Libel lawsuit against Fair Isaaic Corp for FICO scores?

[Anonymous]

Hey everyone.

I was thinking.

Companies like Fair Isaaic publish these often highly flawed FICO scores which hurt us.

They point their finger at the credit reporting agencies, which add to their data set that they use to "model" us. So the CRAs could share in on the pain.

Is there any reason there couldn't be a large class action lawsuit, or perhaps libel lawsuit for each customer?

Given that so many companies rely on these scores, the damage done by the incorrect information (and difficulty and cost of trying to get it corrected) has to be huge when you take into account of all the peoples data that is mined into the databases.  

The thought of people paying to buy their credit report or FICO score in an effort to correct the mistakes on their report makes me cringe. The companies are being enriched by storing and publishing disinformation on the very same people paying them to try to correct. 

[Anonymous]

Libel or defamation only apply if there is a statement made to a third party which is not true and which is damaging to you (which damages must be able to be proven).  FICO is not untrue, it is your true FICO score which is consistently applied. 

A low score is not damaging in and of itself.  The fact that HSBC or Orchard give credit at 500's and others require high 700's is proof that lenders use these scores in various ways that are not uniform in judging lending.  At least 10% of lenders do not use FICO.  Of the 90% who do, many have additional criteria or use other internal credit modeling to make decisions.

What is it about your score, or anyone's for that matter, that you feel is applicable to libel or defamation?

 If there is an error, there are protocols to correct it.  If the CRA's fail to correct, there are legal remedies to pursue.  These aren't necessarily easy or quick, but the process is laid out.

Obviously creditors have to have some way to judge credibility.  And while genuine error do occur, how would having no standards make things better for anyone?

Message Edited by txjohn on 05-26-2009 05:33 PM

[athensguy]

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@Anonymous wrote:

Libel or defamation only apply if there is a statement made to a third party which is not true and which is damaging to you (which damages must be able to be proven).  FICO is not untrue, it is your true FICO score which is consistently applied. 

A low score is not damaging in and of itself.  The fact that HSBC or Orchard give credit at 500's and others require high 700's is proof that lenders use these scores in various ways that are not uniform in judging lending.  At least 10% of lenders do not use FICO.  Of the 90% who do, many have additional criteria or use other internal credit modeling to make decisions.

What is it about your score, or anyone's for that matter, that you feel is applicable to libel or defamation?

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The CRAs would be more vulnerable to such an accusation of defamation if you could get a judge to allow you to proceed. They provide damaging erroneous information all day every day.

[Anonymous]

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@athensguy wrote:

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@Anonymous wrote:

Libel or defamation only apply if there is a statement made to a third party which is not true and which is damaging to you (which damages must be able to be proven).  FICO is not untrue, it is your true FICO score which is consistently applied. 

A low score is not damaging in and of itself.  The fact that HSBC or Orchard give credit at 500's and others require high 700's is proof that lenders use these scores in various ways that are not uniform in judging lending.  At least 10% of lenders do not use FICO.  Of the 90% who do, many have additional criteria or use other internal credit modeling to make decisions.

What is it about your score, or anyone's for that matter, that you feel is applicable to libel or defamation?

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The CRAs would be more vulnerable to such an accusation of defamation if you could get a judge to allow you to proceed. They provide damaging erroneous information all day every day.

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CRA's obtain their data from the subscribers (aka lenders).  Also, you would have to cite specific cases.  And those would not apply to anyone but that individual.  In attempting to pursue FICO, they use the CRA data.  The CRA data is supplied by the creditor/lender.  Who will you pursue?  It would be far simpler to merely file the necessary disputes, DV or other statutory protocols for correcting an error.

Message Edited by txjohn on 05-26-2009 05:44 PM

[athensguy]

If I hear bad info about you and spread it around, does my having heard it from somewhere else protect me from prosecution?

[Anonymous]

I think it would be virtually impossible to file a successful suit against FIC. For several reasons, the least of which being that libel cases are notoriously durn nigh impossible to prove successfully. Typically, it's the *intent* to defame. And I just don't see FIC as being so Orwellian or Machiavellian as to have that kind of intent.

Much like newspapers, FIC relies on supplied information. It's more or less simply a database that lenders access - the only blame that lies here is that they've become industry standard - something that usually happens when you're good at what you do.

They don't propose to have any information NOT supplied to them. Personally, I'd take that as being blameless as re libel. AKA, they don't *make* the credit reports, they just score'em. If you had a problem with your scores, you'd have to go to the source - AKA, those who report TO the CRAs and the CRAs themselves.

Now, if FIC would be so kind as to offer free FICOs to those who've been denied for credit, I'd think that was hunky-dory. But then, who wouldn't?

In the end, though, I think FICO scores and correcting CRs falls under the bumps and bruises of life.

[Anonymous]

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@athensguy wrote:
If I hear bad info about you and spread it around, does my having heard it from somewhere else protect me from prosecution?

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Yes, actually, it would. Unless it could be *proven* that you had malicious intent.

Libel is *notoriously* hard to prove. One of the nice things about freedom of speech.

ETA: Well ... I might have spoken too quickly. Not only do we have freedom of speech, we also seem to have the freedom to litigate frivolously.

Meaning, someone might not win a libel suit, but they could prolly still file it.

Message Edited by Wonderin on 05-26-2009 08:45 PM

[Anonymous]

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@athensguy wrote:
If I hear bad info about you and spread it around, does my having heard it from somewhere else protect me from prosecution?

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Yes, actually it does.  Craigslist, online forums and other "repositories" of information that are provided by third parties have consistently been held as "not" liable for the statements and content provided by the supplier/subscriber/etc. 

The information is not made public.  It is protected information which cannot be accessed by anyone except those who you authorize or who have a legally permissible purpose.  If the party you authorize to obtain your information denies you for credit because of information contained in your file, they must inform you of which bureau and what information.  You then have the opportunity to get a free copy, review for accuracy and dispute those items you deem inaccurate.  Upon investigation, if found to be inaccurate and corrected, you have the right to have your updated report sent to any party who obtained it while the incorrect information reported.

Also, "bad info" can legally be "spread around" if it is in fact true.  Libel and defamation require that it be "untrue" and damaging.  Damaging cannot be anecdotal or subjective.  There must be clear evidence of how the false and malicious statements damaged you.  The only protection you would have is of privacy.  If the bureau violated privacy and permissible purpose laws, then you have actionable cause for that violation against first the party who obtained the information falsely and secondly against the bureau if it can be shown that they should have reasonably been able to determine that the requesting party did not have a permissible purpose.

[athensguy]

I know you'd never win. The deck is stacked against the consumer. But by bad info, I mean info that has been proven to be incorrect but remains on your report illegally. We get a watered down version of defamation suits with a statutory cap on relief, though if you get a good enough lawyer with a good enough judge, you can sue for damages, which is basically a libel suit. But it's not against FICO, it's against CRAs or creditors.

[Anonymous]

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@athensguy wrote:
I know you'd never win. The deck is stacked against the consumer. But by bad info, I mean info that has been proven to be incorrect but remains on your report illegally. We get a watered down version of defamation suits with a statutory cap on relief, though if you get a good enough lawyer with a good enough judge, you can sue for damages, which is basically a libel suit. But it's not against FICO, it's against CRAs or creditors.

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If you have proof of a factual error which the creditor refuses to correct, then you have a case to pursue.  Libel and defamation are much harder to prove and therefore more expensive to pursue.  Having documented evidence of ID Theft, fraud, erroneous reporting data, etc. is a straight forward suit, which you can sue in small claims.  Going Libel & Defamation would have to go to State District and possibly Federal court, which is more expensive, takes much longer and then the nature of that complaint is on much shakier ground.

I would encourage you to file a small claims suit if you have a proven defect in reporting which you have notified the CRA's and creditor and they refuse to correct.  The suit alone will most likely cause a possible correction as "settlement" to avoid litigation.  The cost and time to file small claims is relatively simple, straight forward and doesn't cost an arm & leg.  You could move up one notch to a county court, but that would be unnecessary usually and just involve more hassle for you.

Message Edited by txjohn on 05-27-2009 11:15 AM