Pennsylvania Consumer Reporting Agency Accused of Violating FCRA

December 01, 2023

A recent proposed class action has accused a Pennsylvania-based consumer reporting agency (CRA) of violating the Fair Credit Reporting Act (FCRA). The suit alleged that the CRA failed to ensure maximum accuracy with its consumer reports. The eleven-page-long lawsuit included another accusation: It did not reconcile conflicting data obtained from other CRAs. This failure led to inaccuracies in the consumer reports it delivered.

The Lawsuit

According to the lawsuit, the CRA compiled and published reports with inconsistent information. It also sold these inaccurate reports to customers. These actions happened despite the FCRA requiring CRAs to have procedures for ensuring accuracy. CRAs must consistently follow these established processes to ensure they assemble, compile, and sell accurate information only.

The plaintiff is a New Jersey resident who said he applied for a mortgage in 2021. He paid off the outstanding balance of $2,147 before applying. A credit account wrote this payment as charged-off. Afterward, the defendant prepared a consumer report using information acquired from other CRAs. However, the defendant’s report had inaccurate information about the plaintiff’s credit account. 

According to the lawsuit, one mistake in the report stated that the charged-off account had a past-due balance of $2,147. It also claimed that the defendant should have recognized the inaccuracies with the charged-off account. The account had a balance of zero. Therefore, it could not have a $2,147 past-due balance. 

The CRA had falsely reported that the account required a $64 monthly payment for the incorrect past-due balance. The complaint states that the defendant should have realized that a paid-off account would not require future payments. It also alleged that the defendant received conflicting information from three other CRAs on the charged-off credit account. Two CRAs had correct data, confirming it did not have a past due amount. Regardless, the defendant chose not to reconcile the obtained information.

The Effects

The plaintiff claimed that the incorrect reporting damaged his reputation and creditworthiness. The inaccuracies were a substantial factor in his decreased borrowing capacity, which led to his inability to obtain a mortgage on favorable terms. The suit also accused the CRA of acting with “grossly negligent disregard” for its obligations under the FCRA and the rights of its customers. 

The lawsuit intends to represent people in the U.S. or its territories affected by the defendant’s actions. It addresses how the defendant merged account information with different balances from several CRAs into a report for the affected. It also condemns the CRA for selling the data to a third party from November 16, 2018, through the present time. The people represented would include those whom the CRA falsely reported to have balances owed or a past due amount for charged-off accounts. 

This case shows the importance of complying with the FCRA. Failure to do so can result in fines, penalties, and lawsuits. Complying with the FCRA is as essential for background checks as credit reports. The best way to ensure accurate background checks that comply with the FCRA and other employment laws is to partner with a trusted background check company.

Background checks are made easy with JDP. Ask any questions you may have and learn more by contacting a sales rep today.