December 5, 2007 - For eight years, Angela P. Williams of Jacksonville, FL tried to straighten out her credit. Her credit reports routinely included information from another person with a similar name. And for eight years, Ms. Williams got the run around from each of the big three credit reporting agencies. By 2004, she had had enough and she sued. Two of the defendants settled their cases with her out of court, but Equifax continued to fight. On Friday an Orlando jury gave her a multimillion dollar award against the company.

Mixing up one person's credit information with someone else's is fairly common. It is one of the primary reasons that 79% of credit reports contain errors. Unfortunately, clearing up such mistakes can be very difficult. In some cases, credit reporting agencies (CRAs) have been known to correct bad data only to include it again at a later date. In others, they simply refuse to remove the erroneous data. In all cases, it is the consumer's responsibility to try and get their credit report fixed; a time consuming and frustrating process at best.

Although the Fair Credit Reporting Act specifically states that the CRAs must investigate reporting mistakes and remove them from credit reports if they can't clearly show that a particular debt actually belongs to a specific consumer, the actual process is stacked against consumers.  When consumers send the CRAs documentation to prove that a debt has been paid, or that a debt doesn't belong to them, the lender will never see it. Instead, CRA investigations are conducted electronically. Typically, the CRA will send a letter to a lender saying that the consumer is contesting an item on their credit report. The lender will then send a letter back to the CRA stating that the information reported is accurate. End of investigation.

Ms. Williams interaction with the CRAs was typical. She would contest information on her credit report but the CRAs did little or nothing to correct their errors. As a result, her credit report was wrecked and she had trouble getting access to credit of any kind. Her bad credit also prevented her from applying for a mortgage.

The two other defendants in the case, Experian and American Recovery Systems settled with Williams out of court. But Equifax fought on. On Friday, a jury awarded Williams with $219,000 in actual damages and $2.7 million in punitive damages; the larges punitive damage aware ever against the company.

With the jury award, Williams' journey through the court system is still not over. Experian is expected to appeal the case. The courts have a history of reducing punitive damages claims from the CRAs so there is no telling what will happen with Williams' case over the long term.

Even so, the outcome of the case is good news for consumers. Most cases against the CRAs are settled out of court. Such settlements contain nondisclosure agreements and prevent the cases from becoming actual case law. That is not the case here. Since her case made it all the way to a jury verdict, it can now be cited by attorneys in other cases.

by Jim Malmberg

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