Gorman v. Experian et al.

I’ve seen Experian ‘update’ a fresh date of status as a response to a consumer dispute all too often and here’s a case where it backfired on them.

Consumer did a deed-in-lieu of foreclosure in May 2002.  The Experian report listed the following prior to his July 2006 dispute:

“Status: Creditor received deed/Foreclosure proceedings started. $8,702 past due as of Oct 2002. Account history: Creditor received deed as of Oct 2002. Foreclosure proceedings started as of Sep 2002, Aug 2002, June 2002, 120 days as of May 2002, 90 days as of Apr 2002, 30 days as of Mar 2002” (emphasis added)

Dispute then gets filed with Experian in September 2006 and as a result HSBC informs Experian that the deed-in-lieu was May 2002.  Not only did HSBC verify the May 2002 date, but the customer sends in a copy of the deed-in-lieu as verification!  Doesn’t matter to Experian; they provide an updated ‘date of status’ for the consumer (IMO as a special thank you), as evidenced by the following after the dispute:

“Status: Creditor received deed/Past due 180 days. $8,702 past due as of Sep 2006. Account history: Creditor received deed as of Sep 2006, 180 days as of Sep 2002, Aug 2002, 120 days as of Jun 2002, 90 days as of May 2002, 60 days as of Apr 2002, 30 days as of Mar 2002. This account is scheduled to continue on record until Dec. 2008” (emphasis added).

Experian was taken to Court on this one and there’s a possibility that there could be punitive damages awarded in this case.  There’s a lot more going on than what I’ve typed (particularly that Experian loves the ACDV system and claims “we don’t do any other independent investigations”), but all in all, this opinion and order is a solid smack on Experian’s behind. 

Maybe the credit bureaus will get the message, and maybe they won’t.  Punitive damages are awarded for willful violation of the FCRA which per the Supreme Court includes “reckless disregard”.  Gorman may be entitled to punitive damages for Experian’s reckless disregard.  In my opinion, that would help them get the message.

Gorman v. Experian Information Solutions, Inc. et al (07 CV 1846 (RPP), S.D.NY, 2008)