Equifax slammed with $3 million identity mix-up verdict

Anyone who has had ever to deal with the any of the credit reporting agencies will smile at this one: A jury yesterday said Equifax will pay nearly $3 million for failing to correct dramatic errors in a credit report.

A Florida Circuit Court jury Equifax must pay medical-transcription worker Angela Williams $219,000 in actual damages and $2.7 million in punitive damages for negligent violation of federal credit-reporting laws.

Two other credit reporting agencies, Experian and American Recovery Systems,  were sued as well but they settled out of court. It is the largest punitive-damages award ever against Equifax, which would not comment on the case.

At the trial, Williams’ attorneys showed how Equifax repeatedly confused her with someone who had a similar name but whose credit file was rife with bad debt. Williams disputed the errors numerous times but to no avail.  In court her lawyers showed Equifax kept passing along the false information and ultimately ruining her credit.  During that time she was denied student loans, credit-card accounts, ATM cards and other financial applications. After eight years of trying to resolve the issue, she sued the company in 2003.

Of course Equifax will appeal and many in the industry are hoping that appeal will be upheld to perhaps send a message to these companies.  The reality is that many punitive damage awards are reduced on appeal.

There has been a spate of consumer cases against the largest credit-reporting operations in recent years, resulting in hundreds of thousands of dollars in judgments, Evan Hendricks, publisher of Privacy Times, a newsletter that tracks such issues told the Orlando Sentinel. Too often, people have been victimized by the companies' streamlined, automated process of "investigating" alleged credit-file errors, he said. The process is set up to save money and boost profits rather than protect consumers, said Hendricks, an author who testified in the Williams case.

Certainly more cases will arise with the plethora of identity theft and data breaches across the country.    The Federal Trade Commission       last week released a survey showing that 8.3 million American adults, or almost 4% of all American adults, were victims of identity theft in 2005. 

And this week the FTC approved proposed regulations and guidelines to help ensure the accuracy and integrity of information provided to consumer reporting agencies and to allow consumers to directly dispute inaccuracies with financial institutions and other entities that furnish information to consumer reporting agencies. This information is widely used to determine eligibility for credit, employment, insurance, and rental housing.

The U.S. Senate recently  passed a bill that would allow victims of online identity theft schemes to seek restitution from criminals and expands the definition of cyberextortion.

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