Types, Names, Descriptions, Testimony
David A. Szwak


Postby David A. Szwak » Fri Nov 11, 2005 1:57 pm

Nielsen v. U.S. Bank
Not Reported in F.Supp.2d, 2005 WL 189709

The above-entitled matter came on for hearing before the undersigned United States District Judge on December 3, 2004, pursuant to Defendants U.S. Bank's ("U.S.Bank") Motion for Partial Summary Judgment and Experian Marketing Solutions, Inc.'s ("Experian") and Trans Union, LLC's ("Trans Union") Motions for Summary Judgment. Experian reached a settlement with Plaintiffs Kent and June Nielsen prior to the hearing. Further, Plaintiffs conceded that summary judgment was appropriate as to one of their claims brought pursuant to the Fair Credit Reporting Act ("FCRA"), §§ 1681-1681u, and as to their defamation claim brought against U.S. Bank. Accordingly, Experian's Motion for Summary Judgment is moot and the Court grants U.S. Bank's Motion for Partial Summary Judgment. For the reasons outlined below, the Court grants in part and denies in part Trans Union's Motion for Summary Judgment

Trans Union is a consumer reporting agency. As a consumer reporting agency, Trans Union collects credit information provided to it by other sources and generates consumer reports that are then given to consumers or others. Trans Union also maintains the credit files of millions of consumers.
When a consumer disputes the veracity of the information compiled by Trans Union, Trans Union investigates the dispute using one of two systems developed for the purpose of processing and tracking disputes: the Consumer Dispute Verification process ("CDV") and the Automated Consumer Dispute Verification process ("ACDV"). The CDV process involves Trans Union contacting the party that is providing the disputed information (the "Furnisher"). Trans Union asks the party to verify certain personal information regarding the consumer and to verify the accuracy of the financial information being reported to Trans Union.
If the Furnisher verifies the information, Trans Union maintains the information as it exists in Trans Union's database. If the Furnisher reports that the information is inaccurate, Trans Union either deletes the information from the consumer's credit file or modifies that information. Trans Union then notifies the consumer of the results of the investigation.
On February 26, 2002, Plaintiffs received notice that their application for a line of credit at Sam's Club had been denied because of bankruptcy proceedings that had been reported to Sam's Club by Experian, a consumer reporting agency. Thereafter, Plaintiffs contacted Experian and U.S. Bank, the provider of the loan that was purportedly dissolved in the bankruptcy proceeding, to have the information regarding the bankruptcy removed from Plaintiff's credit history. At one time, Plaintiffs had an auto loan with U.S. Bank, but Plaintiffs had never filed for bankruptcy or been late with any of their payments on the loan. In fact, Plaintiffs paid off the loan earlier than was expected under the terms of the loan agreement. Plaintiffs assert that U.S. Bank told them that it had notified all of the credit reporting agencies of the error.
*2 On April 16, 2002, June Nielsen requested a copy of her consumer report from Trans Union. Despite U.S. Bank's previous assurances, the report still contained the reference to the bankruptcy. On April 22, 2002, June Nielsen contacted Trans Union via telephone. During the telephone call, she disputed the veracity of the bankruptcy notation. Thus, Trans Union initiated an investigation of the accuracy of the information.
On April 23, 2002, Trans Union submitted a CDV to U.S. Bank. In the CDV, Trans Union advised U.S. Bank of the nature of June Nielsen's dispute. The CDV stated, in part, "Acct reaffirmed or not included in Bkrpcy. Update Consumer Info Indictr, Acct Status, Curr Bal and Pymt Hist Profile." (Affidavit of Eileen Little ("Little Aff."), ¶ 15, Ex. 1.)
U.S. Bank returned the CDV to Trans Union stating that Trans Union should "change data as shown" but without any direction as to how the U.S. Bank account's information should be changed. (Little Aff., ¶ 16, Ex. 1.) Because U.S. Bank did not provide specific information regarding the account, Trans Union deleted the entire U.S. Bank account from June Nielsen's consumer credit report. Trans Union mailed June Nielsen the results of its investigation on May 17, 2002.
Kent Nielsen claims that he contacted Trans Union in either March or April of 2002 regarding the erroneous information. Kent Nielsen asserts that Trans Union took no action with regard to his request for an investigation. Trans Union denies that this contact ever took place.
On July 3, 2002, Kent Nielsen contacted Trans Union to request a copy of his credit report after he was denied credit while attempting to obtain an automobile loan. He claims that the car dealership had run a credit report and that the report contained the erroneous bankruptcy notation. However, the credit report that Kent Nielsen received from Trans Union contained information regarding the U.S. Bank loan, but did not contain information regarding the purported bankruptcy.

David A. Szwak

Postby David A. Szwak » Wed Dec 21, 2005 11:11 am


3 DIANA A. POULSON, * Plaintiff, *
4 * vs. * CASE NO. 2:05CV75
10 * JURY DEMAND Defendants. * JUDGE DAVIS

7 Q Now, when your company receives a dispute
8 such as shown in Exhibit Number 1, what is your -- what
9 is your ordinary procedure at Trans Union for
10 processing that incoming dispute?
11 A Well, the process would be to review the
12 letter and classify it if it's simply a request for
13 disclosure of credit file to the consumer, is it a
14 dispute and so forth. And this case being a dispute,
15 then to understand the accounts that are being disputed
16 and, in accordance with the statutes, conduct a
17 reinvestigation into that disputed information.
18 Q Is it fair to say that Trans Union would then
19 communicate with the furnisher -- each respective
20 furnisher of information whose account or other
21 information was contested for the purpose of trying to
22 find out what the furnisher has to say about the
23 consumer's dispute?
24 A I'm not quite clear on your question.
25 Q Sure. What does Trans Union do once it

1 receives a dispute letter and identifies the particular
2 furnisher whose information is being contested?
3 A Well, our statutory obligations are to
4 investigate that information, which may mean going back
5 to the furnisher of the data and confirming whether
6 what we have is accurate or not. And then, in the
7 event the information is not accurate, change it or
8 delete it.
9 Q Okay. When you looked at Exhibit Number 1,
10 did the plaintiff in this case adequately identify
11 herself to Trans Union?
12 A Yes.
13 Q And did she adequately convey to Trans Union
14 what the basis of her disputes were?
15 A For which account?
16 Q For each of the accounts. If you look at the
17 letter as a whole, Exhibit Number 1 with the
18 attachments, do you believe the plaintiff provided you
19 adequate information to identify what her disputes
20 were?
21 A Some of the accounts did not include complete
22 account numbers. And to the extent that there might
23 have been subsequent information on the credit reports
24 that had the same account numbers, the dispute could
25 have been more thorough with complete account numbers.

1 Q Do you know whether the credit report from
2 which she derived those truncated account numbers in
3 fact showed the account numbers as truncated or do you
4 know?
5 A I don't know what report she derived those
6 account numbers from.
7 Q If you look at Trans Union Bates Label 64,
8 65, 66, et cetera, can you identify that particular
9 credit report copy?
10 A Yes.
11 Q It's called a TrueCredit. It's a tri-merge
12 credit report.
13 A Is that a question?
14 Q Yes. I was going to ask you, who sells
15 TrueCredit credit reports?
16 A TrueCredit.
17 Q Okay. And they're a reseller of credit
18 information; correct?
19 A Yes.
20 Q And in this -- in this particular TrueCredit
21 report can you identify the truncated account numbers
22 reflected in plaintiff's dispute letter?
23 A Yes.
24 Q Okay. So it appears that the place where the
25 plaintiff derived these account numbers was a

1 TrueCredit report with truncated account numbers listed
2 in it; right?
3 A Yes.
4 Q Okay. Now, based upon the receipt of Exhibit
5 Number 1, the entire exhibit, did Trans Union
6 communicate with the furnishers Citibank, Discover and
7 USAA based upon the disputes that are lodged on Trans
8 Union Bates Label 62?
9 A You said Discover, Citibank and USAA?
10 Q Yes, sir.
11 A Yes.
12 Q Now, what is the -- what is the normal mode
13 of communication between Trans Union and furnishers
14 such as Discover, USAA and Citibank when Trans Union
15 receives a dispute letter such as Exhibit Number 1?
16 A The normal means of communication is via an
17 industry-accepted platform for exchanging verification.
18 I believe the -- that's facilitated through the
19 Consumer Data Industry Association, so we use that --
20 that exchange capability.
21 Q What I'd like to do is maybe break that down
22 a little bit for the jury's benefit.
23 Is it true that Trans Union, upon
24 receipt of a dispute, would send a CDV or ACDV to each
25 of the furnishers whose information is contested?

1 A Yes.
2 Q And a CDV is defined as a consumer dispute
3 verification document, which would be a paper version;
4 correct?
5 A Yes.
6 Q And an ACDV would be an automated CDV, which
7 would be more of an e-mail type of communication to the
8 furnisher; correct?
9 A Yes.
10 Q Now, whether it's a CDV, the paper copy, or
11 an ACDV, the e-mail version, the content that's
12 contained in that communication from Trans Union to the
13 furnisher is designed to put the furnisher on notice
14 that a particular account that they're reporting about
15 a particular consumer is being contested. Is that
16 true?
17 A Yes.
18 Q And it also provides the furnisher
19 information about how they are currently reporting the
20 contested account. Is that true?
21 A Yes.
22 Q And it also provides the furnisher an
23 opportunity to respond and tell Trans Union what it
24 believes the account should be reported as. Is that
25 true?

1 A Yes.
2 Q It also provides the furnisher the ability to
3 respond and ask that the account be deleted from Trans
4 Union's records; correct?
5 A Yes.
6 Q And, in fact, there's a number of different
7 methods in which a furnisher can respond to a CDV or an
8 ACDV; correct?
9 A What do you mean by methods?
10 Q Well, there's a number of different ways in
11 which they might respond. They can verify it, they can
12 ask to delete it or they can ask to modify the
13 reporting in a number of different ways.
14 A Yes. The responses could vary.
15 Q Okay. Let's look for a moment at Exhibit
16 Number 3, please.
17 A Okay.
18 Q Based upon the receipt of Exhibit Number 1,
19 did Trans Union send Exhibit Number 3, an ACDV
20 communication, to Discover Financial Services, the
21 defendant in the case?
22 A Yes.
23 Q And does that ACDV relate to a particular
24 account number that is reflected in Exhibit Number 1,
25 Page 2?

1 A Yes.
2 Q And Trans Union directed this communication
3 to Discover Financial Services to convey what type of
4 dispute? I mean, what is it that the plaintiff was
5 complaining about the account?
6 A She stated that Discover had been contacted
7 and asked to close the account, and, further, that the
8 account should be an individual account solely in the
9 name of her ex-husband. And, as a result, she believes
10 the information should not reflect on her Trans Union
11 credit report.
12 Q Okay. And is that the same dispute that you
13 transmitted on to Discover Financial Services?
14 A Yes.
15 Q And can you tell me, did you transmit that
16 dispute within five days of your receipt of
17 Ms. Poulson's letter in Exhibit Number 1?
18 A Five calendar days or five business days?
19 Q Well, in accordance with the Fair Credit
20 Reporting Act mandates for transmittal of disputes.
21 A That would be five business days?
22 Q That's my understanding.
23 A Okay. It appears so. I mean, absent looking
24 at a calendar, I can't figure that out in my head.
25 Q Okay. Fair enough. Let me ask you, based

1 upon your transmittal of the ACDV to Discover Financial
2 Services, as shown in Exhibit Number 3, did Discover
3 respond to your ACDV?
4 A Yes.
5 Q And can you tell me, does Exhibit Number 3
6 reflect the manner in which they responded?
7 A When you -- when you say manner, do you mean
8 the way that they gave us the response or the content
9 of the response?
10 Q Well, let me break that question down.
11 Isn't it true that Discover Financial
12 Services responded to your ACDV by way of an electronic
13 transmission back to you after they had reviewed your
14 ACDV?
15 A Yes.
16 Q And isn't it true that Discover did not ask
17 Trans Union to remove the account from the plaintiff's
18 credit report?
19 A Yes.
20 Q And Discover Financial Services asked Trans
21 Union to modify the account information. Is that true?
22 A Yes.
23 Q And in what manner did they ask you to modify
24 the account information?
25 A To update the verification date.

1 Q Did they ask for any other changes to be made
2 to the manner in which they reported the account?
3 A Not that I can identify.
4 Q Okay. Now, as of the verification, isn't it
5 true that Discover Financial Services asked Trans Union
6 to report the account as having been opened in May of
7 1986?
8 A Yes.
9 Q And it has a balance of $11,150?
10 A Yes.
11 Q With a past due amount of $552?
12 A Yes.
13 Q And they also ask you to report a derogatory
14 rating in association with the account. Is that true?
15 A Yes.
16 Q And that would be a status rating of a three.
17 Is that true?
18 A Yes.
19 Q And that means that the account -- the actual
20 status of this account as of the time of the response
21 to the ACDV would mean that the account was 60-plus
22 days delinquent. Is that true?
23 A Yes.
24 Q Okay. And it's your testimony that Discover
25 Financial Services did ask Trans Union to retain this

1 information in the plaintiff's credit file. Is that
2 true?
3 A I don't know what you mean by "asked."
4 Q Well, when a furnisher such as Discover
5 Financial Services does not direct Trans Union to
6 remove or delete the information, does Trans Union
7 leave the information in the consumer's credit file?
8 A Yes.
9 Q And isn't that an industry standard insofar
10 as responses to reinvestigation requests?
11 A Yes.
12 MR. Szwak: Okay. Let's go ahead and
13 attach Trans Union Exhibit Number 3 -- we'll offer to
14 introduce Exhibit Number 1 and Exhibit Number 3 at this
15 point in time.
16 Q Now, Exhibit Number 3 is a Trans Union
17 business record that you retain. Is that true?
18 A Yes.
19 Q Something generated and archived in the
20 ordinary course of business?
21 A Yes.
22 Q And Exhibit Number 3 in fact came from Trans
23 Union's records; is that true?
24 A Yes.
25 Q What is the date that Trans Union -- what is

1 the date that Trans Union received a response from
2 Discover Financial Services in Exhibit 3?
3 A July 16th, 2004.
4 Q Okay. And based upon that response, Trans
5 Union in fact did leave the Discover Financial Services
6 account in plaintiff's credit file; correct?
7 A Yes.
8 Q And when account information is retained in
9 the credit file and is not suppressed or somehow
10 deleted so as to mask it from being reported or
11 published to third persons, then that information will
12 be viewed as part of that credit file when that credit
13 file is part of a credit report. Is that true?
14 A Yes.

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