http://news.corporate.findlaw.com/andrews/bt/prv/20070508/20070508_cortez.html
By LINDA COADY, ESQ., Andrews Publications Staff Writer
A federal jury in Philadelphia has awarded $800,000 in damages to a woman who said a credit-reporting agency falsely flagged her as a Colombian drug dealer, making it difficult for her to buy a car or rent an apartment.
Plaintiff Sandra Cortez said Trans Union refused to correct the error when she repeatedly asked to have the erroneous information removed from her credit report.
According to Cortez's complaint, Trans Union "deliberately, recklessly and negligently" failed to reasonably investigate her complaints as required by the Fair Credit Reporting Act and failed to note the disputed status of the inaccurate information on her credit report.
The Fair Credit Reporting Act is a federal law that regulates the collection, dissemination and use of consumer credit information.
After a three-day trial the U.S. District Court for the Eastern District of Pennsylvania jury ruled in favor of Cortez and determined that Trans Union had violated four provisions of the FCRA. The $800,000 award represented $50,000 in compensatory damages and $750,000 in punitive damages.
The jury found that Trans Union falsely attributed to Cortez the credit information of someone on the U.S. Treasury Department's watch list of known drug traffickers.
The verdict form included a written note from the jury to emphasize the importance of its decision: "The Trans Union business process needs to be completely revamped with much more focus on customer service and the consumer."
According to court papers, Cortez first realized that there was something amiss when she tried to buy a car and her credit report came back with an "alert" that she was a match for someone listed by the Treasury Department's Office of Foreign Assets Control.
The OFAC list includes about 3,300 groups and individuals who are designated as terrorists or drug traffickers. Banks and other financial institutions use the list to block transactions by drug dealers and other criminals, and other businesses use it to screen applicants for home and car loans and apartments.
Cortez said she was one of the victims of Trans Union's automated process, which issues an alert on a credit report where a consumer's name is similar to one on the OFAC list, even though the woman on the list was 27 years younger and had a different last name.
In it verdict the jury found that Trans Union violated four provisions of the Fair Credit Reporting Act by failing to:
- Conduct a proper initial investigation;
- Make proper disclosures to Cortez when she complained;
- Note the disputed information in subsequent reports; and
- Have procedures that would create "maximum possible accuracy" in its reports.
The jury also determined that the first three FCRA violations were "willful," thus exposing Trans Union to punitive damages.
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Cortez v. Trans Union LLC, No. 2:05-cv-05684-JF, verdict rendered (E.D. Pa. Apr. 26, 2007).
Privacy Litigation Reporter
Volume 04, Issue 09
05/08/2007
