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Stewart v. Equifax Information Services, LLC

United States District Court, D. Kansas

March 2, 2018



          Daniel D. Crabtree United States District Judge.

         Plaintiff Lucretia Stewart brings this lawsuit against defendants Equifax Information Services, LLC (“Equifax”) and Credit One Bank, N.A. (“Credit One”), alleging that defendants violated the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681 et seq. All parties have filed motions for summary judgment. Plaintiff has filed Motions for Partial Summary Judgment against defendant Credit One (Doc. 66) and defendant Equifax (Doc. 68). Both motions seek summary judgment in plaintiff's favor on defendants' liability on her FCRA claims. Defendant Equifax has filed a Motion for Summary Judgment (Doc. 61), as has defendant Credit One (Doc. 64). Defendants' motions seek summary judgment against plaintiff's FCRA claims.

         After considering the parties' arguments, the court concludes that the summary judgment facts, even when viewed in plaintiff's favor, establish no genuine issue whether defendants violated the FCRA. The court thus grants defendants' summary judgment motions and denies plaintiff's motions seeking partial summary judgment.

         I. Uncontroverted Facts

         The following facts are either stipulated facts taken from the Pretrial Order (Doc. 71), uncontroverted, or, where controverted, stated in the light most favorable to the party opposing summary judgment. Scott v. Harris, 550 U.S. 372, 378 (2007).

         The Parties

         Defendant Credit One is a national bank engaged in the business of extending consumer credit in the State of Kansas and elsewhere. Credit One also is a furnisher of consumer credit information. Defendant Equifax is a limited liability company and a consumer reporting agency. Equifax is engaged in the business of credit reporting in the State of Kansas.

         Equifax's Business, Policies, and Procedures

         In its business, Equifax gathers information about consumers from various sources, including banks, collection agencies, and court records. It then uses that information to create credit files for more than 200 million consumers in the United States. Equifax uses those files to prepare consumer reports that its subscribers can purchase and use to evaluate the consumer's potential credit risk as well as other permissible purposes.

         Equifax accepts credit information from sources who it has determined are reasonably reliable based upon Equifax's own investigation, the source's reputation in the community, or Equifax's longstanding business relationships with the source. When Equifax receives a request from a company to become a data furnisher, it generally conducts an investigation to ensure that the company is reliable. Equifax typically requires each company to complete a detailed application and sign a subscriber agreement. The subscriber agreement requires the company to certify that it will acquire consumer reports only for permissible purposes under the FCRA and that it otherwise will comply with all FCRA requirements. They include the requirement that the data furnisher investigate consumer disputes. The subscriber agreement also requires data furnishers to supply only accurate, up-to-date information.

         After Equifax receives an application, subscriber agreement, and valid business license, Equifax's new-accounts department conducts an investigation of the company. This investigation may include an onsite visit to determine the company's legitimacy and reliability.

         Data furnishers provide consumer credit information to Equifax in a standardized electronic format. After receiving this data, Equifax conducts a series of computerized quality checks before it adds that data to its consumer database. These checks are designed to determine whether the data is in the proper format and whether the data as a whole deviates from expected norms (based on past experience with that particular source).

         Plaintiff's Ex-Husband Opens a Credit One Account

         Plaintiff resides in Kansas. In 2005, plaintiff divorced her husband. Although they had divorced, plaintiff's ex-husband lived with her for some time during 2013, because he recently had been released from jail and was facing financial issues. Around the end of September 2015, plaintiff's ex-husband moved out of plaintiff's home after she asked him to leave.

         In January 2016, plaintiff's ex-husband opened a Credit One credit card account (“the Account”). The credit application for this Account states that the applicant is plaintiff's ex-husband, lists an address that is plaintiff's address, and adds plaintiff as an authorized user. The application also provides plaintiff's date of birth and it states that she, as an authorized user, is the applicant's current spouse. Plaintiff testified that she did not know that her ex-husband had applied for the card and identified her as an authorized user.

         Plaintiff's ex-husband defaulted on his obligation for the credit card, and the Account became delinquent. Credit One made a report to Equifax that the Account was delinquent, and identified plaintiff as an “authorized user” on the Account. After Credit One made the report to Equifax, the account appeared in the “Adverse Accounts” section of plaintiff's Equifax credit report. It was her only Adverse Account. Also, Equifax's credit file for plaintiff shows her status for the Account as: “Account Owner: Authorized User.”

         Plaintiff testified that she first learned that she was identified as an authorized user on the Account when she checked her credit score and noticed that it had declined. But plaintiff has produced no documents showing that her credit score ever declined. Instead, the summary judgment record contains several records showing that plaintiff's credit score never declined during the relevant time period. Also, plaintiff agrees that authorized users are not responsible to make payment on balances due.

         On June 30, 2016, plaintiff submitted an online dispute about the Account to nonparty Trans Union LLC. In response to plaintiff's online dispute, Trans Union deleted the Account from her Trans Union credit report.

         That same day, plaintiff submitted an online dispute of the Account to Equifax. Plaintiff identified the “dispute code” on the “Automated Credit Dispute Verification” (“ACDV”) form as “001.” The dispute code “001” means “not his account/her account.” Doc. 75-1 at 1. The ACDV form offers many different dispute codes for consumers to choose to explain the nature of the dispute. There are separate dispute codes for identity theft (003) and fraud (004).

         The exact words that plaintiff used to describe her dispute were transcribed into the FCRA relevant information field on the ACDV form. Plaintiff described her dispute in this fashion:


Id. Plaintiff submitted no documents to support her dispute. Plaintiff also did not use the phrase “authorized user” in her dispute. Plaintiff never explained to Equifax that her concern was that the Account listed her as an authorized user. And plaintiff never identified her ex-husband as the Account holder who had designated her as an authorized user without her permission.

         Equifax's Procedures For Reinvestigating Consumer Disputes

         Equifax maintains detailed policies and procedures designed to assure that it conducts reasonable reinvestigations of information that consumers dispute as inaccurate. Equifax has adopted several different, furnisher-specific procedures for authorized users to use when they dispute ownership of an account. Equifax has no furnisher-specific procedure for a report by a Credit One authorized user account who disputes ownership of the account.

         Equifax provides three different avenues for a consumer to dispute information contained on an Equifax credit report. Those three avenues are: (1) telephone dispute; (2) written and mailed dispute; and (3) online disputes received through an Internet portal on Equifax's website. When Equifax receives a dispute, it locates the consumer's credit file and opens an Automated Consumer Interview System (“ACIS”) case that tracks the reinvestigation's process. Equifax then reviews and considers all relevant information (including documentation, if any, provided by the consumer) and reviews the contents of the consumer's credit file. If further investigation is required, Equifax notifies the source of the account information (the “data furnisher”) about the consumer's dispute, identifies the nature of the consumer's dispute, and includes the consumer's account information as it then appears in Equifax's credit file.

         When Equifax receives a consumer dispute by phone or mail, a person charged with ensuring that the dispute is accurately categorized and coded reviews the dispute. But when Equifax receives a dispute through its website via its online dispute portal, no one reviews the submission. When a consumer submits a dispute to Equifax through its website via its online dispute portal, the consumer codes the dispute according to the consumer's perception of the alleged inaccuracy. No one at Equifax reviews the coding chosen by consumers to describe disputes when submitted through Equifax's website via its online dispute portal. Instead, an automated process accepts the information the consumer provides and sends it to the data furnisher.

         Equifax generally makes these communications to data furnishers by transmitting the ACDV form. If the consumer provides PDF documents to support a dispute, Equifax also includes the documents with the ACDV form that it provides to the furnisher. When the data furnisher receives the dispute from Equifax, it generally is required, both by its contract with Equifax and by the FCRA, to conduct its own investigation and report the results back to Equifax. If the data furnisher advises Equifax to delete or otherwise update the account information, then Equifax takes the necessary action and notifies the consumer. After the reinvestigation is completed, Equifax sends the consumer the results along with a summary of the consumer's rights under the FCRA, additional steps the consumer may take, and a description of the procedures used to reinvestigate the dispute.

         At Equifax, the individuals who handle consumer disputes must complete training. This process includes training about Equifax's reinvestigation policies and procedures. The individuals first must participate in classroom instruction. After completing the classroom instruction, Equifax requires each participant to pass a competency test. If the participant achieves a passing grade, Equifax provides more on-the-job training.

         Credit One's Procedures For Investigating Consumer Disputes

         When Credit One receives a consumer dispute from a credit reporting agency, it is obligated to investigate “reasonably” how the information it is providing should appear. So, Credit One employs extensive procedures for handling ACDV disputes. Credit One has as many as 150 employees who handle ACDV disputes. About five to eight of these Credit One employees process ACDV disputes every shift. These employees earn about $15 an hour or an annual salary in the range of $32, 000 to $33, 000.

         Credit One also uses overseas vendors who employ about 200 people working around the clock to investigate ACDV disputes. Although Credit One does not supervise the payroll and timesheets for these employees, it does provide performance feedback, constant communication about quality, and joint training. These vendors also conduct reviews of these employees. In addition to the employees handling ACDV disputes, Credit One also employs fraud investigators as members of its customer service team.

         Credit One processes more than 110, 000 FCRA disputes each month. Credit One spends, on average, about five to six minutes investigating a ACDV dispute. But the amount of time spent investigating a dispute also depends on the nature of the documents provided by the credit reporting agency.

         Equifax and Credit One's Response to Plaintiff's Online Dispute

         Equifax created a ACDV form based on the dispute plaintiff submitted online in June 2016. On July 1, 2016, Equifax sent that ACDV form to Credit One. The ACDV form used the same language that plaintiff had used when she submitted the dispute to Equifax. It also identified the same dispute code that plaintiff had selected.

         On July 2, 2016, Credit One received the ACDV form from Equifax about the Account plaintiff was disputing. After receiving the ACDV form, Credit One began a dispute review process. The review process is not automated; instead, a person reviews the dispute on Credit One's behalf. The reviewer views the ACDV dispute form on one screen while reviewing Credit One's information about the consumer on another screen. After conducting this review, the reviewer inputs Credit One's response into the ACDV form and sends it back to the credit reporting agency who generated the ACDV form.

         In this case, Angela Andreas reviewed plaintiff's dispute. Ms. Andreas is employed by a vendor who contracts with Credit One to investigate ACDV disputes. When Credit One investigates a dispute, it relies on the dispute code selected by the consumer. Plaintiff's selected dispute code of “001” did not correlate to the narrative that she provided on the form.

         On July 4, 2016, Credit One submitted a response to the ACDV to Equifax. Credit One's response to Equifax verified and affirmed its reporting of the Account. Credit One confirmed plaintiff's identification and listed her as an authorized user of the Account. Credit One's July 4, 2016 response concluded its investigation of the dispute. That same day, Equifax provided its reinvestigation results to plaintiff.

         Credit One never investigated plaintiff's dispute for fraud. But when she submitted her dispute, plaintiff never coded her dispute as one involving fraud. Instead, plaintiff had coded the dispute as “not his account/her account.” And plaintiff recited that the Account was not her account so she “can only assume it was opened fraudulently or posted to my bureau in error.” Doc. 75-1 at 1.

         In July 2016, plaintiff called Credit One several times to ask about the reported delinquent Account. Plaintiff first called Credit One on July 7, 2016. After this phone call, Credit One removed plaintiff as an authorized user on the Account. Yet, the Account still appeared on plaintiff's credit report after that date.

         On July 21, 2016, plaintiff again called Credit One. She again asked Credit One to remove her as an authorized user on the Account. During that telephone call, plaintiff asked Credit One for a letter confirming that it had reported the Account inaccurately and that it was removing her as an authorized user.

         In August 2016, Credit One drafted an AUD (“automated universal data”) removing plaintiff as an authorized user on the Account. Credit One was supposed to send the AUD to all three credit bureaus. But mistakenly, it never sent the AUD. On August 24, 2016, plaintiff mailed a letter to Credit One again disputing its report that plaintiff was an authorized user of the Account. Plaintiff's August 24, 2016 letter to Credit One again asserted that she had no knowledge that her ex-husband had made her an authorized user on the Account. On August 26, 2016, Credit One charged off the Account.

         On September 3, 2016, Credit One sent a letter addressed to plaintiff's ex-husband at plaintiff's address. The letter informed plaintiff's ex-husband that Credit One had received a request for account information from plaintiff. The letter recited that Credit One would not release account information to any third party without a signed and notarized power of attorney.

         The Account remained on plaintiff's Equifax credit report until at least March 13, 2017. The Account was identified as the only negative account on plaintiff's Equifax credit report. But Equifax never issued a consumer credit report about plaintiff in the two years before she filed this lawsuit.

         Equifax's records include a single dispute about the Account-the one made by plaintiff. Credit One received no other disputes from plaintiff about the ...

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