ID Theft Impostor Filed Bankruptcy to Include Fraud Accounts

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David A. Szwak

ID Theft Impostor Filed Bankruptcy to Include Fraud Accounts

Postby David A. Szwak » Thu Nov 03, 2005 11:09 am

 UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

JOHN GILBERT REITE PLAINTIFF

VS. C-00-20544 JW

AMERICAN EXPRESS, ET AL DEFENDANTS

EXPERT REPORT

TO THE HONORABLE JUDGE IN THE ABOVE ENTITLED AND CAPTIONED ACTION:
I have prepared the following Expert Report for your review and for consideration by the
jury and parties in this action. I have been retained by the plaintiff in this case. I attach hereto a copy of my current resume which will provide you a wealth of information about my background including articles I have published and lectures I have presented. You may note that I attained a Bachelor of Science in Quantitative Business Analysis from Louisiana State University. That degree program encompassed studies in computer programming, operations research, computer logic, database design, construction and maintenance, digital logic, as well as a number of other disciplines helpful to the understanding and assessment of issues underlying this action.

I previously testified by affidavit, report and/or deposition in a number of other cases
involving issues under the Fair Credit Reporting Act [FCRA]. I have attached a listing of such cases for your review. I have agreed to provide my unique expertise at an hourly rate of $225.00 per hour for non-testimonial consultation, review and advice, and $275.00 per hour for my deposition and court testimony. Those fees do not include my expenses which are separately charged.

In preparing this report, I have reviewed the following documents: Plaintiff's Initial
Disclosure; Plaintiff's First Supplemental Disclosure; Trans Union’s [TU’s] Initial Disclosures; Plaintiff's First Amended Complaint For Damages; TU’s cross-claim against Credit Bureau of Carmel and Pebble Beach [CBCAPB]; CBCAPB’s Answer to TU’s cross-claim; Joint Case Management Statement; TU’s Answer to First Amended Complaint For Damages; Plaintiff's Response to TU’s first set of interrogatories and requests for production; Plaintiff's Response to Equifax’s first set of interrogatories and requests for production; TU’s first supplemental disclosure; TU's Response to CBCAPB’s first set of interrogatories; Correspondence from L. Benge, Law Office of Sharon Kinsey; Communications, TILA Disclosure Statement, and mortgage credit report sent by National Pacific Mortgage to A. Perry on 5/2/01; Correspondence from A. Perry, with enclosures; Equifax’s Answer to First Amended Complaint For Damages; Equifax’s Initiall Disclosure; Equifax's Response to plaintiff’s first set of requests for production; Stipulation for leave or CBCAPB’s first amended answer to plaintiff’s first amended complaint; CBCAPB’s First amended answer to plaintiff’s first amended complaint; CBCAPB’s Initial Disclosure; CBCAPB's Response to plaintiff’s first set of requests for production; American Express Co.’s and American Express Travel Related Services’ [AmEx/AmEx TRS] Initial Disclosure; Plaintiff’s interrogatories and requests for production of documents to AmEx/AmEx TRS; AmEx/AmEx TRS’s answer to first amended complaint; AmEx/AmEx TRS’s first set of requests for production of documents to plaintiff; Experian’s Initial Disclosure; Experian’s answer to first amended complaint; Plaintiff’s requests for production of documents to Experian and Experian’s responses thereto; Affidavit of L. Gilzean, RCI Info. Svcs.; Various copies of plaintiff’s credit reports from the consumer reporting agencies; Notice of Voluntary Dismissal of RCA Info. Svcs.; Stipulation and Order For Relief From Case Management Schedule; Plaintiff’s dispute documentation; and mortgage report copies. I reviewed the various documents produced in the above mentioned disclosures and document productions though I did not list each and every page separately in this report. I also reviewed some of the reinvestigation procedures of the national consumer reporting agencies, TU, Experian and Equifax, as well as Equifax’s affiliate CSC Credit Services. As some of those materials may be protected by confidentiality agreements and protective orders, I have not listed them herein but refer to them in connection with my studies and in forming certain opinions. I have also reviewed the standard subscriber contracts of those agencies with their subscriber clientele. I have also reviewed the consumer dispute verification procedures of these defendants. In forming my opinions, I have also relied upon a large number of sources from which I learned the details of automated application processing, credit extension processes, procedures and guidelines, credit device delivery, point of sale processes, billing and credit reporting procedures, reinvestigation and dispute processes, procedures and guidelines, fraud investigations and credit reporting correction methods. From my large base of clients and from industry publications and statements, I learned a great deal about the variety of damages suffered by credit reporting victims, the consumers whose credit reports reflect inaccurate and damaging data.

The facts upon which I have relied in forming my opinions are principally set forth in plaintiff's complaint and the documents described above. Plaintiff and his father have different middle names and different social security numbers, dates of birth and other identifiers. Plaintiff’s father reportedly used his son’s [plaintiff’s] social security number to commit application fraud thereby opening two AmEx/AmEx TRS accounts. The defrauder used the accounts to charge items. Roughly $7,254.00 in charges were made, according to records produced. The fraud accounts credit card device[s] bore the imposter’s name, not plaintiff’s name. At no time did plaintiff know about the fraud or consent to it. Plaintiff subsequently learned of the fraud as described below.

The defrauder, in a most unusual move, filed a bankruptcy proceeding in March, 1997 and listed the two fraud accounts as part of the imposter’s bankruptcy debts to be discharged. The imposter’s bankruptcy was filed in the imposter’s true social security number, not plaintiff’s social security number or other identifiers. AmEx/AmEx TRS received notice of the bankruptcy proceeding and failed to object to the discharge or to otherwise notify plaintiff of the unique problem existing. The two fraud accounts were discharged in the imposter’s bankruptcy on June 19, 1997.

Plaintiff had his legitimate credit line with Chevy Chase Bank terminated in mid-April, 1997, after that Bank received an unfavorable credit report about plaintiff which suggested that plaintiff had two very derogatory AmEx/AmEx TRS accounts. Plaintiff set about obtaining his credit reports thereafter and, with usual delays caused by the agencies, plaintiff received his report in June, 1997. Plaintiff was not aware of the fraud accounts until mid-June 1997 when he learned that his credit report [tri-merged “Privacy Guard” report] contained the two fraud accounts and the bankruptcy notations in connection with the account reportings. These two items were very derogatory and should not have been attributed to plaintiff, as plaintiff played no part in the fraud and could not be liable.

Upon learning of the two fraud accounts, plaintiff made efforts to contact the consumer reporting agencies and AmEx/AmEx TRS, by phone, to dispute the items and resolve the matter quickly since plaintiff needed access to his credit at that time. After telephonic efforts proved fruitless, in August 1997, plaintiff wrote a dispute letter to the defendants and conveyed his dispute and requested resolution. Plaintiff wanted the defendants to permanently remove the fraud accounts and any associated reportings from his credit reports and to cease associating him with the fraud accounts.

Plaintiff has never filed a bankruptcy or sought to avoid his creditors. Plaintiff’s credit was superior, prior to the wrongful reporting of the fraud accounts. Despite plaintiff’s protestations, the defendants kept reporting the fraud accounts and attributing them to plaintiff. AmEx/AmEx TRS refused to accept the fact that they had issued fraud accounts to an imposter and, interestingly, were pursuing collection of discharged fraud accounts.

Upon plaintiff’s disputes, AmEx/AmEx TRS insisted that plaintiff file criminal charges against the imposter before AmEx/AmEx TRS would take any action to investigate and correct the false reportings AmEx/AmEx TRS made about plaintiff. This improper, illegal and unsavory tactic is not uncommon. I have witnessed a number of duped creditors, in “family fraud” cases and other fraud cases, make efforts to “hold as hostage” the victim’s credit report while making the victim perform extraordinary feats. A credit fraud victim can only file a report about such an incident and cannot force a governmental agency to prosecute a defrauder. Of course, the victim has no legal obligation to do anything. I note that AmEx/AmEx TRS did not pursue prosecution of the imposter and they have not produced, in discovery or otherwise, any police report or incident report made to any governmental agency. Creditors, like AmEx/AmEx TRS, highlight the control over the consumer reporting agencies that they have in cases like this. The creditors merely insist that the derogatory data remain. The creditors assign impossible and extremely burdensome tasks to the victim while never intending to correct the false reportings. The hope is that the consumer will become frustrated and merely walk away or pay the fraud charges in the mistaken belief that the false data will be removed. Here, plaintiff refused to be extorted by AmEx/AmEx TRS.

In this case, TU has attempted to contractually displace its FCRA reinvestigative duties on to a smaller, local affiliate, CBCAPB. TU is a large, national, privately-owned, consumer reporting agency, to whom plaintiff disputed the fraud accounts. TU enlists subscribers, some of whom report data about plaintiff. Those subscribers send data transfers, by various means but usually by magnetic tape, to TU on a periodic basis, usually monthly, for TU to upload and add to TU’s existing consumer credit database. TU’s subscribers may then purchase consumer reports and other information about consumers, including plaintiff, at greatly reduced rates from the prices paid by consumers.

TU contracts with smaller, local affiliate bureaus [CBCAPB, etc.] to have the smaller bureau “own” the data files for certain zip codes. The smaller bureau is expected to conduct TU’s incoming consumer dispute reinvestigations, for consumer files bearing their addresses within their assigned zip codes, for a very small slice of the profit pie from the sales of certain data about certain consumers in those zip codes. All the while, TU maintains sole control over the system and its design and functioning. All that TU has done is to try to avoid exposure under 15 U.S.C. 1681i[a] by contractually proclaiming that certain data [an incorporeal by nature], in TU’s computer, is “owned” by the affiliate. Yet the affiliate cannot remove its data or otherwise control the TU system. TU owns the CRONUS computer database system and controls its entire functioning process. TU houses the system and provides the electricity allowing the database to operate. TU sells the data to all of its subscriber base and other affiliated entities and bureaus. Here, CBCAPB is reliant upon TU for its existence. Plaintiff’s disputes to TU were properly placed.

TU is attempting to have the local bureau indemnify and defend TU in this case by way of the cross-claim. The smaller bureau, CBCAPB, has no way to control the entry of data into plaintiff’s credit reports. The smaller bureau may reinvestigate items, at the direction of TU and subject to TU’s system controls and rules. I reviewed a letter by the imposter to the defendants relating that the fraud accounts did not belong to plaintiff and acknowledging the wrongful actions by the imposter. That letter was apparently sent to the defendants in the August, 1997.

Again, I note that the defendants each got notice of plaintiff’s disputes in the Summer of 1997. Plaintiff advised the defendants of the application fraud. Application fraud is a very common issue to the consumer reporting agencies and their creditors/subscribers, including AmEx/AmEx TRS. I find that the consumer reporting agencies/defendants sent consumer dispute verification documentation [ACDVs/CDVs], as part of their normal business practices, to AmEx/AmEx TRS thereby further informing AmEx/AmEx TRS of plaintiff’s disputes. I found no evidence that AmEx/AmEx TRS performed any reinvestigation. There was no inquiry into any of the agencies’ records by AmEx/AmEx TRS. No inquiry is recorded. AmEx/AmEx TRS’s continued reportings of the fraud accounts and attributing them to plaintiff evidences an intention to collect from plaintiff. Otherwise, AmEx/AmEx TRS would have and could have easily removed plaintiff’s personal identifiers from the trade reportings and directed additional changes in the reportings by their authorized agents and mouthpieces, the consumer reporting agencies. In September, 1997 Novus/Discover Card Services accessed plaintiff’s credit reports from all three national consumer reporting agencies, Equifax, Experian and TU. Novus/Discover Card closed plaintiff’s legitimate and existing line of credit with them. This scenario is very common.

Many subscribers subscriber to an account monitoring mechanism afforded by the agencies and receive periodic notice of their customer’s credit score and adverse action coding or they obtain an alert notice if the customer’s credit report begins to show derogatory data, subject to pre-set parameters. Account monitoring is an automated process of periodic review of credit scores derived from credit reports generated about a select group of consumers, usually a specific subscriber’s customer base. The scores are generated for the base and then compared against pre-determined parameters. Those customers falling below the parameters are reported to the subscriber as deficient and suitable for adverse action. The subscribers then take adverse action, either by shutting off the consumer’s credit line, reducing the credit line, raising the teaser interest rate, terminating the relationship entirely, or by making inquiry to the consumer about the deficient score. This automated score and assess process is an additional service provided by the agencies, for a fee. In October, 1997 plaintiff again disputed the fraudulent AmEx/AmEx TRS accounts to the defendants. Equifax responded with a post-reinvestigation report indicating that AmEx/AmEx TRS verified and confirmed that the derogatory data [both fraud accouts] should remain reporting about plaintiff.

In 1998, plaintiff again obtained his credit reports from at least two sources and those reports contained the AmEx/AmEx TRS fraud accounts and derogatory references. I believe that plaintiff continued to dispute the fraud account reportings. Each such dispute to the agencies triggered reinvestigation ACDVs/CDVs to be sent to AmEx/AmEx TRS by the agencies, as contemplated by 15 U.S.C. 1681i[a] and 1681s-2[b]. In March 1999, the imposter again wrote the defendants stating that the subject fraud accounts did not belong to plaintiff. It appears that plaintiff continued to dispute the fraud accounts and offer proof that he was not involved in the imposter’s application fraud scheme.

Plaintiff’s November 22, 1999 Experian report still listed the fraud account reportings by AmEx/AmEx TRS and showed that the accounts had been re-reported as of June 27, 1999 and July 14, 1999 respectively. The report listed inquiries made by Experian subscribers. The inquiry section identified companies who accessed plaintiff’s consumer report and those reports would have contained the erroneous, derogatory fraud account reportings. The report showed that the most recent inquiry was by Bank of the West on April 30, 1999, as of the November 22, 1999 Experian report. It is clear that plaintiff lodged more disputes to the defendants. On or about December 27, 1999, Experian reported to plaintiff again that AmEx/AmEx TRS verified and confirmed the fraud account reportings and directed Experian to continue to report such items about plaintiff.

Credit reporting is a willful, purposeful, and volitional act. No private entity is legally required to report data to consumer reporting agencies. No private entity can be forced to report their customer’s data. However, if they choose to report data about their customers [and alleged customers] then the subscriber accepts the duties and risks, along with the great benefits, which come along with that privilege. Credit reporting is a negative information-based system and the agencies score the negative. Emphasis has always been placed on the negative. Credit scoring and adverse action coding also accentuate the negative.

Despite plaintiff’s continued protestations, the fraud account reportings continued to be made by AmEx/AmEx TRS to the consumer reporting agencies and the agencies continued, as their subscribers’ mouthpiece, to re-report the negative, false information to third parties. In January, 2000, Equifax reported that AmEx/AmEx TRS failed to respond to a consumer dispute verification [CDV/ACDV] document sent to AmEx/AmEx TRS by Equifax conveying plaintiff’s most recent and continued disputes. Equifax was required to delete the false data. Plaintiff thought that his Equifax report was finally cleared of the fraud accounts. This relief was short-lived as plaintiff was subsequently served with notice that Equifax was replacing the same false, derogatory data back into plaintiff’s Equifax credit reports. Equifax claimed that AmEx/AmEx TRS provided it a late verification of the fraud account reportings so Equifax replaced the negative, false, fraud-related accounts back into plaintiff’s credit reports. This replacement of data occurred shortly after plaintiff was advised that the fraud accounts were being deleted.

Plaintiff again complained and disputed the fraud accounts to the defendants. At this point it appears that AmEx/AmEx TRS had received plaintiff’s disputes and complaints at least 16 times. This figure is derived based upon plaintiff’s disputes directly to AmEx/AmEx TRS, as well as disputes to the three national consumer reporting agencies which, in turn, triggered reinvestigation notices [CDVs/ACDVs] from the agencies to AmEx/AmEx TRS on each such dispute. Thus, when plaintiff disputed the matter to all three agencies, three CDVs/ACDVs are sent to AmEx/AmEx TRS. Each dispute would have caused four separate notices to be received by AmEx/AmEx TRS. On each such set of disputes, three of the notices from the agencies to AmEx/AmEx TRS triggered section 1681s-2[b] duties. A total of four is derived from the direct communication of the dispute, plus separate notices from each of the three agencies.

In January, 2000 AmEx/AmEx TRS wrote plaintiff back, from plaintiff’s most recent and continued disputes and AmEx/AmEx TRS apologized to plaintiff. AmEx/AmEx TRS asked plaintiff to again leap hurdles and provide more proof. In January, 2000 plaintiff received a post-reinvestigation credit report from TU and that report continued to contain the derogatory, false fraud account reportings by AmEx/AmEx TRS. Thus, again upon notice directly from plaintiff and from the three national credit reporting agencies, TU, Equifax and Experian, AmEx/AmEx TRS again verified its false reportings and directed the agencies to continue publishing the false data about plaintiff.

In June, 2000 AmEx/AmEx TRS received yet another set of disputes from plaintiff. This time AmEx/AmEx TRS wrote plaintiff claiming that AmEx/AmEx TRS was removing plaintiff’s identifiers from the subject fraud accounts and related reportings. A second very similar letter from AmEx/AmEx TRS was received by plaintiff again assuring him that AmEx/AmEx TRS was deleting their false reportings about plaintiff.

Nonetheless, in late June, 2000, pursuant to plaintiff’s most recent disputes and complaints lodged to Experian, Experian sent plaintiff a post-reinvestigation [CDF] report indicating that AmEx/AmEx TRS again directed Experian to continue reporting both fraud accounts and attributing them to plaintiff. The report indicated that AmEx/AmEx TRS was reviewing one account but had advised Experian that the other account was to remain and was not under review. In sum, there had been no change in the reporting of the fraud accounts and they continued to plague plaintiff’s credit reports. In August, 2000 plaintiff was denied credit by MBNA America Bank. Plaintiff’s TU credit report was cited by MBNA as the source of the derogatory data causing the denial.

In this case AmEx/AmEx TRS is a "users" and “furnishers” of credit information. Experian, Equifax, TU, and CBCAPB are “consumer reporting agencies” as contemplated by the FCRA, 15 U.S.C. 1681a[f]. AmEx/AmEx TRS maintains subscriber contracts with Experian f/k/a TRW Inc., Equifax and TU. AmEx/AmEx TRS voluntarily and freely supplies data about its customer [and alleged customer] base to those agencies.

AmEx/AmEx TRS has script software, terminal access, and an ability to access and obtain all types of profiles/reports from those agencies, including personal consumer report [credit reports] and a number of other specialized services/reports generated and supplied by those agencies. Further, they report data to those agencies by Metro Tape format and that data is uniformly uploaded and placed in those agencies’ databases.

Credit report generation occurs from evaluation of individual data files which are scored according to point generation based upon matching points of correspondence between terminal input and individual file identifiers. Individual files scoring adequate points assigned based upon matches between inputted data and file identifiers will be compiled to produce a single report. In essence, a single report may contain multiple files depending upon files existing in the database. Those reports contain a vast amount of personal, credit and lifestyle information.

There is a growing problem of credit fraud and misuse of personal and credit data. The creditors, like AmEx/AmEx TRS, not only foolishly part with their money/merchandise when they issue a fraud account, but they compound the problem by purposefully reporting the fraud account data to the agencies and by refusing to correct their foreseeable and obvious mistakes.

It is my opinion that the FCRA was enacted in order to ensure confidentiality, accuracy and responsible handling and use of personal and credit information. It is my opinion that the FCRA is a remedial act designed to protect consumers from unwarranted intrusions and other harms arising from inaccurate, obsolete and immaterial data. The FCRA is also intended to deter illegal, improper and tortious conduct directed at consumers. In this case, it seems clear that AmEx/AmEx TRS intends to collect the fraud account balances from plaintiff. Credit reporting is the best and cheapest collection tool available to creditors and collectors. These companies often use the credit report and their ability to dun consumers like an axe to the neck of the consumer in order to force the consumer to pay whatever amount the creditor or collector claims entitlement to. Like here, creditors and collectors frequently hold the report hostage and force consumers to do as commanded, even when the consumer does not owe the balance or charges.

The records I have reviewed show that AmEx/AmEx TRS recklessly issued a fraud account by failing to perform a reasonable and necessary investigation of the credit application to determine the true identity of the applicant. AmEx/AmEx TRS had a number of pieces of data which it could have investigated to determine if the applicant was plaintiff. No references were checked. No calls to plaintiff. There were no checks between the plaintiff’s credit report and the application to see obvious discrepancies. AmEx/AmEx TRS simply issued the fraud accounts based on favorable credit scores and the strength of plaintiff’s credit reports, at those times, and credit scores generated in the automated application processing of the fraud applications. This first failure was compounded by a second fraud account and application processing by AmEx/AmEx TRS. AmEx/AmEx TRS knew it was going to report credit data arising from each such account and AmEx/AmEx TRS took no care in the application phase with specific knowledge of its future reporting of data. AmEx/AmEx TRS never took any efforts to check identification at any stage to determine if the imposter matched the applications. AmEx/AmEx TRS was bound to perform as a reasonable person would, under the circumstances. It is my opinion that AmEx/AmEx TRS’s acts and omissions fell below the required standard of care.

The imposter even filed a bankruptcy in his real social security number and listed the fraud accounts. AmEx/AmEx TRS had to know of those discrepancies at that time. Despite discharge of the debts in the bankruptcy, AmEx/AmEx TRS continued forward trying to collect the fraud accounts from plaintiff. At no time did AmEx/AmEx TRS try to determine why the bankruptcy listed one identity while the fraud accounts listed plaintiff’s identity.

AmEx/AmEx TRS is bound to use reasonable care. The standard of care would encompass what a reasonably prudent person would have done under the circumstances. From my experience, AmEx/AmEx TRS should have taken much greater care to investigate the applications and, at the point of notice of the bankruptcy, AmEx/AmEx TRS should have examined its source documents and file screen and billing records to learn that the bankruptcy identity did not match the applications. AmEx/AmEx TRS did not require identification checks at the point of sale. Thus merchandise was tendered to the imposter. Of course, at some point in time, AmEx/AmEx TRS actually provided the imposter with credit cards bearing his identity and not plaintiff’s identity.

Nonetheless, AmEx/AmEx TRS received disputes from the plaintiff, both directly and via the consumer reporting agencies, and AmEx/AmEx TRS had a clear understanding of the problem in June 1997. However, over three full years later, AmEx/AmEx TRS was still reporting the fraud accounts and attributing those accounts to plaintiff. The sole purpose of reporting the accounts about plaintiff was AmEx/AmEx TRS’s hope to collect from plaintiff. Subscribers utilize a code between themselves to strong-arm consumers and force compliance from consumers who fail to perform as required by another reporting subscriber. In essence, if a consumer has a negative item on his/her credit report, it is very common for a potential creditor to coax the consumer to pay or “clear up” the derogatory item before the prospective creditor/subscriber will consider an extension of a benefit to the consumer. Of course, even paying the item will not remove the historical data from consideration. Further, the adverse data is used in credit scoring, profile summaries, and adverse action coding.

In this case, AmEx/AmEx TRS had many opportunities to consider their reportings and to clear up the erroneous remarks. AmEx/AmEx TRS knew that plaintiff was suffering credit denials and adverse action based upon the false reportings. AmEx/AmEx TRS’s acts and omissions fell well below the applicable standards of care imposed. The intentional reporting and re-reporting of the false data cannot be deemed accidental or happenstance.

The consumer reporting agencies were likewise bound to exercise reasonable care. The agencies were bound to utilize reasonable procedures in preparing and issuing consumer credit reports about plaintiff. It is my opinion that the preparation and publication of the various reports and derivative reports, after the agencies received plaintiff's first dispute of the fraud accounts, fell below the applicable standard of care. The agencies showed a lack of regard for “maximum possible accuracy” and, instead, opted to parrot and mimic their subscribers, AmEx/AmEx TRS. It is my opinion that the agencies are bound to act fairly and impartially in evaluating and resolving consumer disputes. Like in every other instance, the agencies rather adopt and use a policy favoring the subscriber. The agencies routinely refuse to correct or delete data unless the subscriber instructs the change or deletion.

Here, plaintiff repeatedly complained. The agencies conveyed the disputes to the subscribers, AmEx/AmEx TRS, but on each occasion, merely accepted AmEx/AmEx TRS's verification as the final word. It is my opinion that the agencies also failed in their reinvestigation duties. The agencies failed to considered the imposter's admission. They failed to seek additional items of evidence in an effort to determine the validity of plaintiff's disputes.

The agencies had a duty to exercise reasonable care. They were bound to utilize reasonable procedures to assure proper reinvestigation of disputed data and to take corrective action to remedy errors. Here, the agencies' actions and inactions fell far below the standards of care imposed.

The agencies' records contained plain signs of conflicting data between historical records regarding plaintiff and those reporting and records of AmEx/AmEx TRS. The agencies relied solely on the perfunctory CDV/ACDV process. Particularly in fraud cases, it is important for the agencies to step in between the duped creditor(s) and the victim. Often creditors/subscribers are unwilling to accept that they were duped by an imposter, although this type of fraud is well-known and rampant.

Plaintiff has expressed and shown proof of damages related to various credit denials. Such damages are expected since the duped creditor has caused false, damaging data to be injected into the victim's credit reports. It is my opinion that consumers who work hard to maintain favorable credit, are adversely impacted and affected by the credit denials to a greater degree than consumers with bad credit who expect adverse action and often approach credit requests with knowledge that they will be denied.

Consumers, including plaintiff, are forced to buy their credit ratings. In essence, a good credit rating is not a birth right, though the law has always presumed a person to have a good reputation. Consumers are not afforded that presumption in the banking and credit marketplace.

Good credit ratings result from paying, for many years, high interest rates, advance payments, add on fees and other assessments to subscribers, who then, hopefully, report positive information in connection with your accounts. Thus, a consumer is forced to "buy" their credit rating from subscribers and credit reporting agencies, including the defendants. It takes very little to mar a good credit rating and the credit and credit reporting industry uses that to their advantage. A good credit rating is invaluable and necessary in this day and age.

It appears that Plaintiff was very vigilant about disputing the inaccuracies and requesting corrections. Credit reporting does not occur by accident or happenstance. It is a calculated method of collection. Failure to cure errors and chosen reporting are not due to neglect but are willful, intentional acts and omissions.

The human factor side of false credit reporting in this case cannot be over-emphasized. In my experience of handling hundreds of cases involving consumers whose credit reports were illegally merged, mixed, mis-reported, including stolen identity cases, I found that the victims suffered legitimate and significant non-pecuniary damages. They suffered extraordinary aggravation and feelings of embarrassment and loss of control.

Credit reporting is a negative information based system. It is used to keep the consumer "in check" and negative information is emphasized and primarily used in scoring and factoring. Victims have no physical or financial control over the agencies and their subscribers. The agencies cater to the subscribers. Clearing reporting errors is very difficult and time consuming, under the very best circumstances in the current environment. The ability to report and control access to such credit information gives the agencies and subscribers power over the consumer.

Often missed payment histories, public records items, financial data, etc., are disclosed in a manner so as to undress and leave "naked" the subject consumer. This is particularly offensive when the disclosure is non-consensual and unwarranted. Plaintiff legitimately fears continued actions and harm. Plaintiff may feel somewhat like an assault victim who is repeatedly and systematically attacked over and over again at the whim of the aggressor, in this case the defendants.
Conclusion
I reserve the right to update, amend and/or supplement this report as new information is provided to me. I have outlined above and in the attachments my qualifications, the facts and documents upon which I have based my opinions and provided a detailed explanation for my opinions. Again, as some of the documents which I have received and reviewed in the past were subject to protective orders, I have not listed them by name nor have I revealed the contents of those documents, except to the extent some or all of my opinions are derived from my overall knowledge of the credit and credit reporting industries, including the defendants in this case, and its normal business practices and its actions and inactions in this case.
This the ______ day of ______________, 2001.

________________________________
David A. Szwak
29 Provident Oaks
Bossier City, Louisiana 71111

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