Double Reporting Leads to Denial of Summary Judgment in Illinois FCRA Case

by Joshua Howell, Meagan Mihalko, Stefanie Jackman, David N. Anthony - Consumer Financial Services Law Monitor

An Illinois federal district court recently denied a creditor-defendant’s motion for summary judgment in a Fair Credit Reporting Act (FCRA) case brought by a consumer who questioned why his debt was being reported twice — as both a tradeline with the original creditor and as a tradeline with a third-party collection agency. The court’s opinion in Kyle Fickel vs. Clearwater Credit Union et al. is a warning about the credit reporting issues that can arise when lenders refer or assign debts to collections.

Read more: https://www.consumerfinancialserviceslawmonitor.com/2023/03/double-reporting-leads-to-denial-of-summary-judgment-in-illinois-fcra-case/

How companies can manage the risks in handling alternative credit databy

by Joseph Cioffi, Nicole Serratore - Reuters

July 27, 2022 - Is a consumer with a FICO score below 620 actually a greater risk? How would you know? Evidence suggests originators can no longer rely solely on FICO scores to identify subprime borrowers or those with weaker credit prospects.

Alternative data, such as bank account/cash flow, rental payment history, professional licensing or education information, along with machine learning and artificial intelligence, are available to help gauge credit risk more accurately. But the use of alternative data carries particular legal risks. As credit performance softens across markets, and, in particular, for non-prime auto loans, non-compliance with law in the origination process could become the basis of claims by investors and other parties, if they start to incur losses.

Read more: https://www.reuters.com/legal/transactional/how-companies-can-manage-risks-handling-alternative-credit-data-2022-07-27/

Illinois, New York City, And Philadelphia Revise Background Screening Laws

by Alonzo Martinez - Forbes

Lawmakers in three jurisdictions recently passed legislation that impacts employers’ screening programs. Laws restricting consideration of an individual's criminal history have advanced in Illinois, New York City, and Philadelphia; additionally, Philadelphia's law concerning the use of credit history in employment decisions was recently amended.

Read more: https://www.forbes.com/sites/alonzomartinez/2021/02/05/illinois-new-york-city-and-philadelphia-revise-background-screening-laws/?sh=68f9e44c41cc

COVID-19: Credit Reporting in the Age of COVID-19

by Brian M. Forbes and Robert W. Sparkes, III - National Law Review

The CARES Act’s Impact on Furnisher Liability Under the Fair Credit Reporting Act

As part of the federal government’s efforts to provide relief from the economic impact of the COVID-19 pandemic to consumers, Congress took aim at financial services companies that provide consumer account information to credit reporting agencies (CRAs). The reporting activities of those companies, which are known as “furnishers” and include, among others, creditors, mortgage loan servicers and credit card account servicers, are governed by the Fair Credit Reporting Act (FCRA). [1] The Coronavirus Aid, Relief, and Economic Security (CARES) Act, [2] enacted on March 27, 2020, expressly amends FCRA and alters the duties of furnishers when reporting the status of accounts provided with COVID-19-related payment relief. [3] Despite the potential exposure carried by a violation of FCRA generally—either through private civil litigation, most notably class actions, or government enforcement—key defenses remain in place for furnishers to mitigate FCRA liability.

Read more: https://www.natlawreview.com/article/covid-19-credit-reporting-age-covid-19

House Passes Bill Restricting Employer Credit Checks

by Nancy L. Gunzenhauser Popper and Amanda M. Gomez - The National Law Review

On January 29, 2020, the House of Representatives passed the Comprehensive CREDIT Act of 2020 (the “Act”), which would change federal laws pertaining to consumer reporting agencies and credit checks in a number of ways. Significantly for employers, the Act includes an amendment (originally H.R. 3614 – “Restricting Credit Checks for Employment Decisions Act”) to the Fair Credit Reporting Act (“FCRA”), which would restrict the use of credit information for most employment decisions.

Read more: https://www.natlawreview.com/article/house-passes-bill-restricting-employer-credit-checks

Jury awards $101,000 to Portland man who sued Wells Fargo for not fixing credit report due to ID theft

by Maxine Bernstein - The Oregonian/OregonLive

An identity thief opened a Wells Fargo car loan account in the name of Matthew Sponer, bought a BMW at a used car dealership in Southern California in July 2016, was caught that fall and convicted several months later.

Despite repeated attempts by Sponer and his lawyer to get his bank to delete the $29,000 debt that his credit report showed he owed for the car loan, Wells Fargo didn’t do it for 14 months. They finally followed through after Sponer sued the bank.

The delay came despite a detective confirming to the bank the identity theft, the thief’s guilty plea and sentencing, the bank’s receipt of a police report and Sponer’s credit card statements that showed he was out of the country when the car was purchased.

On Tuesday, a federal jury awarded Sponer $101,000 in noneconomic damages, finding Wells Fargo Bank negligently and willfully violated the Fair Credit Reporting Act. But the eight-member jury didn’t issue any punitive damages.

Jurors deliberated for about six hours after a four-day federal court trial in Portland.

“A consumer should not have to sue a bank like Wells Fargo to get it to do what the law requires,’’ Sponer’s lawyer, Robert S. Sola, said during his closing argument. “They ignored all the information in their own record.’’

Read more: https://www.oregonlive.com/crime/2019/09/jury-awards-101000-to-portland-man-who-sued-wells-fargo-for-not-fixing-credit-report-due-to-id-theft.html