Spector v. Equifax

David A. Szwak

Spector v. Equifax

Postby David A. Szwak » Mon Jan 02, 2006 9:20 pm

What Happens to Your Credit Report When You Sue the Credit Reporting Agency?

The Spector v. Equifax Information Services case is fascinating reading for those interested in how a credit reporting agency reacts when a consumer sues it. Because the case was remanded in part, it is unclear how it will ultimately be decided, if at all, but it provides a window into the world of credit reporting agency procedures.
William Spector sued Equifax, claiming Equifax failed to provide him with his own credit report in retaliation for his having sued the company on the basis that Equifax permitted users to review his credit file without a permissible purpose. The lengthy decision by the United States District Court for the District of Connecticut reviews Equifax’s policies for taking a consumer’s credit file “offline” as a result of a consumer lawsuit against the company. When a report is taken “offline,” a consumer cannot access his report electronically, but instead receives a message that he must contact the company. In addition, a creditor requesting a report on that consumer also receives a message stating that the consumer’s credit file is unavailable and that the creditor must contact
Equifax — this is called a “no file” response. (Based on the opinion in this case, it appears that most creditors do not contact a non-responsive credit reporting agency; they either go to another credit reporting agency for the information, or they deny the
credit.) Equifax’s purported rationale for taking reports “offline” and issuing “no file” responses is that a consumer in litigation with a credit reporting agency may be disputing the accuracy of information in his file, and locking up the credit report would prevent further dissemination of potentially inaccurate information. Alternatively, if the consumer was the subject of identity theft, taking his credit report offline could mitigate the problem. In Spector’s situation, he was denied for credit while his report was offline, and he was unable to get the company to provide him a copy of his credit report. He “tested” Equifax by sending a request for his wife’s report, which came promptly; this test apparently persuaded him that he was being singled out for retaliatory treatment by the credit reporting agency, an opinion that was probably hardened when he received his report only after a court-supervised settlement conference in his initial case against Equifax. The Court remanded the issue of whether Equifax willfully failed to company with the FCRA requirement to provide a credit report to a consumer upon
request, saying that although a close call, it was a decision appropriate for a jury. (Spector v. Equifax Information Services, 2004 WL 2251846 (D. Conn., 9/29/04).)

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