name, address and social security number along with information about your debt, such as the amount of your debt, your payment history, etc.