Experian’s Failure To Disclose Immediate Provider Of Information Violates FCRA

Dreher v. Experian Info. Solutions, Inc., 2014 U.S. Dist. LEXIS 167534 (E.D. Va. Dec. 3, 2014).

Facts: In November 2010, Michael T. Dreher ("Plaintiff") discovered Experian Information Solutions, Inc. ("Experian") was reporting a delinquent credit card account identified as an Advanta Credit Card ("Advanta Account"). Plaintiff disputed the Advanta Account with Experian. At that time, Advanta Bank Corp. ("Advanta") had already been shut down by the Utah Department of Financial Institutions and the Federal Deposit Insurance Corporation ("FDIC") had stepped in to oversee the bank as a receiver. In July 2010, the FDIC had appointed CardWorks, Inc. and CardWorks Servicing, LLC ("CardWorks") to service all Advanta accounts, including acting as a customer-service intermediary for Advanta and handling all communications with customers regarding their Advanta accounts.

As a result of these changes implemented by the FDIC, CardWorks was also the immediate provider of information to Experian with respect to the Advanta Account. Even though it was providing the information to Experian, CardWorks specifically requested that Experian not list it as the source of information, but rather to continue listing Advanta as the source with respect to Plaintiff's Advanta Account and other similarly situated accounts. Experian honored CardWorks' request and included the Advanta Account on Plaintiff's credit file listing Advanta as the only source of information.

Plaintiff brings only one class claim in which he alleges that Experian willfully violated 15 U.S.C. 1681g(a)(2) of the Fair Credit Reporting Act ("FCRA") as to him and the other class members by failing to clearly and accurately disclose the source of the Advanta trade lines in their respective credit reports. Experian previously, and unsuccessfully, sought summary judgment and defended its actions as objectively reasonable. Both Plaintiff and Experian later asked the Court to grant summary judgment on the issue of Experian's liability for willfully violating the FCRA. The Court found that Experian's interpretation of "sources of information" to include any variety of entities other than the one that actually provided the information as objectively unreasonable and granted Plaintiff's motion for summary judgment as it related to willfulness liability.

Willfulness Under the FCRA. Under § 1681n and 1681o, the FCRA provides a cause of action to consumers for either a negligent or willful violation(s) of the...