Huge FCRA Verdict Against Equifax Shows Potential Costs Of Failing To Protect And Correct Consumer’s Credit History

Last week an Oregon jury awarded an individual plaintiff over $18 million in compensatory and punitive damages in what some sources have reported to be the first jury verdict in a case brought under the Fair Credit Reporting Act ("FCRA"), 15 U.S.C. § 1681a(c). The plaintiff, Julie Miller, discovered problems with her credit report in 2009, when a bank, citing Ms. Miller's poor credit history, rejected a loan to her son for which Ms. Miller was a co-signer. Ms. Miller requested a copy of her credit report from Equifax and discovered that her credit history contained erroneous information, including an incorrect Social Security Number ("SSN"), an incorrect birthdate, and charges and collection activity relating to obligations that Ms. Miller had never incurred. Over the course of the next two years Ms. Miller contacted Equifax nine times in a fruitless effort to correct the credit report. Only then did she bring suit against Equifax, seeking compensatory and punitive damages under the FCRA.

Discovery revealed that Ms. Miller was the victim of a "mixed file," a known phenomenon in which two individuals' credit histories are conflated into a single record. The plaintiff's credit record had become intertwined with that of another Julie Miller who shared the same middle initial, was the same age, and had an SSN that shared seven of nine digits with Ms. Miller's SSN. These coincidences resulted in the mixing of the two credit records, with the other Julie Miller's bad credit history becoming a part of the plaintiff Julie Miller's credit report. Although Equifax had established procedures to address and resolve mixed file issues, Equifax admitted in its pretrial memo "that it should have taken additional steps to assure that Plaintiff's disputes were handled pursuant to its mixed file procedures . . . ." Equifax's defenses at trial were that the mixed file was not the result of inadequate procedures, and that its flawed implementation of mixed file procedures was not a willful violation of the FCRA. After three days of trial the jury rejected both of these arguments, finding that Equifax's violations of the FCRA had resulted in actual damages of $180,000, and that such conduct was willful, thus warranting punitive damages of $18,400,000.

The large verdict against Equifax illustrates...