Singletery v. Equifax Information Services, LLC

Filing 156

MEMORANDUM OPINION. Signed by Chief Judge Sharon Lovelace Blackburn on 9/18/2012. (KAM, )

FILED
2012 Sep-18 AM 10:29
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
COREY SINGLETERY, individually
and on behalf of a class of similarly
situated persons,
Plaintiff,
vs.
EQUIFAX INFORMATION
SERVICES, L.L.C.,
Defendant.

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CASE NO. 2:09-CV-0489-SLB

MEMORANDUM OPINION
On September 22, 2012, the Magistrate Judge filed his Report and Recommendation,
(doc. 149),1 recommending plaintiff’s Motion for Class Certification, (doc. 94), be denied,
and defendant’s Motion for Summary Judgment, (doc. 119), be granted. Plaintiff filed an
Objection to the Magistrate Judge’s Report and Recommendation, (doc. 150), to which
defendant responded, (doc. 152). Based upon the court’s consideration of all the materials
in its file, including the Report and Recommendation, the court is of the opinion that
plaintiff’s Objection is due to be overruled and the Magistrate Judge’s Recommendation is
due to be accepted. Plaintiff’s Motion for Class Certification, (doc. 94), will be denied and
defendant’s Motion for Summary Judgment, (doc. 119), will be granted.

1

Reference to a document number, [“Doc. ___”], refers to the number assigned to each
document as it is filed in the court’s record.

I. STANDARD OF REVIEW OF THE REPORT AND RECOMMENDATION
The district court reviews de novo those parts of the Report and Recommendation to
which a party objects. See 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b)(3)(“The district
judge must determine de novo any part of the magistrate judge’s disposition that has been
properly objected to.”).

The court may review the other parts of the Report and

Recommendation for plain error or manifest injustice. United States v. Slay, 714 F.2d 1093,
1095 (11th Cir. 1983)(citing Nettles v. Wainwright, 677 F.2d 404, 410 (11th Cir. 1982)).
“The district judge may accept, reject, or modify the recommended disposition; receive
further evidence; or return the matter to the magistrate judge with instructions.” Fed. R. Civ.
P. 72(b)(3).
II. STATEMENT OF FACTS
The Magistrate Judge made the following findings of fact, which the court ADOPTS:
Equifax is a consumer reporting agency, which gathers information
about consumers from various sources and uses it to create credit files on more
than 200 million consumers in the United States. Equifax assembles that
information into consumer reports and sells those reports to subscribers who
have a permissible purpose under the FCRA for obtaining consumer credit
information. Under certain circumstances, Equifax also provides consumers
with free credit-file disclosures, which are commonly referred to as “credit
reports.” Plaintiff is a 25 year-old high school graduate who has lived with his
parents for most of his life. Plaintiff suffers from attention deficit
hyperactivity disorder (“ADHD”) and has difficulty comprehending sentences
and conversations, reading, and writing.
Beginning in 2004, as mandated by the FACT Act, Equifax joined with
the other two national credit-reporting agencies, Experian and Trans Union, to
set up a central contact point through which consumers may request a free
annual credit disclosure from each or all of the credit-reporting agencies. A
2

corporation known as Central Source LLC was created jointly (and is jointly
owned) by the three national credit-reporting agencies to receive consumer
requests for free annual disclosures, and these requests are received via a
website, a telephonic Voice Response Unit (VRU), and through the mail.
When Central Source receives a consumer request, it forwards the request to
the appropriate credit-reporting agency. To fill these requests, Equifax has
outsourced the work to two entities, Direct Data Capture (“DDC”) and
Intellinet. DDC is located in Atlanta, with an affiliate in the Philippines.
Pursuant to an outsourcing agreement, all web-based, telephonic, and written
requests for a free annual disclosure from Equifax were processed by
DDC-Philippines employees. The contract between Equifax and DDCPhilippines set certain performance standards generally requiring DDCPhilippines to process requests for free annual disclosures within 24 to 48
hours with a 90% accuracy rate. All employees of DDC-Philippines were
trained in Equifax policies relating to filling requests for free annual
disclosures, and each employee was rated or graded on his or her performance
under those standards. The work of DDC-Philippines employees also was
audited by a quality assurance auditor required to examine at least 1% of the
transactions processed by each employee every two weeks. A failure by DDCPhilippines to achieve the 90% accuracy rate, or otherwise comply with
Equifax requirements, could result in Equifax reducing the contract fees it
owed to DDC-Philippines for its services, or even cancellation of the contract
with DDC-Philippines. In months when accuracy rates reach 100%, DDC was
entitled to a bonus from Equifax.
Although Central Source was established to receive consumer requests
for free annual disclosures, any requests following an “adverse action” were
also forwarded to the respective credit-reporting agencies. Central Source also
forwarded to the appropriate credit-reporting agency any consumer
“complaints” received, which could include complaints by consumers who had
not received disclosures requested by them.
Equifax had no information regarding plaintiff in its consumer database
prior to April 2005. Plaintiff’s Equifax credit file was created on or about
April 7, 2005, to store an inquiry made by Wachovia Bank. Wachovia
identified the consumer as Corey Singletery and provided an address of “116
English KN, Birmingham, Alabama 35235.” The initial information in the
file, including the name and address, came entirely from Wachovia Bank, but
additional information was added at various times later. In 2007 and 2008, five
inquiries from creditors (requests for credit reports) were made on plaintiff’s
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credit file. To make an inquiry regarding a consumer, the creditor must enter
identifying information into Equifax’s system, such as the consumer’s name,
address, and/or Social Security number. Two creditors who made inquiries in
June 2007 listed plaintiff’s address as “1167 English Kn,” Birmingham,
Alabama, and the remaining 2007 and 2008 inquiries listed plaintiff’s address
as “1667 English KN,” Birmingham, Alabama. Equifax generally obtains
consumer addresses from furnishers of information, which report credit
information about consumers to Equifax. A furnisher of information may be
a bank, credit card company, loan company, debt collector, or other types of
creditors/lenders that extend credit to consumers. After the creation of
plaintiff’s credit file in April 2005, furnishers and other creditors that made
inquiries about plaintiff’s credit file reported the address information each
creditor had on file regarding plaintiff to Equifax. A consumer’s credit file is
not updated based on information contained in an inquiry by a creditor. Thus,
if an address given for a consumer in a creditor inquiry is different from that
in the consumer’s credit file, the file will not be updated with the address listed
in the consumer’s inquiry. In this case, the address of “116 English KN” for
plaintiff was not updated or changed between the time of his file’s creation in
2005 and early 2009.
In May 2008, plaintiff applied for credit at a retail electronics store, HH
Gregg. The store’s credit accounts were serviced by GE Money Bank (also
referred to as GE Consumer Finance), which made an inquiry about the
plaintiff’s consumer credit file on May 9, 2008. That same day, May 9, 2008,
the creditor informed plaintiff that credit would be denied. The creditor later
notified plaintiff in writing that the credit denial was based in part on
information supplied by Equifax, and it further advised him how he could
obtain a copy of his credit file from Equifax, giving plaintiff a 1-800 number
to contact Equifax. The 1-800 number was a dedicated line for receiving
requests for disclosures following “adverse actions,” and that number was
supplied to creditors for use when the creditor denied credit or otherwise took
“adverse action” with regard to a consumer’s credit. The “adverse action”
toll-free number is different from the Central Source number because Central
Source was set up under the FACT Act to comply with the congressional
mandate that the credit-reporting agencies provide a central contact point for
consumers seeking a free annual disclosure. Central Source was not set up to
take and process “adverse action” requests for disclosure, and there is a
separate toll-free number given to consumers in “adverse action” letters for
making those requests.

4

GE Money Bank gave plaintiff notice of the denial of credit and his
right to seek a copy of his credit file from Equifax in a letter dated May 9,
2008. Although plaintiff does not personally remember the letter, he believes
his father received it, opened it, and later explained it to him. (Depo of Corey
Singletery, Doc. 98-15, pp. 39-41). Because plaintiff’s Attention Deficit
Hyperactivity Disorder (“ADHD”) makes it difficult for him to process
information quickly, he authorized his father to conduct certain business for
him, including contacting Equifax and other credit reporting agencies after
receiving the letter from GE Money Bank. (Id. at pp. 38-42). Plaintiff
authorized his father to make inquiries for him concerning a free annual credit
disclosure from Equifax. (Id. at pp. 49-51). Plaintiff himself never personally
contacted Equifax, and he has no knowledge of how, when, or by what means
his father may have requested a free annual credit disclosure on his behalf.
(Id. at pp. 53-54). After discussing it with his father, it was plaintiff’s father
who made the actual decision to request the free annual disclosure. (Id.).
There is testimony in the record that plaintiff did attempt to call a 1-800
number for Equifax, but hung up in frustration. Plaintiff’s father testified that
he first called the 1-800 number listed in the GE Money Bank declination
[letter] (see James Singletery Depo., Doc. 127, pp. 172-173), during which he
a got a recording asking for identification information for the person making
the request. Plaintiff’s father supplied the information (either by speaking it
into the telephone or by pressing buttons on the telephone number pad).
Thereafter, he and plaintiff expected to receive a credit report. When no credit
report arrive, plaintiff’s father contacted a local office of the Federal Trade
Commissions and was given a telephone number to contact Equifax.
Apparently this number was the 1-800 number for Central Source.
The 1-800 number called by plaintiff’s father on or about May 24, 2008,
was the Central Source number through which consumers call to request a free
annual credit disclosure from any or all three of the nation credit reporting
agencies, Equifax, Experian, and Trans Union. The number was not the
dedicated line for receiving “adverse action” requests for disclosure that was
listed in the GE Money Bank letter. After making the call, plaintiff received
credit reports from Trans Union and Experian, although these came more than
15 days following the request, but he did not receive a disclosure from
Equifax. Other than the initial call to the dedicated “adverse action” number,
there is no evidence that either plaintiff or his father ever told Equifax that GE
Money Bank had denied plaintiff credit, or that plaintiff was seeking a
disclosure due to the “adverse action” of the credit denial. Their dealings with

5

Equifax after May 24, 2008, were either in written letters or through the
Central Source number.
Soon after the May 24 telephone call, plaintiff or his father received a
letter from Equifax dated May 25, 2008, that acknowledged his request for a
free annual credit disclosure, (see Declaration of Alicia Fluellen, Ex. B-3, Doc.
123, p. 23); however, the letter requested that plaintiff supply additional
identification information. This letter was mailed by DDC-Philippines
employee Melissa Oray. The letter was mailed because the address for the
plaintiff given during his request for a disclosure did not match the address on
the credit file, thus requiring further identification to assure that the person
requesting the disclosure was the consumer himself. The additional
identification required by the letter included at least one form of
documentation of the plaintiff’s Social Security number and another form of
documentation containing plaintiff’s then-current mailing address of 1667
English Knoll Ln.
On June 5, 2008, plaintiff or his father mailed to Equifax a copy of his
Social Security card and a copy of his Alabama non-driver identification card,
showing his address as 1667 English Knoll. (Id., pp. 25-26). This letter was
received by Equifax (and forwarded electronically to DDC-Philippines) on
June 9 or 10, 2008. Even before the plaintiff’s letter was received, however,
Equifax received another telephonic request through Central Source for a free
annual disclosure of plaintiff’s credit file. Because of the discrepancy between
the plaintiff’s address given in the request and his address on the credit file,
another DDC-Philippines employee, Gladys Abella, sent a second letter to
plaintiff, dated June 6, 2008, requesting the same identification information
requested in the May 25 letter.
The computer system used for responding to requests for disclosure
queues the requests for display to the next available DDC-Philippines agent.
This means that different agents may deal with a particular consumer’s
disclosure request at different times; the request or follow-ups do not stay with
the first agent that deals with it. During 2008, there were approximately 270
Equifax agents and employees responding to requests for disclosure.
When Equifax ultimately received plaintiff’s June 5 letter on June 9 or
10, the information in it was sufficient to authorize an Equifax agent to update
plaintiff’s credit file to correctly reflect his current mailing address as “1667
English KN,” rather than the “116 English KN” the file contained. Equifax
6

agrees that plaintiff should have received his free annual disclosure in response
to his June 5 letter. For some reason, however, the file update did not occur,
and on June 11, a DDC-Philippines employee, John Cadiz, mailed yet a third
letter to plaintiff directing him to contact Central Source to obtain his free
annual disclosure.
Plaintiff’s father did so on June 19, 2008, again contacting Central
Source telephonically to request plaintiff’s free annual disclosure. This
request was again routed to DDC-Philippines for processing, and on June 25,
DDC-Philippines employee Mary Boliano mailed plaintiff another letter
requesting the same identification information previously requested in the May
25 and June 6 letters. Plaintiff’s credit file still was not updated to reflect his
current address as “1667 English KN,” not “116 English KN.”
On July 1, 2008, plaintiff’s father handwrote a letter to Equifax, on
plaintiff’s behalf, again supplying a copy of plaintiff’s Social Security card and
his Alabama non-driver identification card showing his current address of
“1667 English KN.” The letter also included a copy of the June 25 letter from
Equifax (DDC-Philippines). Plaintiff’s [father’s] handwritten letter stated:
To Whom It May Concern:
I have sent in your request twice, and this is my last time trying to get
a copy of my credit report. If I don’t receive a copy very soon, I will do
what’s necessary legally to obtain my credit report.
/S/ Corey Singletery
(See Fluellen Decl., Ex. B-7, Doc. 123). Equifax received the letter on July 5
and routed it to DDC-Philippines, which again failed to update plaintiff’s
credit file with the information contained in the letter. Equifax agrees that the
information was sufficient to authorize an agent to update plaintiff’s file and
make a disclosure to him. Instead, DDC-Philippines employee Romel
Cofuentes mailed a letter to plaintiff on July 8, 2008, directing him, as did the
June 11 letter, to the Central Source website to obtain his free annual consumer
disclosure.
Plaintiff complied yet again, when his father telephoned Central Source
on his behalf on July 14 to request a free annual disclosure. Once again,
because plaintiff’s address in the credit file had not been updated,
7

DDC-Philippines employee Janet Alleto mailed a letter to plaintiff on July 17,
2008, requesting the same identification information previously requested and
supplied by plaintiff twice before. Plaintiff finally received his free annual
credit report almost a year later, after this action was filed, on May 27, 2009.
Between 2007 and January 31, 2011, Equifax fulfilled 43 million
requests for consumer credit disclosures, with about 12 million being fulfilled
during 2008 alone. Of the requests actually fulfilled by Equifax, 95% were
fulfilled automatically without processing by an employee. For the time period
from March 2007 through March 2009, Central Source received 41,784,337
requests for disclosure of files from Equifax, and during that same 25-month
period, Equifax fulfilled 24,418,047 requests, or about 58.44% of the requests
received. In order to forward a request for a free annual credit disclosure to
a credit-reporting agency, Central Source requires the following data points to
identify the requesting consumer: 1) Social Security number, 2) date of birth,
3) first name, 4) middle name, 5) surname, 6) suffix (e.g., “Jr.”), 7) current
mailing address, and 8) previous mailing address if the current address is less
than two-years old. Without this information, Central Source will not forward
a request for a free annual disclosure to the respective credit-reporting
agencies. Central Source was created in response to the mandate of the FACT
Act that the credit-reporting agencies band together to create a “central” portal
through which consumers could request free annual disclosures. Central
Source does not process consumer disclosures on requests arising from an
“adverse action,” it takes only requests for free annual disclosures. Central
Source is jointly owned and operated by all three nationwide credit-reporting
agencies: Equifax, Trans Union, and Experian.
Plaintiff’s expert, Evan Hendricks, expresses the opinion that Equifax
has created a system that intentionally or recklessly makes it difficult for
consumers to obtain free consumer disclosures, and that this was done to
maximize revenue and profit. In particular, Hendricks asserts that Equifax’s
use of an “exact match” protocol for identifying consumers requesting a
disclosure defaults in favor of denying disclosure, even though Equifax uses
a “partial matching algorithm” when searching for a consumer credit file in
response to an inquiry from a subscriber creditor. Additionally he contends
that Equifax’s use of outsourced, low-pay labor to process disclosure requests
results in “hyper-compartmentalization” of the process that does not require
or even allow agents to investigate and problem-solve minor discrepancies or
problems in a consumer’s request for disclosure. The process is like an
assembly line, where low-paid employees in the Philippines quickly review
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disclosure-request information on a computer screen and are given a limited
number of choices for processing the request. Essentially, agents processing
a request can make the disclosure if the identify of the requesting consumer is
confirmed, or send a form letter requesting additional identification, or decline
the request (as, for instance, when it is a second request within twelve months).
Agents can update identification information associated with a consumer file
if sufficient documentation is presented, such as that requested in the May 25
and June 6 letters mailed to plaintiff. Hendricks expresses the opinion,
however, that Equifax agents are not properly trained and that there are no
quality assurance checks made of their work.
At least 852 consumers have complained to the Federal Trade
Commission about various problems they have experienced in obtaining their
credit-file disclosures from Equifax. Other than two of these complaints, it
appears that the complaints to the FTC are not forwarded to Equifax. Equifax
denies that it has any knowledge of complaints filed with the FTC.
Additionally, Central Source reports to Equifax and other credit-reporting
agencies complaints received from consumers regarding requests for free
annual disclosures. Exhibit C in plaintiff’s evidentiary submissions in support
of his motion for class certification is a compilation of complaint and error
reports from Central Source to Equifax. The reports break down complaints
both by whether Equifax was specifically identified as the agency involved and
by the nature of the complaint in the context of web-based requests,
VRU-based requests, and mail requests for disclosure. Looking at the months
of March 2008 through September 2008 (the months surrounding the
plaintiff’s efforts to get his credit report disclosure), the following numbers of
complaints specifying Equifax, compared to all complaints, appear:
VRU Equifax/All

Mail Equifax/All

Total for Equifax/All

3/2008
4/2008
5/2008
6/2008
7/2008
8/2008
9/2008

93 of 319 (29.1%)
108 of 369 (29.3%)
98 of 312 (31.4%)
133 of 419 (31.7%)
93 of 359 (25.9%)
73 of 299 (24.4%)
94 of 310 (30.3%)

188 of 488 (38.5%)
222 of 582 (38.1%)
202 of 523 (38.6%)
241 of 561 (42.9%)
289 of 589 (49.1%)
259 of 569 (45.5%)
269 of 592 (45.4%)

3100 of 9342 (33.2%)
3360 of 9233 (36.4%)
3045 of 8179 (37.2%)
3285 of 8636 (38.0%)
3643 of 9222 (39.5%)
3191 of 8344 (38.2%)
3000 of 8026 (37.4%)

Totals

692 of 2387 (28.99%)

1670 of 3904 (42.8%)

22624 of 60982 (37.1%)

(Doc. 149 at 7-17 [footnotes omitted].)

9

III. MOTION FOR SUMMARY JUDGMENT
A. FACTA AND CRA’S DUTY TO DISCLOSE
The Magistrate Judge set forth the law applicable to this case as follows:
The duty of a credit reporting agency [CRA] to disclose to consumers
the contents of their credit files (excluding disclosure of certain types of
information) is stated as part of the Fair Credit Reporting Act (“FCRA), at 15
U.S.C. § 1681g. “Every consumer reporting agency shall, upon request, and
subject to section 1681h(a)(1) of this title, clearly and accurately disclose to
the consumer: (1) All information in the consumer’s file at the time of the
request . . . .” The willful failure of a credit-reporting agency to make the
disclosure in response to a proper request exposes the agency to potential civil
liability under § 1681n(a), which states:
Any person who willfully fails to comply with any requirement
imposed under this subchapter with respect to any consumer is liable
to that consumer in an amount equal to the sum of –
(1)(A) any actual damages sustained by the consumer as a result
of the failure or damages of not less than $100 and not more than
$1,000; or
***
(2) such amount of punitive damages as the court may allow;
and
(3) in the case of any successful action to enforce any liability
under this section, the costs of the action together with reasonable
attorney’s fees as determined by the court.
But to be a proper request for disclosure, certain conditions apply. First, the
request for a “free annual disclosure” must be made through a “centralized
source” established by the credit-reporting agencies for the very purpose of
receiving such requests. See 15 U.S.C. § 1681j, which states:
(a) Free annual disclosure
(1) Nationwide consumer reporting agencies

10

(A) In general
All consumer reporting agencies described in subsections (p) and (w)
of section 1681a of this title shall make all disclosures pursuant to
section 1681g of this title once during any 12-month period upon
request of the consumer and without charge to the consumer.
(B) Centralized source
Subparagraph (A) shall apply with respect to a consumer reporting
agency described in section 1681a(p) of this title only if the request
from the consumer is made using the centralized source established for
such purpose in accordance with section 211(c) of the Fair and
Accurate Credit Transactions Act of 2003.
In addition to a “free annual disclosure,” a consumer may request disclosure
of his file after he has experienced an “adverse action” related to credit, such
as the denial of credit. Section 1681j(b) provides:
(b) Free disclosure after adverse notice to consumer
Each consumer reporting agency that maintains a file on a consumer
shall make all disclosures pursuant to section 1681g of this title without
charge to the consumer if, not later than 60 days after receipt by such
consumer of a notification pursuant to section 1681m of this title, or of
a notification from a debt collection agency affiliated with that
consumer reporting agency stating that the consumer’s credit rating
may be or has been adversely affected, the consumer makes a request
under section 1681g of this title.
Under either option, however, the credit-reporting agency must require that the
requesting consumer properly identify himself in order to reduce the risk of
improper disclosure and the attendant risk of identity theft. Section 1681h(a)
provides that, “A consumer reporting agency shall require, as a condition of
making the disclosures required under section 1681g, that the consumer
furnish proper identification.”
(Doc. 149 at 18-20.)

11

Plaintiff’s Amended Complaint alleges four claims against defendant: negligent and
willful violation of § 1681j(a) based on defendant’s failure to provide plaintiff with a free
annual credit disclosure and negligent and willful violation of § 1681j(b) based on
defendant’s failure to provide plaintiff with an adverse-action disclosure.
B. NEGLIGENCE CLAIMS
In response to defendant’s Motion for Summary Judgment, plaintiff conceded his
claims based on negligence. He does not seek to reassert those claims here. Therefore, the
court ACCEPTS the Magistrate Judge’s Recommendation that defendant’s Motion for
Summary Judgment be granted and plaintiff’s claims based on negligent failure to disclose
be dismissed.
C. WILLFUL FAILURE TO DISCLOSE – FREE ANNUAL REPORT
The Report and Recommendation notes four grounds upon which plaintiff rests his
claims for willful failure to disclose:
[Plaintiff] argues that this willful refusal to comply with Equifax’s duty of
disclosure can be inferred from several facts: (1) Equifax has a history of
opposing congressional action to create a consumers’ right to credit file
disclosure, (2) Equifax requires an “exact match” of the address of the
requesting consumer with the address in its files (even though it uses a “partial
matching algorithm” for producing consumer reports to creditors), (3) Equifax
has outsourced its system for responding to consumer disclosure requests to
low-paid workers in the Philippines using a “hyper-compartmentalized”
system that does not allow workers to investigate or resolve problems with
consumer addresses, and (4) a number of complaints have been filed with the
FTC and through Central Source concerning consumers having problems
getting disclosure from Equifax.
(Doc. 149 at 20-21.)
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1. History of Opposition
The Magistrate Judge found:
[T]he mere fact that Equifax opposed congressional efforts to pass the FACT
Act several years ago says nothing about its present intent to comply with
federal law. Contrary to the assertion that this prior opposition allows one to
infer continuing opposition to disclosure, the undisputed evidence shows that
Equifax has expended time, effort, and money to comply with the FCRA
mandate. It helped set up Central Source, and continues to play its role in its
continuing operation. Equifax has contracted with a number of service
providers (DDC-Atlanta, DDC-Philippines, and Intellinet) to help receive and
process consumer requests for disclosure, and it has expended time, effort, and
money to train and audit these agents. While plaintiff points to four months
in 2008 (March, April, May, and June) when DDC-Philippines’ quality
assurance standard fell below the 90% mark required by its contract with
Equifax, this also means that the vast majority of months DDC-Philippines
agents processed requests for disclosure between 2005 and 2010, an accuracy
rate of 90% was achieved. Certainly, this demonstrates a good-faith effort by
Equifax to assure the greatest accuracy possible when dealing with tens of
millions of consumer requests.
(Doc. 149 at 24-25.) Plaintiff objects to this finding on the ground that the Magistrate Judge
improperly weighed the evidence in favor of defendant and that he “invaded the province of
the jury” by inferring from evidence of defendant’s contract with DDC and of DDC’s
performance standards that defendant had acted in good faith.” (Doc. 150 at 17.)2 He does
not object to the Magistrate Judge’s finding that defendant’s “prior opposition” to the
disclosure law is not relevant to its “present intent.”

2

The page number cited in plaintiff’s Objection to Magistrate Judge’s Report and
Recommendation, (doc. 150), refer to the page numbers assigned to the document in the
court’s electronic filing system.
13

Plaintiff’s objections to the Magistrate Judge’s Report and Recommendation
regarding plaintiff’s argument based on defendant’s history of opposition to FACTA are
OVERRULED.
2. Exact Match Policy
In his Response in Opposition to Equifax Information Services, LLC’s Motion for
Summary Judgment, (Doc. 139), plaintiff contends, “Equifax’s exact match policy for
consumer disclosures violates FACTA because it requires more than the minimal personal
information necessary to properly identify consumers, including Mr. Singletery,” and
“because Mr. Singletery’s street number was not an exact match – Equifax refused to send
his [adverse-action] file disclosure and annual file disclosure.” (Doc. 139 at 32.)
The evidence is undisputed that, at the time his father requested plaintiff’s credit
report, plaintiff’s credit report showed his house number was “116,” and the house number
in his request was “1667.” He contends the difference in house numbers was a mere
“cosmetic error.”3 However, the court finds the difference is substantive and not cosmetic.4

3

Plaintiff has cited the court to the statement of John Ford, Chief Privacy Officer of
Equifax, to Congress in which he states, “If a credit report has a transposed digit or letter in
the address or a missing middle initial, for example, these are cosmetic errors, data that is
not critical to the risk decision.” (Doc. 150 at 32-33 [quoting John Ford, Fair Credit
Reporting Act: How it Functions for Consumers and the Economy § 4, ARNOLD & PORTER
LEGISLATIVE HISTORY: FAIR ACC. CREDIT ACT LEGIS. 10 (hereinafter “Ford
Statement”)][emphasis added].) However, Ford’s statement concerns “the accuracy and
integrity of [its] credit database.” Ford Statement § 4. He describes “cosmetic errors” as
errors in the credit files that do not affect the credit decisions of its subscribers. Id. Nothing
in his statement related to matching credit files with disclosure requests from nonsubscribers. As the purposes and safeguards are different between subscribers and
14

In his Objection, plaintiff cites the court to regulations, since renumbered, limiting the
information a central source could collect. (Doc. 150 at 40 [citing 16 C.F.R. § 610.2(b)(2)(ii)
now 12 C.F.R. § 1022.136(b)(2)(ii)].) The regulations regarding the “centralized source for
requesting annual file disclosures from nationwide consumer reporting agencies,” 12 C.F.R.
§ 1022.136(b)(2)(ii), states:
All nationwide consumer reporting agencies shall jointly design, fund,
implement, maintain, and operate a centralized source for the purpose
described in Paragraph (a) of this section. The centralized source required by
this part shall:
...
(2) Be designed, funded, implemented, maintained, and operated in a manner
that:
...
(ii) Collects only as much personally identifiable information as is reasonably
necessary to properly identify the consumer as required under the FCRA,
section 610(a)(1), 15 U.S.C. 1681h(a)(1),5 and other applicable laws and
regulations, and to process the transaction(s) requested by the consumer . . . .

consumers requesting credit information, the court finds Ford’s statement is not relevant to
the determination of what is a cosmetic error in a credit file with regard to free annual
disclosure requests by consumers.
4

Merriam Webster’s online dictionary defines “cosmetic” as “not substantive” and
“superficial.” See <<http://www.merriam-webster.com/dictionary/cosmetic>>.
5

“A consumer reporting agency shall require, as a condition of making the disclosures
required under section 1681g of this title, that the consumer furnish proper identification.”
15 U.S.C. § 1681h(a)(1).
15

Id. (footnote added). Plaintiff argues that defendant’s exact-match policy violates the
regulation limiting the collection of personally identifiable information to only that
information that is reasonable necessary because an exact match of a house number is not
“reasonably necessary.”
An address, including a house number, is personally identifying information that is
reasonably necessary to identify the consumer. See 12 C.F.R. § 1022.123 (b)(1). Under the
regulations, CRAs “shall develop and implement reasonable requirements for what
information consumers shall provide to constitute proof of identity for purposes” of receiving
credit file disclosures, while “[e]nsur[ing] that the information is sufficient to enable the
consumer reporting agency to match consumers with their files;” and “[a]djust[ing] the
information to be commensurate with an identifiable risk of harm arising from misidentifying
the consumer.” 12 C.F.R. § 1022.123(a)(1)-(2). “Examples of information that might
constitute reasonable information requirements for proof of identity” include ‘[t]he
identification information of the consumer including his or her full name (first, middle initial,
last, suffix), any other or previously used names, current and/or recent full address (street
number and name, apt. no., city, state, and zip code), full nine digits of Social Security
number, and/or date of birth.” Id. (b)(1)(emphasis added). Requiring a consumer to provide
his full address and requiring that the address given matches the address on file fulfills the
twin requirements of the regulations.

16

To the extent plaintiff objects to the Report and Recommendation on the ground that
providing an exact match of a consumer’s full address requires more than the minimal
personal information necessary to properly identify the consumer, that objection is
OVERRULED.
Plaintiff contends, “A jury should be allowed to determine whether the exact match
policy that Equifax has adopted, in light of the other myriad factors outlined herein,
constitutes a willful disregard of the consumer’s right to a free disclosure.” (Doc. 150 at 38.)
On motion for summary judgment, “[t]he inquiry performed [by the court] is the
threshold inquiry of determining whether there is the need for a trial – whether, in other
words, there are any genuine factual issues that properly can be resolved only by a finder of
fact because they may reasonably be resolved in favor of either party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 250 (1986). The Supreme Court in Safeco v. Burr, held, “[A]
company subject to FCRA does not act in reckless disregard of it unless the action is not only
a violation under a reasonable reading of the statute’s terms, but shows that the company ran
a risk of violating the law substantially greater than the risk associated with a reading that
was merely careless.” Safeco v. Burr, 551 U.S. 47, 69 (2007). Therefore, before addressing
the issue of willfulness or recklessness, the court must find that plaintiff has presented a
genuine issue of fact regarding whether defendant’s exact-match policy is “a violation under
a reasonable reading of [FACTA’s] terms.” Id.

17

The court finds that requiring an exact match of house numbers in the credit file and
in the request is not unreasonable. It represents a reasonable compromise between sending
the report and verifying the consumer’s identity. As set forth above, the court finds no
violation of the 16 U.S.C. § 1681j (a) or (b) based on the exact-match policy in this case.
The court finds that defendant acted reasonably in requiring additional information before
providing plaintiff, or plaintiff’s father on his behalf, with a free annual disclosure given that
the house number on file for plaintiff was significantly different from the house number
submitted by his father in his request for a free annual disclosure. Therefore, plaintiff has
not demonstrated that requesting additional personally identifying information under the facts
of this case, was a violation of FACTA.6
Plaintiff’s objections to the Magistrate Judge’s determination that the evidence did not
demonstrate a jury question as to defendant’s willfulness are OVERRULED.
Also, plaintiff objects to the distinction between creditors and consumers noted as
relevant by the Magistrate Judge. As pointed out by the Magistrate Judge, defendant
generally has no direct relationship with consumers requesting free annual disclosures.
Defendant “only do[es] business with reputable companies whose business practices [it]

6

In his Objection, plaintiff contends, “Although Singletery provided identifying
information to Equifax on several occasions, Equifax did not provide him the disclosure until
nearly a year after making his first request and only after this lawsuit was filed. (Doc. 150
at 50.) Plaintiff did not argue, in opposition to defendant’s Motion for Summary Judgment,
that his claims were based on a willful or reckless failure to update his information. (See
doc. 139 at 31-32, 42-46.) The court will not consider the issue of defendant’s policy or
practices for updating information at this stage of the proceedings.
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closely scrutinize[s] and validate[s] before qualifying them as legitimate subscribers with a
permissible purpose.” Ford Statement § 2. Unlike creditors/subscribers seeking information
on consumers, who have a history and economic relationship, consumers are unknown.
When a consumer gives defendant a significantly different address than the one on file,
defendant has a right and obligation to seek further information. Such conduct is not
unreasonable. The court finds that plaintiff has not demonstrated that defendant acted
unreasonably in failing to provide him a free disclosure given the significant difference
between the address on file and the address given by plaintiff’s father during his request.
Plaintiff also objects to the Magistrate Judge’s finding “that the risk ‘that consumer
information will be misused when requested by a creditor is less because the requester is a
known subscriber of the credit-reporting agency.’” (Doc. 150 at 31 [quoting doc. 149 at 28].)
He argues –
While on its face this conclusion seems reasonable it is simply not
correct. As noted, Equifax uses a name recognition software program for
fraud detection and to aid in the prevention of identity theft called “Safe Scan.”
Safe Scan is an Equifax product sold to its business customers, including GE
Money Bank. Equifax used the Safe Scan program when it retrieved the
plaintiff’s consumer report pursuant to a request made by its subscriber, GE
Money Bank, who, during the request, provided Equifax with the same street
number as provided by the plaintiff when making his repeated requests for his
disclosure.
Consumer disclosures, unlike consumer reports, include redacted
account numbers and Social Security numbers. Thus, logically, if a consumer
disclosure was to fall into the hands of an identity thief, the consumer is at a
far lower risk of identity fraud because the thief does not have the consumer’s
full identifying information. As we know, a request made through the Central
Source must contain the consumer’s Social Security number. Thus, if an
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impostor makes a complete request for a consumer disclosure through Central
Source, then the impostor already has more than enough personal information
to open a fraudulent account, including the victim’s full Social Security
number, name, date of birth, address and telephone number.
(Doc. 150 at 31-32.) Notwithstanding what information is presented to defendant and by
whom it is presented, the undisputed fact is that the risk that information provided to a
creditor – a subscriber to defendant’s information – will be used for an improper purpose is
less than the risk that information sent to a consumer will be misused because defendant has
scrutinized and validated the creditor/subscriber. It has not scrutinized or validated the
requesting consumers. In both cases it relies on personal identifying information to retrieve
the correct file. Requiring an exact match of personal identifying information, or additional
information if there is not an exact match, ensures that the anonymous requesters are the
consumers whose disclosures they request. The fact that the system distinguishes between
consumers and subscribers does not support an inference that defendant established a
different system in order to deny consumer’s their free annual disclosures or that it did so in
reckless disregard for consumers’ rights.
Plaintiff’s objections to the Magistrate Judge’s Report and Recommendation based
on the distinctions between information required to disclose credit files to creditors and to
consumers are OVERRULED.
3. Outsourced System for Responding to Consumer Disclosure Requests
Plaintiff objects to the Magistrate Judge’s finding that “the numbers of disclosures
requested of Equifax ‘requires a system that allows workers to make simple, quick decisions
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regarding processing, and inevitably this leads to human error.’” (Doc. 150 at 26 [quoting
doc. 149 at 29-30].) The court finds the Magistrate Judge’s logic to be unassailable as a
matter of common sense and real-world experience. The Report states that defendant
processes an average of 23,000 requests for free annual disclosures a day; therefore,
defendant “requires a system that allows workers to make simple, quick decisions regarding
processing.” (Doc. 149 at 29-30.) Human beings making quick decisions, even simple ones,
inevitably will make mistakes. (See id. at 30.)
However, plaintiff contends that the Magistrate Judge improperly weighed the
evidence because defendant did not have to make its decisions in 24-48 hours, as was its
policy. Rather, he contends that defendant had ample opportunity to allow its workers time
to investigate discrepancies because, under the law, it had 15 days to respond to consumers’
requests. (Doc. 150 at 26-27.) He states:
As an initial matter, the Act requires CRAs to adopt reasonable
procedures to handle the volume of requests it receives. The Act does not
carve out an exception for an anticipated rate of expected human error.
Indeed, Equifax’s requirement that DDC-Philippines achieve 90% accuracy
when processing the requests should be considered anecdotal evidence of
willful failure to follow the Act’s requirements.
Under the Act, a CRA has 15 days to fulfill the disclosure request so
there is nothing in the Act, which requires workers to make “simple, quick,
decisions regarding processing.” Rather, it is Equifax’s self-imposed policy
to “respond” to the disclosure requests within 24-48 hours that leads to these
quick decisions and form letters being sent. Consumers would be better served
if Equifax used more of the time it is allowed under the Act to “process” the
disclosure requests, and determine if a consumer had a cosmetic error in his
file, as more requests would actually get fulfilled. Perhaps Equifax should pay
heed to the proverb “haste makes waste.” Of course, this would take more
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time and cost Equifax more than the 8 cents it paid to process the disclosures
under its current system.
(Id. at 26-27.)
Plaintiff’s contention that defendant should have allowed its agents more time to
investigate discrepancies is irrelevant to plaintiff’s claims. The evidence is undisputed that
plaintiff’s credit file was correctly identified. However, his free annual disclosure was not
sent because of a discrepancy between the house number on file and the house number in his
request. Inadequate time to investigate was not the cause of defendant’s failure to send the
report.
As set forth above, the court disagrees that this case involves a mere “cosmetic error”
in plaintiff’s address. The discrepancy in the house number provided by plaintiff and the one
on file was significant. Assuming a worker had stopped the process to compare the house
number received – 1667 – with the house number on file – 116 – for plaintiff, the court
cannot say with any certainty that such contemplation would have resulted in plaintiff being
sent his free annual disclosure without requiring him to provide additional information of
his correct address. Without such a showing, plaintiff gains nothing from arguing that DDCPhilippines workers should have taken more time to investigate discrepancies between
information received and information on file.
In his Objection, plaintiff argues, “Equifax’s automated disclosure policies and
procedures systematically disregard additional information supplied by the consumer as
requested by Equifax.” (Doc. 150 at 34.) As he describes the problem –
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[T]he DDC agent can only see the last action taken by the previous agent who
attempted to process the consumer disclosure, such as a sent form letter
requesting additional information. . . . Here, Plaintiff supplied Equifax with
supporting identifying documents and, admittedly, at least two agents did not
update the consumers file upon receipt of the requested information, the other
DDC agents who received the plaintiff’s repeated requests for his consumer
disclosure were not able to correct the other agents’ errors, and disclose the
contents of the consumer’s disclosure. Consequently, Plaintiff found himself
ensnared in Equifax’s “bureaucratic nightmare, as he responded time and time
again to requests for additional information, only to have it go unheeded
repeatedly.”
(Doc. 150 at 34-35 [citing doc. 149 at 28].)
The evidence in the record shows that defendant’s practice is to forward the request
and the additional identifying information together. The agent receiving the request and the
additional information is required to update the file with the additional identifying
information and send the free annual disclosure. Preventing agents from looking at
documents in files that should have been updated hardly suggests behavior designed to deny
consumers their free annual disclosures willfully, nor could such behavior be considered a
reckless disregard of the obligation to provide reports.
Under plaintiff’s purported scheme, a consumer, with a discrepancy between the
information he provided and the information in his report, requests his free annual report.
Because of the discrepancy, he is sent a form letter requesting additional information. He
dutifully responds with the additional identifying information and again requests a free
annual disclosure. The agent receiving the second request and additional identifying
information, despite specific instructions to do so, fails to update the file and sends a second

23

form letter. The problem is not a policy that prevents a third agent receiving a subsequent
request from viewing additional information received by the second agent. The problem is
that the second agent did not update the information. However, plaintiff did not base his
claims on this error or problem with defendant’s system. Rather he limited his claim to the
exact-match policy.7
Plaintiff’s objections to the Magistrate Judge’s Report and Recommendation based
on defendant’s outsourced system for responding to consumer disclosure requests are
OVERRULED.
4. Complaints to FTC and Central Source
Plaintiff objects to the Magistrate Judge’s finding that the number of complaints
regarding defendant to the FTC and to Central Source are not sufficient to infer defendant
acted willfully or with reckless disregard.
The court has reviewed plaintiff’s evidence regarding the number of complaints made
to the FTC and to Central Source and it finds plaintiff has not shown that these complaints

7

Plaintiff did not argue that defendant willfully or recklessly failed to update his
information resulting in his failure to receive his free annual report in opposition to
defendant’s Motion for Summary Judgment. Perhaps this omission was the result of
information obtained in discovery showing the failure to update the information was not a
policy or practice of defendant and/or the failure to update his file was merely negligent.
Regardless of the reason, plaintiff did not argue before the Magistrate Judge that the failure
to update his consumer’s file with additional identifying information was the cause of his
failure to receive his free disclosure and/or that such repeated failures were reckless.
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are sufficiently significant to allow the court to infer that defendant willfully or recklessly
disregarded its obligation to provide free annual disclosures upon request.
As a percentage of the total number of requests received, the number of complaints
is too small to support an inference of willfulness. Plaintiff argues that the Magistrate Judge
should not have compared the complaints to the total number of requests as the complaints
cover only an eleven-month period. Without citation to the record or to caselaw, plaintiff
also argues, “The fact that 3,000 consumers each month wrote to . . . Central Source to
complain about Equifax is very significant when the Court considers consumer psychology.”
(Doc. 150 at 21.) Under the circumstances, the court declines plaintiff’s invitation to
consider the complex and multi-faceted issue of “consumer psychology.” Moreover, 3,000
complaints a month out of an average of 976,000 requests, or .31%, is not sufficient to
establish defendant had notice that its system was wrongfully denying consumer requests.
The court finds no disputed fact concerning the conclusion of the Magistrate Judge that the
number of complaints as compared to the number of requests was “minuscule” and “tiny,”
(doc. 149 at 25), and not statistically significant.
Also, plaintiff has not presented this court with any statistical analysis of the
complaints to allow the court to assess the merits of the complaints and their similarity to
plaintiff’s complaint. If a complaint has no merit and the complainer was not entitled to a
free annual disclosure, the complaint says nothing about defendant’s intent. Moreover, if the

25

complaint does not concern defendant’s exact-match policy, it does not support an inference
that defendant’s exact-match policy is the result of willfulness or reckless disregard.
The court finds that plaintiff has not shown that the complaints made to the FTC
and/or Central Source support an inference that defendant acted willfully or recklessly.
Plaintiff’s objections to the Magistrate Judge’s Report and Recommendation on this ground
are OVERRULED.
Based on the foregoing, the court ADOPTS the Recommendation that defendant’s
Motion for Summary Judgment be granted. Plaintiff has not shown that defendant’s policy
of requiring an exact match of the house numbers in his report and in his request before
sending his free annual disclosure is an unreasonable violation of FACTA.
D. WILLFUL FAILURE TO DISCLOSE FOLLOWING ADVERSE ACTION
Plaintiff contends that the Magistrate Judge “overlooked” the fact that defendant’s
“phone script for consumers that call requesting a free disclosure after an adverse action”
does not allow consumers to request the report but rather directs them to defendant’s website
where they are required to “burn” their free annual disclosure. (Doc. 150 at 48-49.)
Plaintiff has offered nothing to show that he requested a disclosure on the adverse
action hotline. His father testified that he called the number and did not receive the adverseaction disclosure. However, he did not testify that the recording sent him to the website and
he had to burn plaintiff’s free annual disclosure. Nothing in the record shows that plaintiff
or his father went online to defendant’s website. In his Objection, plaintiff does not cite the

26

court to any evidence that plaintiff or his father were denied his adverse-action disclosure
based on defendant’s automated phone system sending them to defendant’s website.
Therefore, any objections to the Magistrate Judge’s Report and Recommendation
based on issues with defendant’s automated phone system are OVERRULED.
In support of its Motion for Summary Judgment, defendant presented evidence that
plaintiff, or his father, had not requested an adverse-action disclosure and that it had no
record of an adverse action against plaintiff from GE Money. (Doc. 124 ¶¶ 19-20.) Other
than James Singletery’s testimony that he called the 1-800 number and requested the adverseaction disclosure, (see doc. 127 at 171-73, 176, 184), nothing in the record supports an
inference that defendant willfully failed to provide plaintiff an adverse-action disclosure.
Plaintiff’s objections regarding the Magistrate Judge’s Report and Recommendation
that his claim based on the adverse-action disclosure be dismissed are OVERRULED.
Based on the foregoing, the Magistrate Judge’s Report is ADOPTED and his
Recommendation is ACCEPTED. The court is of the opinion that there are no material facts
in dispute and that defendant is entitled to judgment as a matter of law. An Order granting
defendant’s Motion for Summary Judgment, (doc. 119), will be entered contemporaneously
with this Memorandum Opinion.
IV. MOTION FOR CLASS CERTIFICATION
The Magistrate Judge reported that plaintiff had failed to meet the requirements of
commonality and typicality for certifying a class. (Doc. 149 at 37, 38.) He also found that

27

plaintiff was not an adequate class representative, that common issues of fact or law did not
predominate over individual issues, and a class action was not superior to individual actions.
(Id. at 40, 41, 45.) Based on plaintiff’s failure to meet the Rule 23 requirements for a class
action, he recommended that plaintiff’s Motion for Class Certification be denied. Plaintiff
objects to these findings and the Magistrate Judge’s Recommendation. (See doc. 150 at 5172.)
This court has carefully reviewed and considered de novo all the materials in the court
file, including, but not limited to, the Report and Recommendation and plaintiff’s objections.
Based on its review, the plaintiff’s objections to the Magistrate Judge’s Report and
Recommendation regarding his Motion for Class Certification are OVERRULED, the
Magistrate Judge’s Report is ADOPTED and his Recommendation that plaintiff’s Motion
for Class Certification should be denied is ACCEPTED.
An Order denying plaintiff’s Motion for Class Certification, (doc. 94), will be entered
contemporaneously with this Memorandum Opinion.
DONE, this 18th day of September, 2012.

SHARON LOVELACE BLACKBURN
CHIEF UNITED STATES DISTRICT JUDGE

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