Misleading Information: Beaver v. TRW

Information that should and should not be reported where there is a bankruptcy.
David A. Szwak

Misleading Information: Beaver v. TRW

Postby David A. Szwak » Sat Dec 10, 2005 12:01 am

Beaver v. TRW Corp.
Not Reported in F.Supp., 1988 WL 123636
W.D.N.Y.,1988.

The plaintiff suggests that satisfied judgments are not appropriate information for consumer reports. In fact they are. Satisfied judgments reflect on a consumer's credit worthiness. The favorable track record they imply might be seen by potential creditors to decrease the risk of further credit extensions to the consumer. Information may still be reasonably accurate although some pertinent details are excluded, in which case the entry need not be deleted even when an affected individual asks for its removal. Watson v. Credit Bureau Inc. of Georgia, 660 F.Supp. 48, 49 (S.D.Miss.1986) (consumer reporting agency was not liable under the FCRA although it had reported a vehicle as repossessed when repossession had been voluntary and despite the fact that the repossessor had requested removal of the entry); Austin v. Bankamerica Service Corp., 419 F.Supp. 730, 733 (N.D.Ga.1974) (report noting that Austin had been named as a defendant in lawsuit was reasonably accurate despite the fact that he had been sued in his official capacity as a deputy sheriff rather than in his individual capacity).
In interpreting the FCRA some courts have viewed it as a sword for consumer justice, [FN2] while others have viewed it as a shield for consumer reporting agencies. [FN3] However, in addressing the instant plaintiff's motion to delete, this Court need not enter that fray. What is at issue here is whether the defendant is required to delete information that is admittedly accurate.

Although a wide range of information is initially appropriate for a consumer report, there are times when the use of that information calls for additional procedural burdens on the reporting agency. Where, for example, a report is being prepared for employment purposes Congress imposes on consumer reporting agencies the burden of reverification. "[J]udgments shall be considered up to date if the current public record status of the item at the time of the report is reported." 15 U.S.C. § 1681k(2). Nowhere, however, does this subsection call for deletion. Rather, if the individual's employment may reasonably be expected to yield $20,000 or more per year, the statute provides for the continued inclusion of information which would otherwise be statutorially obsolete. 15 U.S.C. § 1681c(b)(3). Where, as here, the report is being prepared for reasons other than employment--e.g., for a mortgage or insurance--the legislative history reflects a lower level of concern. Bryant v. TRW, Inc., 689 F.2d 72, 79 (6th Cir.1982) ("We are not nearly as much concerned over the possible mistaken turn-down of a consumer for a luxury item * * *.")

*2 The relevant subsection for purposes of barring the reporting of public record information involved in the instant action is 15 U.S.C. § 1681c which provides in part:
"(a) Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:
* * *
(2) Suits and judgments which, from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.
* * *
(6) Any other adverse item of information which antedates the report by more than seven years."
Whether the information contained in the plaintiff's consumer report is characterized as stale or incomplete, the authority to have said information deleted as "obsolete" earlier than seven years after its satisfaction is not to be found in this section. The judgment that is the subject of this motion is less than five years old. As was determined in Todd v. Associated Credit Bureau Services, Inc., 451 F.Supp. 447, 449 (E.D.Pa.1977):
"Plaintiffs also complain that [the consumer reporting agency] violated the Act by disclosing stale and obsolete information. The plaintiffs' position is unfounded, however, because the Act proscribes the disclosure of information such as that involved here only where the information antedates the report by more than seven years. * * *
" * * * Therefore, no deletions were necessary and no deletions were made."
The defendant therefore had no duty to delete verifiable, technically accurate public record information from the plaintiff's consumer report particularly where, as here, it has been rendered complete through updating. It is inconsistent with the balanced regulatory approach of the FCRA to deprive either the consumer reporting agency or the user of the consumer report of information. Furthermore, to require deletion of admittedly correct public record information would lay the groundwork for future inequities between report users who independently check the public record and those who rely solely on reports of consumer reporting agencies. On the present facts, section 1681c of the FCRA does not require deletion of the record of judgment.
Accordingly, it is hereby ORDERED that the plaintiff's motion for partial summary judgment is denied.

FN1. The plaintiff alleges that the report was requested in connection with his application for a line of credit at the Goldome Bank in the amount of $10,000. He further alleges that improper entries in that report resulted in denial of that credit line. Complaint, at Paragraphs SIXTH through THIRTEEN (sic).

FN2. E.g., Alexander v. Moore & Associates, Inc., 553 F.Supp. 948, 952 (D.Ha.1982) ("Clearly, the more misleading the information, and the more easily available the clarifying information, the greater the burden upon the consumer reporting agency to provide this clarification.").

FN3. E.g., McPhee v. Chilton Corp., 468 F.Supp. 494 (D.Conn.1978). The precise issue therein was whether the Act imposes a requirement of updating information that was accurate when received. It was held that an agency's report of a consumer's bankruptcy was accurate, within the meaning of the Act, despite the fact that the consumer had withdrawn his petition in bankruptcy and had fully repaid his debts. The Court's holding reflects a preference for administrative correction of incomplete reports.

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