McComas v. Experian Information Solutions, Inc.
Filing
68
MEMORANDUM OPINION & ORDER: It is ordered that dft's 53 MOTION for Summary Judgment is GRANTED. Signed by Judge Danny C. Reeves on 7/29/2015.(SCD)cc: COR,Pro Se Pla(via US Mail)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
CENTRAL DIVISION
(at Lexington)
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SUZANNE MCCOMAS,
Plaintiff,
V.
EXPERIAN INFORMATION
SOLUTIONS, INC., et al.,
Defendants.
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Civil Action No. 5: 14-371-DCR
MEMORANDUM OPINION
AND ORDER
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This matter is pending for consideration of a motion for summary judgment filed by
Defendant Experian Information Solutions, Inc. (“Experian”) in this action under the Fair
Credit Reporting Act, 15 U.S.C. § 1681, et seq. (“FCRA”). Plaintiff Suzanne McComas
seeks damages relating to two separate errors in two accounts reflected in her Experian
information. Experian used reasonable procedures to assure accuracy of the information
included in McComas’ credit report and complied with its obligations to promptly investigate
and correct errors. Accordingly, Experian’s motion for summary judgment will be granted.
I.
Experian is a Consumer Reporting Agency (“CRA”) subject to the FCRA. As a
CRA, Experian collects information from data furnishers, known as “subscribers,” and then
provides that information to the individual, or consumer, and creditors. [Record No. 53-3, p.
3] Experian does not originate the credit information contained in consumer credit reports.
[Id.] It does not extend or deny credit, but provides a resource for creditors and others to
access. [Id.] Subscribers submit updates to the accounts for individual consumers. An
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individual’s account information may also be updated as a part of the dispute resolution
process or single item update. [Id.]
A. H & R Account
In 2013, McComas tried to obtain a mortgage loan from Farm Credit Mid-America
and Central Kentucky AgCredit to purchase a home in Cynthiana, Kentucky; however, her
applications were denied.
[Record No. 53-4, p. 21]
She eventually applied for, and
obtained, financing for the property from Whitaker Bank.
[Record No. 53-4, p. 11]
McComas and her ex-husband, a co-signer on the mortgage, own the Cynthiana home
jointly. [Record No. 53-4, p. 12]
On July 24, 2013, an Experian agent processing a transaction log from H & R
Accounts made a mistake when revising McComas’ account information. [Record No. 53-3,
p. 6]
As a result, between July 24, 2013 and August 27, 2013, Experian’s records
erroneously reflected that one of McComas’ debts was a foreclosure action with H & R
Accounts with a past due balance totaling $342,732.00. [Record No. 53-3, pp. 6–7] Prior to
July 24, 2013, the H & R Account was accurately reported as a collection in the amount of
$209.00. [Record Nos. 1, ¶ 8; 53-4, p. 21–22]
On August 26, 2013, McComas contacted Experian regarding the error. [Record No.
53-4, p. 25] Experian started the reinvestigation the same day by contacting H & R Accounts
to investigate the accuracy of the report. [Record No. 53-3, p. 7] The next day, H & R
Accounts instructed Experian to delete the account. [Record No. 53-3, p. 7] Experian
deleted the account the same day and forwarded notification of the resolution to McComas.
[Record Nos. 53-3, p. 7; 53-4, p. 17; 53-5]
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Although Experian’s records relating to H & R Accounts were inaccurate between
July 24, 2013 and August 27, 2013, there were no inquiries for mortgage financing between
those dates. [Record No. 55-3, p. 22] Thus, none of the mortgage financing entities,
including Farm Credit Mid-America, Kentucky Bank, Central Kentucky AgCredit, or
Whitaker Bank, received a credit report with the incorrect information regarding H & R
Accounts. [Record No. 53-3, p. 8]
B. Citibank Account
In the course of responding to a dispute letter regarding McComas’ account with
Home Depot, financed through Citibank, N.A. (“Citibank Account”), Citibank provided an
updated account balance to Experian on January 9, 2014. [Record No. 53-3, p. 8] In that
correspondence, Citibank listed the account balance as $53,700.00 rather than the correct
balance of $5,370.00. [Record No. 53-3, p. 9] Although the balance increased, the rest of
the Citibank Account information remained accurate.
Thus, at all relevant times, the
Citibank Account accurately reflected that it was “charged off,” with $5,370.00 written off
by Citibank. [Record No. 53-11, p. 9]
In April of 2014, McComas applied to refinance her mortgage without a cosigner.
[Record No. 53-4, p. 13–14] On April 11, 2014, Veterans United Home Loans (“Veterans
United”) obtained a tri-merged credit report, which contained credit scores and other
information by Experian, Trans Union, and Equifax. The tri-merged credit report listed
McComas’ Experian credit score as 628, her Trans Union score as 698, and her Equifax
score as 558. [Record No. 53-7, p. 11] Veterans United denied McComas’ application. It
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listed the principal reason1 for the denial as “[d]elinquent past or present credit obligation
with others.” [Record No. 53-9, p. 2]
On May 8, 2014, McComas contacted Experian to request a reinvestigation of the
Citibank Account. [Record No. 53-4, p. 26] Experian began the reinvestigation on the same
day. [Record No. 53-3, p. 9] On May 14, 2014, Citibank responded to Experian with
instructions to revise McComas’ recent balance to $5,370.00 and update the past due amount
from $4,463 to $4,733. [Record No. 53-3, p. 9] Experian made the requested changes on the
report and sent McComas documentation regarding the results of the reinvestigation on the
same day. [Id.]
Six days later, on May 20, 2014, Veterans United requested another tri-merged credit
report. This new tri-merged report accurately reflected the recent balance the Citibank
Account as $5,370.00. [Record No. 53-17, p. 5] Veterans United subsequently contacted
McComas, but she was not approved for refinancing. [Record No. 53-10, p. 6]
II.
Summary judgment is appropriate when there are no genuine disputes regarding any
material facts and the movant is entitled to judgment as a matter of law. Fed. R. Civ. P.
56(a); see Celotex Corp. v. Catrett, 477 U.S. 317, 322–23 (1986); Chao v. Hall Holding Co.,
285 F.3d 415, 424 (6th Cir. 2002). A dispute over a material fact is not “genuine” unless a
reasonable jury could return a verdict for the nonmoving party. That is, the determination
must be “whether the evidence presents a sufficient disagreement to require submission to a
1 McComas claimed during her deposition that the loan officer informed her that the loan was denied
because “the credit report was showing a $53,700 debt from Home Depot . . . that was it, that I had a huge
revolving debt.” [Record No. 53-4, p. 14]
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jury or whether it is so one-sided that one party must prevail as a matter of law.” Anderson
v. Liberty Lobby, Inc., 477 U.S. 242, 251–52 (1986); see Harrison v. Ash, 539 F.3d 510, 516
(6th Cir. 2008). In deciding whether to grant summary judgment, the Court views all the
facts and inferences drawn from the evidence in the light most favorable to the nonmoving
party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986).
III.
A. Unreasonable Procedure Claim (15 U.S.C. § 1681e(b))
McComas claims that Experian did not follow reasonable procedures to assure the
accuracy of the information contained in her report.
15 U.S.C. § 1681e(b).
Experian
concedes that incorrect information regarding the H & R Account and Citibank Account was
included in McComas’ information. Inaccurate information in a credit report, however, does
not automatically make a CRA liable to the affected consumer. Instead, the CRA is required
to exercise reasonable care, which is defined “by reference to what a reasonably prudent
person would do under the circumstances.” Spence v. TRW, Inc., 92 F.3d 380, 383 (6th Cir.
1996).
To succeed on her claim, McComas must show that:
(1) Experian reported
inaccurate information about her; (2) Experian either negligently or willfully failed to follow
reasonable procedures to assure maximum possible accuracy of the information about her;
(3) she was injured; and (4) Experian’s conduct was the proximate cause of her injury.
Nelski v. Trans Union, LLC, 86 F. App’x 840, 844 (6th Cir. 2004).
With respect to the H & R Account, none of the mortgage companies, including
Kentucky Bank, Central Kentucky Ag Credit, or Whitaker Bank requested, or received, a
credit report for McComas during the period of July 24, 2013 to August 26, 2013, which
reflected the incorrect information. In fact, there is no evidence suggesting that any reports
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were issued during the time that time.2 Brown v. Wal-Mart Stores, Inc., 507 F. App’x 543,
546 (6th Cir. 2012) (“Under the plain language of § 1681e(b), [a plaintiff] cannot maintain a
claim for allegedly improper procedures unless the consumer reporting agency actually
issued a consumer report about him.”).
With respect to the Citibank Account, McComas has shown that she was denied
mortgage refinancing by Veterans United, but has not demonstrated that it was caused by any
error in the Citibank Account or as the result of Experian’s actions. Veterans United denied
McComas’ application on April 11, 2014, but she had not challenged the amount reflected
for the Citibank Account in Experian’s report at that time. See Reed v. Experian Information
Solutions, Inc., 321 F. Supp. 2d 1109, 1115 (D. Minn. 2004) (“A CRA cannot be held liable
for a denial of credit occurring before it has been put on notice that its report is disputed.”).
The statement of credit denial gave only one reason for the denial—“[d]elinquent past or
present credit [obligation with] others.” [Record No. 53-9, p. 2] The Citibank Account error
only changed the recent balance, not the other account information, such as the past due
amount of $4,463. [Record 53-17, p. 5]
After Experian corrected the Citibank Account error, Veterans United requested
another tri-merged credit report, dated May 20, 2014. McComas admitted that the May 20,
2014, report correctly reflected that the Citibank Account balance was $5,370. [Record Nos.
53-4, pp. 18–19; 53-10, p. 6] Her loan remained denied, despite the correction.3
2 The inquiries associated with an application for credit are referred to as “hard” inquiries. They are
reflected on the credit report or credit disclosure to the consumer.
3 McComas testified that the loan officer told her that the information still had not been corrected in the
May 20, 2014 report. [Record No. 53-4, pp. 16–17] (“The one that he saw [on May 20, 2014], it wasn’t
fixed yet, no. I believe that’s what happened.”). However, the May 20, 2014 report submitted to this
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Veterans United stated that she was denied due to delinquent past or present credit
obligations. Experian notes that Veterans United’s manual underwriting policy states that
loans “must” meet certain requirements, including that an applicant have no more than
$5,000.00 in collections. [Record No. 53-8, pp. 29–30] Approval of an amount up to
$5,000.00 is “at underwriter discretion.” [Id.] McComas’ April 11, 2014 tri-merged account
listed a sum of $8,655.00 of accounts in collection. [Record No. 53-7, p. 4] McComas
argues that the loan officer assured her that these collection amounts were “not an issue for
the denial,” and that she met certain exceptions to the policy. [Record No. 57, ¶ 8]
Despite McComas’ assertions, however, Veterans United denied her application due
to delinquent past or present credit obligations, which were not impacted by the Citibank
Account error relating to the current balance of the account. Certainly, the fact that her
application continued to be denied even after the Citibank Account was corrected would
suggest that it was not a factor in Veterans United’s decision.
The Court need not reach this issue, however, because even drawing all reasonable
inferences in favor of McComas, she has not presented any evidence to suggest that
Experian’s conduct was the proximate cause of Veterans United’s denial of her loan
application or any other harm. Moore v. First Advantage Enter. Screening Corp., Case No.
4:12-cv-0792, 2013 WL 1662959, at *4 (N.D. Ohio April 17, 2013) (“The burden of proving
Court is correct and McComas admitted that the May 20, 2014, report contained the correct information.
[Record No. 53-4, pp. 18–19] While McComas did not raise this statement by the loan officer in her
response to the motion for summary judgment, the Court notes that this hearsay statement is insufficient
to create a genuine material issue of fact under the circumstances presented. The loan officer’s alleged
statement is directly contradicted by evidence before the Court and McComas’ admissions.
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causation remains with [the plaintiff] at all times to prove that the alleged FCRA violation
was a substantial factor in causing the asserted actual damages.”).
In support of her reasonable procedures claim, McComas points to evidence that
Experian has the capability to monitor and alert consumers immediately when an error is
reported on their credit report and argues that it is obligated to do so under the FCRA. This
would amount to a requirement that Experian verify, or reinvestigate, each and every account
every time new information is provided. She faults Experian for only monitoring accounts of
consumers who are paying a monthly fee for the service.
McComas argues that this
dereliction of Experian’s duty demonstrates willful negligence. However, the service she
describes, known as “Credit Tracker,” is provided by a third-party [Record No. 57-4, p. 7],
and the FCRA does not impose such a high burden on CRAs. Nelski, 86 F. App’x at 847
(rejecting the argument that the FCRA requires verification of debts with each creditor each
time a report is released). Instead, the statute places the onus on the consumer to monitor
their own information. “If the accuracy of an item of information contained in a consumer
credit file is disputed by the customer, the statute contemplates that the consumer will
convey this information to the reporting agency so that the agency can record the current
status of the information.” Spence, 92. F.3d at 383.
Finally, McComas argues that Experian “admitted to a total of 28 separate inquiries
by different entities during the time the erroneous information was included on [her] credit
report.” [Record Nos. 57, p. 3; 57-3, pp. 13–22] These were “soft” inquiries, which are
inquiries by subscribers that are not associated with an application for credit during the
relevant time frame. These soft inquiries do not result from a credit application, but may be
made for other purposes. [Record No. 53-3, p. 7] These inquiries only appear on credit
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disclosures to the consumer. [Record No. 53-3, p. 7] They are not reflected on a credit
report and the number of inquiries does not impact a consumer’s credit score. [Record No.
53-3, p. 7]
Although McComas generally argues that she was harmed by information provided in
the course of these soft inquiries, she has not presented any evidence that she was harmed as
a result of the incorrect data, or as a result of Experian’s conduct, related to these inquiries.
Further, she has not demonstrated that any of the soft inquiries impacted her credit or that
any of the subscribers making a soft inquiry requested a credit score. Credit scores are
generated upon demand and calculated based on the information available in a report on a
particular date. [Record No. 57-4, p. 9] McComas generally argues that past incorrect
information continues to harm her credit score, but she does not point to any evidence to this
effect. Further, inaccurate information alone is insufficient to impose liability on Experian.
In short, McComas has not demonstrated that any genuine issues of material fact exist
regarding injury or causation on this claim.
B. Unreasonable Investigations Claim (15 U.S.C. § 1681i)
A CRA’s duty to conduct a reinvestigation is not triggered until the consumer notifies
the agency directly, or indirectly through a reseller, of the dispute. 15 U.S.C. § 1681i. But
once notified, the CRA must “conduct a reasonable reinvestigation to determine whether the
disputed information is inaccurate and record the current status of the disputed information,
or delete the item from the file” within thirty days. Id. Thus, to survive summary judgment,
McComas must show that she disputed information in Experian’s report and that it failed to
reinvestigate the information, or failed to confirm, correct, modify, or delete the questioned
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information within the requisite time period. Reed v. Experian Info. Solutions, Inc., 321 F.
Supp. 2d 1109, 1113–14 (D. Minn. 2004). She cannot meet this burden.
After McComas challenged the H & R Account, Experian conducted a prompt
reinvestigation, corrected the account, and informed McComas of the result of the
reinvestigation within two days. Likewise, Experian promptly reinvestigated McComas’
dispute regarding the Citibank Account. That reinvestigation was completed within six days
of McComas’ dispute of the information contained in the report.
Relying on Experian’s Disclosure Logs, McComas argues that she contacted Experian
regarding the H & R Account on July 26, 2013, and August 19, 2013. The entries for those
dates of correspondence state “Duplicate Dispute – No Action.” [Record No. 57-5, pp. 2–3.]
McComas argues that these entries are proof that Experian took “no action” in response to
her dispute. These entries are included in a long list of disputes relating to several accounts,
all occurring on the same days.4 Although she claims that this represents Experian’s failure
to conduct a reasonable reinvestigation, the letters received on July 26, 2013, and August 19,
2013, contested that McComas was responsible for the H & R Account at all, not that the
account information was incorrect. [Record No. 53-12, pp. 44, 47 (“I am not longer liable
for [the H & R Account].”)] McComas, or Prime Legal Services, acting on her behalf, had
disputed every negative account in her name on numerous occasions in the past, which
resulted in the “duplicate” classification. [Record No. 53-4, pp. 9–10] Because Experian
had previously investigated this account, and determined that McComas was the owner of the
4 McComas contracted with a credit repair company, Prime Legal Services, which also contacted
Experian on her behalf during the relevant time period. [Record No. 53-2, p. 3] A number of her
accounts, including the Citibank Account, were repeatedly challenged as fraudulent accounts, either by
McComas or the credit repair company on her behalf. [Record No. 53-4, pp. 9–10]
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account, it properly classified the duplicate dispute that the account was fraudulent as
frivolous under 15 U.S.C. § 1681i(3)(A). Experian’s duty to conduct a reinvestigation was
only triggered when McComas challenged the amount of the recent balance on May 8, 2014.
Similarly, with respect to the Citibank Account, McComas or Prime Legal Services,
acting on her behalf, submitted several letters to Experian arguing that this account was a
fraudulent account opened by someone who stole her identity. [Record No. 53-12, pp. 1–55]
However, the first time that the amount of the account was challenged was May 8, 2014, the
same day that Experian began its reinvestigation. Accordingly, McComas has not presented
any evidence suggesting that Experian violated its duties to conduct a timely and reasonable
reinvestigation.
C. Punitive Damages Claim (15 U.S.C. § 1681n(a)).
Experian may be liable for punitive damages if it “willfully fails to comply with a
requirement” imposed under the FCRA. 15 U.S.C. § 1681n(a). As discussed, McComas has
not demonstrated that Experian violated its duties under the FCRA, either negligently or
willfully. Accordingly, punitive damages are unavailable.
IV.
Based on the foregoing analysis and discussion, it is hereby
ORDERED that the defendant’s motion for summary judgment [Record No. 53] is
GRANTED.
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This 29th day of July, 2015.
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