1681i[a][5]:Boris v. ChoicePoint; Must Read

David A. Szwak

1681i[a][5]:Boris v. ChoicePoint; Must Read

Postby David A. Szwak » Sun Nov 13, 2005 7:09 pm

Boris v. Choicepoint Services, Inc.,
249 F.Supp.2d 851, W.D.Ky., Mar 14, 2003

Consumer brought state court action against credit reporting agency, alleging that agency reported incorrect information concerning her history of insurance claims, in violation of the Fair Credit Reporting Act (FCRA). Action was removed to federal court. Following jury's verdict in favor of consumer, credit reporting agency moved for judgment notwithstanding the verdict, new trial, or remittitur. The District Court, Heyburn, Chief Judge, held that: (1) evidence was sufficient to prove agency's negligent noncompliance with accurate reporting requirements under the Fair Credit Reporting Act (FCRA); (2) evidence was sufficient to support finding that consumer suffered damages based on humiliation, mental distress, and embarrassment, and that damages were caused by the credit reporting agency's circulation of incorrect claims report; (3) award of $197,000 in actual damages was excessive, and was required to be reduced to $100,000; and (4) award of $250,000 in punitive damages was not excessive.
Motions granted in part and denied in part.

Among the relevant factors used to determine whether a CRA acted reasonably under this standard are "whether the consumer has alerted the reporting agency to the possibility that the source may be unreliable or the reporting agency itself knows or should know that the source is unreliable" and "the cost of verifying the accuracy of the source versus the possible harm inaccurately reported information may cause the consumer." Henson v. CSC Credit Services, 29 F.3d 280, 287 (7th Cir.1994). Absent a reasonable argument to the contrary, a credit reporting agency that receives notice of a dispute may be required to verify the information's accuracy with the initial source of information. Id.; see also Cahlin, 936 F.2d at 1160 ("A [§ 1681i(a) ] claim is properly raised when a particular credit report contains a factual *858 deficiency or error that could have been remedied by uncovering additional facts that provide a more accurate representation about a particular entry"). Choicepoint argues that Plaintiff did not comply with their procedures because she complained to the Choicepoint representative handling property reports as opposed to the representative dealing with consumer disputes. Additionally, Choicepoint again claims that the false information came from CNA and, further, denies that it ever placed the misinformation back on her report. Based on these facts, Choicepoint claims there was insufficient evidence for the jury to find that it violated the § 1681i(a) requirements.
Once again the Court returns to trial where the evidence was anything but clear. What is clear, however, is that in on June 28, 2000, Plaintiff learned her claims report included four "fire" claims and one "extended loss" claim. At most, she testified, there should have been four water claims. All parties agree Plaintiff never made a fire claim. The Court is still unsure of what an "extended loss" claim is. Plaintiff testified that she then called Choicepoint four separate times to get the problem corrected and was given the run around until she was finally told to submit something in writing. At that time, she said she submitted a written complaint to the Kentucky Department of Insurance. Choicepoint was then notified by the Insurance Department of the false information and was told by CNA to change the cause of loss codes for the four "fire" claims to "water." On August 8, 2000, Plaintiff received her claims report which reflected the change.
For some reason, however, by February 28, 2001--a full six months after Choicepoint was on notice that there was a problem with her report--Plaintiff obtained a copy of her report which now showed nine claims, including four additional claims for fire. The inaccurate claims may have been reinserted soon after the claim record was first corrected in August, 2000. She testified that on March 15, 2001, GEICO informed her they could not insure her do to the inordinate number of losses appearing on her claims report compiled by Choicepoint. She sued Choicepoint on May 23, 2001. Furthermore, Plaintiff's evidence showed that on December 20, 2001, Allstate Insurance Company requested her report, which still showed the nine claims. Plaintiff testified that as recently as April of 2002, Allstate informed her she was uninsurable, based on her Choicepoint report.
The Court finds this is sufficient evidence, coupled with the aforementioned lack of credibility born out by Choicepoint's witnesses and the Plaintiff's own persuasive testimony, from which a reasonable jury could conclude Choicepoint did any of the following in violation of § 1681i(a): (1) "reinserted" previously deleted information without checking its accuracy, (2) failed to notify Plaintiff of that reinsertion within five days of doing so, and (3) failed to maintain reasonable procedures designed to prevent the reinsertion of that false information. At trial, rather than putting on evidence of how it attempted to check the veracity of CNA's data, Choicepoint simply sat back and sought to blame its reinsertions on CNA. In so doing, however, Choicepoint never called a witness from CNA. Nor did it clearly explain how, six months after complaints were made, the number of claims on Plaintiff's claims report had inexplicably doubled. In light of this strategy, there was certainly conflicting evidence from which a reasonable jury could find in Plaintiff's favor with regard to § 1681i(a). See Bryant, 689 F.2d at 79 (finding that where a credit agency knew of a dispute between the consumer and creditors and *859 where the consumer had complained about his consumer report, merely making two telephone calls to the creditors was insufficient to re-verify the information contained in the report).

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