Equifax Pays Out Almost $3 Million for Faulty Credit Reporting
Since the collapse of the subprime mortgage industry, much finger-pointing has taken place. It seems everyone is trying to determine who's liable for their losses.
Juries and judges have found that both lenders and borrowers were responsible for fraud. But some would-be borrowers face bigger problems than lending scams. One Florida woman was unable to get a mortgage loan (not to mention other kinds of loans) for 12 years because of the criminally negligent reporting practices of Equifax, a major credit reporting bureau.
Angela P. Williams, a medical transcriptionst, learned the answer to that question the hard way. In 1995, Williams became aware that Equifax, Experian and American Recovery Systems, three credit reporting bureaus, were listing incorrect information on her credit reports, according to sources.
Williams contacted the bureaus and attempted to correct the mistakes, which she reportedly discovered resulted from a name mix-up: the incorrect items were from the report of another Angela Williams, who had a similar Social Security Number-and very unhealthy credit habits.
Reports indicate that, because of the automated customer-service systems the bureaus used, Williams was unable to clear her credit report. Apparently, even if a charge was removed, it usually appeared on her report again after a short time.
Sources suggest that many credit-reporting bureaus use automated systems to lower costs and maximize profits-but they often leave consumers without adequate help for their credit inquiries. Proof that the automatic systems aren't working well has come in the form of lawsuits, several of which have been filed against bureaus in the past years.
After eight years of unsuccessful attempts at clearing her credit, Williams filed personal injury lawsuits against the three bureaus. Two settled out of court, but Equifax let the case go to trial-and ended up losing big time.
According to reports, a jury awarded Williams $217,000 in actual damages and $2.7 million in punitive damages-the biggest punitive damage verdict ever to be handed down against Equifax.
Sources report that Equifax plans to appeal the decision, since many damage amounts are reduced in appellate court. But supporters of the jury's decision hope the court will uphold the ruling, sending the message to credit bureaus that consumers should not be ignored in the quest for greater profits.
Perhaps the most surprising part of this case is how long Williams waited before taking legal action. During the eight years that her credit report was faulty, she was unable to get credit cards, ATM cards or student loans. And a mortgage loan was completely out of the question.
As a result, Williams is reportedly an unlicensed medical transcriptionist, since she couldn't afford to pay for the requisite licensing classes.
Williams' struggle against Equifax's careless credit-reporting standards and negligent violation of credit-reporting law serves to illustrate the importance of checking your credit report regularly. Remember, each of the three major credit reporting bureaus is required to give you one free credit report annually.
If you're not looking out for your credit health, nobody is.