Caddell & Chapman Menu

Credit Reporting Agencies

Inaccurate Credit Reporting Class Action

On August 19, 2008, Caddell & Chapman received approval from a Central District of California court of an injunctive relief settlement for class action claims regarding the three largest credit reporting agencies in the nation. On this day, the court issued an order requiring the defendants to fundamentally change their reporting practices regarding consumers with Chapter 7 no‑asset bankruptcies. This change in defendants’ reporting practices will require them to finally provide accurate information in millions of consumers’ credit reports. This settlement has been described by the Wall Street Journal as providing consumers “a second chance at a fresh start.” A leading bankruptcy scholar described this settlement as “ground‑breaking,” while a credit industry expert described it as a “landmark” change.

These three defendants, Trans Union LLC, Equifax Information Services LLC, and Experian Information Solutions Inc., are the nation’s major repositories for consumer credit information. The credit reports and credit scores these defendants generate concern every consumer in the United States who has a credit history. The case involves these defendants’ violations of certain obligations imposed upon them by federal and state statutes. Plaintiffs are individuals who had their debts discharged through a Chapter 7 bankruptcy and about whom defendants have prepared inaccurate credit reports, which continue to show the discharged debts as due and owing. The credit industry describes these type of debts as “zombie debt.” These inaccurate credit reports prevent consumers from having a “fresh start” following their bankruptcy and can make it difficult for them to obtain credit. Even if the consumers obtain credit, the cost of this credit, including higher interest rates, can be more expensive than it would be if the credit reports were accurate. Defendants have estimated the nationwide class of consumers affected by their practices to be as many as 10 million people. Before winning this landmark victory, Caddell & Chapman and its co‑counsel had been successful in defeating a motion to dismiss filed by one defendant and a motion for preliminary approval of a class action settlement in a different case, before the same court, concerning the same facts and causes of action. The court agreed with the concerns expressed by Caddell & Chapman and its co‑counsel about the limited relief provided to consumers in the earlier, proposed settlement.

On April 6, 2018, the Court finally approved a settlement of related monetary-relief claims on behalf of a class of consumers whose pre-bankruptcy debts were reported as due and owing after they had emerged from bankruptcy. The settlement creates a non-reversionary fund consisting of approximately $38.7 million and provides Class members options to claim monetary awards or a package of non-monetary benefits. A group of objectors has appealed approval of the settlement to the Ninth Circuit Court of Appeals. Further details regarding the claims process and settlement administration are available at www.bankruptcydischargesettlement.com.

Class action lawyers representing plaintiffs nationwide in consumer protection, product defect, FCRA, and other complex cases. Both Michael Caddell and Cynthia Chapman have been named by LawDragon as two of the “500 Leading Plaintiffs’ Lawyers in America.” All Caddell & Chapman lawyers have been recognized by SuperLawers as outstanding in their field.

, , , , , , , ,

No comments yet.

Leave a Reply