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Failure of Credit Bureau to Accurately Identify Source of Information is an Injury-In-Fact

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Clark et al. V. TransUnion, LLC, EDVA-Richmond, December 9, 2016, 3:15-cv-391

The Fair Credit Reporting Act requires consumer reporting agencies to “clearly and accurately” disclose to consumers “the sources of information” in their credit files. 15 U.S.C. Section 1681g(a)(2). In this case, the defendant, TransUnion, provided a credit filed that listed two civil judgments. The credit report listed the sources of the judgments as “Henrico District Court” and “Virginia Federal Court.”

One of the judgments was entered against the Plaintiff in November of 2008, but was appealed and ultimately dismissed. TransUnion purportedly failed to conduct a “timely and reasonable re investigation” and continued to report the judgment as unpaid.

In addition, Clark contends that the source of the information, the judgments, was actually LexisNexis, a fact that was not disclosed on the credit report.
TransUnion filed a motion to dismiss for failure to state a claim and that the Plaintiff has not shown an “injury in fact” as required for Article III standing under the Supreme Court’s decision in Spokeo v. Robbins, 136 S. Ct. 1540 (2016).

In Spokeo, the Supreme Court reiterated that, in order to establish standing, a plaintiff must have: (1) suffered an injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant; and (3) that is likely to be redressed by a favorable judicial decision.

As to to the first, when considering a class action, the proper inquiry is whether “each individual suffers a particularized harm.”
In enacting the FCRA, Congress emphasized that the consumer has a right to correct any erroneous information in his credit file and sought to establish the right of a consumer to be informed of investigations into his [or her] personal life.

The FCRA’s disclosure requirements are generally designed to decrease the risk that a credit-reporting agency will disseminate false information, therefore, the inaccurate or incomplete disclosure to a consumer of the source of a consumer reporting agency’s reported information has been elevated by Congress to the status of a legally cognizable injury.

The Stokes court explained that without accurate source information, a consumer would be left confused as to where to go to correct erroneous data contained in a report and be unable to know whether any erroneous data would find its way into future consumer reports.

The Court ultimately concluded that the Plaintiff properly alleged an injury-in-fact by claiming that she was entitled to know the source of her consumer information, but that she received a response listing only court judgments and that TransUnion omitted the third-party vendor, LexisNexis from which it directly received the information.

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