Experian's Arguments re Reas Procs:Toler v. PHH,etal, WD Ark

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Experian's Arguments re Reas Procs:Toler v. PHH,etal, WD Ark

Postby Administrator » Fri Nov 21, 2014 3:17 am

Experian's Arguments re Reas Procs:Toler v. PHH,etal, WD Ark

F. Plaintiffs Failed to Show That Experian Maintained Unreasonable Procedures Prior to Plaintiffs' Dispute
Under § 1681 e(b), when the alleged inaccuracy is received directly from the creditor,
"independent verification of infonnation provided by creditors is not needed absent knowledge
that the infonnation may be inaccurate." Zahran v. Transunion Corp., No. 01-C-1700, 2003 U.S.
Dist. LEXIS 5089, at *14-15 (N.D. IlL March 28, 2003) (citations omitted). The risk that some
inaccuracies may result from Experian's procedures does not render those procedures
unreasonable. See Jianqing Wu, 2006 U.S. Dist. LEXIS 96712 at *21. Additionally, "[i]t would
be unreasonable to require a consumer reporting agency to develop systems that would catch
infrequent and irregular mistakes that furnishers might make. The Act does not impose such
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requirements." Schmitt v. Chase Manhattan Bank, NA., No. 03-3295, 2005 U.S. Dist. LEXIS
18029, at *12-13 (D. Minn. Aug. 23,2005) (citation omitted).
On this element, Plaintiffs admit that the alleged inaccuracy came from PHH directly, but
offered two bases for why Experian's procedures are allegedly unreasonable: (1) Experian's
procedures led to an alleged inaccuracy; and (2) Experian's procedures should have caught
PHH's irregular reporting. Both of these bases, taken together and viewed in light most
favorable to Plaintiffs, do not meet their burden on this element. See Schmitt, 2005 U.S. Dist.
LEXIS 18029, at *12-13. Instead, Plaintiffs were required-and failed-to show that, outside of
the § 1681i reinvestigation context, either: (a) Experian had specific knowledge that the
information PHH was reporting may be inaccurate; or (b) that any inaccuracy provided by PHH
occurred with such a regularity or frequency that Experian's procedures should be designed to
catch such inaccuracy. See Jianqing Wu, 2006 U.S. Dist. LEXIS 96712 at *21; Schmitt, 2005
U.S. Dist. LEXIS 18029, at * 12-13. Plaintiffs simply offered no evidence suggesting either of
the above or otherwise showing how a "reasonable" procedure would have uncovered the alleged
"inaccuracy"-namely the unique details of a purportedly modified loan between Plaintiffs and
PHH-in this case. In essence, Plaintiffs appear to make the same argument rejected against
Equifax as a matter oflaw in Jianqing Wu:
Seemingly, Plaintiff holds the opinion that nothing short of an in-person review of each derogatory item reported would satisfy the requirements of § 1681 e(b) of the FCRA. Not surprisingly, Plaintiff has not provided any caselaw to support this proposition. To make Equifax liable under the FCRA for relying on the records of businesses, which Equifax has identified as trustworthy, would vitiate one of the purposes of the FCRA, to facilitate commerce. Under the system Plaintiff proposes, the economic costs of investigation would render it economically infeasible for CRAs to function. Nothing in the FCRA or its implementing regulations evinces the intent to place such heavy burdens on CRAs.
Jianqing Wu, 2006 U.S. Dist. LEXIS 96712 at *22. Because Plaintiffs failed to show that
Experian knew the delinquency may be inaccurate in the e(b) context or otherwise show how a
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different procedure would have removed the delinquency, Experian is entitled to judgment as a
matter of law on Plaintiffs' § 1681 e(b) claims for this independent reason.
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association

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Re: Experian's Arguments re Reas Procs:Toler v. PHH,etal, WD

Postby Administrator » Fri Nov 21, 2014 3:18 am

Experian's Arguments re Cons Rpts:Toler v. PHH,etal, WD Ark


G. Plaintiffs Failed to Show the Contents of any Consumer Report Published by Experian
To establish a violation of § 1681 e(b) or § 168li, Plaintiffs must present evidence that an
Experian "consumer report" was published with inaccurate information. See Jackson v. Equifax
Information Services, LLC., 167 Fed. Appx. 144, 146 (11th Cir. 2006). The FCRA defines a
"consumer report" as a report sent to potential creditors for personal, family, or household
purposes. See § 1681a(d). Reports sent directly from Experian to Plaintiffs-known as
"consumer disclosures"-are not "consumer reports" and cannot be the basis for liability under
the FCRA. As the Southern District of Alabama explained:
[A] "consumer report" or "consumer credit report" is different from a credit file, credit report, or credit disclosure. A "consumer report" is a report generated by a credit reporting agency and delivered to a third party such as an employer, insurer, or lender, for use in deciding whether the consumer is eligible for credit or other purposes. 15 U.S.c. § 1681a(d). A credit report, file or disclosure is the credit reporting agency's file which it provides to the consumer, not third parties, and contains "information solely as to transactions or experiences between the consumer and the person making the report ..." 15 U.S.c. § 1681a(d); § 1681g; see also 15 U.S.C. § 1681 a(d)(2)(A)(i) ("report containing information solely as to transactions or experiences between the consumer and the person making the report").
Pettway v. Equifax Info. Servs., LLC, No. 08-0618-KD-M, 2010 U.S. Dist. LEXIS 13800, at *21­
22 (S.D. Ala. Feb. 12, 2010). At trial, Plaintiffs' failed to show evidence regarding the specific
content of any consumer report published by Experian, instead attempting to rely on Experian's
consumer disclosures sent to the Tolers directly. Like the court explained in Pettway, this
showing does not meet Plaintiffs' burden under the FCRA as a matter of law:
As explained, reports prepared only for Pettway, such as those prepared by Experian or Equifax in response to her credit disputes, are not "consumer reports" under the FCRA. Pettway did not provide the Court with a copy of a consumer report provided by Experian or Equifax from which the trier of fact could find or infer that inaccurate information was published therein or that the consumer report was a causal factor in
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the denial of credit in September 2008.... Therefore, the Court is without any evidence that a consumer report prepared by Experian or Equifax was a causal factor in the denial of credit in September 2008 as plead in the amended complaint.
Id. at 23-24. Moreover, Plaintiffs' evidence and testimony regarding "denial letters" from
alleged potential creditors does not satisfY their required showing regarding the specific contents
of the underlying consumer report necessary to satisfY the elements of inaccuracy and causation.
The Eleventh Circuit, in Ray v. Equifax Info. Servs., LLC, explained:
Ray produced a letter from Citibank as evidence that an inaccurate credit report caused him injury, but the Citibank letter itself stated that Ray had been denied an account because a "credit obligation related to a bankruptcy ... was recorded on [his] credit bureau report." Ray argues that the letter from Citibank was referring to the missing positive entries and MBNA's failure to report his accounts as "discharged in bankruptcy." However, because Ray failed to produce the credit report from 2004 which Citibank would have relied on, he cannot show that it was inaccurate, or even that the issues he complained of were not rectified.
Ray never produced any other evidence suggesting that Citibank or any other creditor denied him credit because of inaccuracies in the credit report produced by Equifax. Because Ray failed to produce the 2004 credit report, he did not create a genuine issue of material fact that inaccurate information was reported by Equifax or that it caused him harm, and he therefore failed to establish a prima facie case of a violation of § 1681e(b).
327 Fed. Appx. 819, 827 (11th Cir. 2009) (emphasis added). Because Plaintiffs failed to show
the contents of any Experian "consumer report" within the meaning of the FCRA, Experian is
entitled to judgment as a matter of law on Plaintiffs' claims for this independent reason.
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
416 Travis Street, Suite 1404, Mid South Tower
Shreveport, Louisiana 71101
318-424-1400 / Fax 221-6555
President, Bossier Little League
Chairman, Consumer Protection Section, Louisiana State Bar Association


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