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Court Approves Record Settlement of Fair Credit Reporting Act Class Action
September 10, 2011
U.S. District Court Judge David O. Carter today approved a $45 million settlement on behalf of 750,000 claimants against the nation's three largest repositories of consumer credit information, Experian Information Solutions, Inc., Trans Union, LLC, and Equifax Information Services, LLC.
Plaintiffs filed the class action suit in 2005 alleging defendants had recklessly and/or negligently violated - and were continuing to violate - the Fair Credit Reporting Act ("FCRA"). Specifically, Plaintiffs accused Defendants of failing to maintain reasonable procedures to ensure the accurate reporting of debts discharged in bankruptcy and of refusing to adequately investigate consumer disputes regarding the status of discharged accounts.
The $45 million settlement constitutes the second-largest settlement ever in a lawsuit alleging violations of the FCRA.
In the order granting final approval of the class action settlement, Judge Carter commented:
Plaintiffs' claims largely presented questions of first impression ... Prior to the injunctive relief order entered in the instant case, however, no verdict or reported decision had ever required Defendants to implement procedures to cross-check data between their furnishers and their public record providers.
"Prior to the litigation, consumers across America were denied mortgages, home refinancing and car loans, or paid higher interest rates due to debt and negative credit reports that should been removed from their credit files," stated Lieff Cabraser's Michael W. Sobol, who served as Plaintiffs' Co-Lead Counsel. "Credit reporting agencies must now reconcile creditors' information against available public bankruptcy records to assure maximum possible accuracy."