• Summary Judgment Granted Where Consumer Could Not Show Actual Damages or Willful Noncompliance
  • May 4, 2009
  • Law Firm: Strasburger & Price, LLP - Dallas Office
  • Konter v. CSC Credit Servs., 2009 U.S. Dist. LEXIS 28711 (W.D. Wis.Apr. 6, 2009)

    Facts: Defendant confused Plaintiff’s identity with that of his twin sister. Plaintiff made several disputes with Defendant before all of the erroneous information was finally removed from Plaintiff’s consumer report. Plaintiff claimed that Defendant CSC Credit Services negligently and willfully violated the Fair Credit Reporting Act (“FCRA”) by failing to properly investigate and remove errors on Plaintiff's credit report that caused Plaintiff humiliation and severe emotional distress. Defendant filed its Motion for Summary Judgment, which the Court granted as to Plaintiff’s negligence claim on the basis that Plaintiff failed to present sufficient evidence of actual damages and also granted summary judgment as to Plaintiff’s willfulness claim because no reasonable jury could find that defendant acted in willful noncompliance with the FCRA.

    Credit Reporting Agency. The FCRA imposes a duty on credit reporting agencies to ensure the accuracy of a consumer's credit report. This duty exists whenever a credit report is issued, § 1681e(b), and whenever a consumer disputes an item in his or her credit report, § 1681i(a).

    • Damages. Under § 1681o, if a credit reporting agency negligently violates any duty imposed by the statute, a plaintiff may collect "actual damages," costs and fees. Under § 1681n, if the violation is willful, statutory and punitive damages are available without proof of actual damages.
    • Damages. Before any discussion of the reasonableness of a reinvestigation is necessary, a plaintiff must show that he has suffered damages as a result of the inaccurate information.
    • Damages. Actual damages include, but are not limited to, the denial of credit or receiving a higher interest rate as a result of an inaccurate credit report, out-of-pocket losses, damage to character, and mental distress.
    • Damages. Plaintiff produced no evidence that he was denied credit or received higher interest rates as a result of the inaccurate credit report.  Plaintiff claimed only that it was possible he paid higher interest rates as a result of the inaccuracies.  Although Plaintiff alleged in his complaint that he incurred "out-of-pocket" litigation expenses, he failed to state any facts in support of this allegation.  Accordingly, he waived this claim for damages.
    • Damages. Plaintiff’s claim for damages related to a required cell phone deposit fee failed as a matter of law because Plaintiff did not show that the decision was based upon Defendant’s credit report and it occurred prior to Plaintiff having filed any dispute with Defendant.
    • Emotional Distress. A defendant cannot be held liable for the embarrassment a party suffers as a result of others learning of the derogatory information unless that defendant is responsible for their finding out.
    • Emotional Distress. With respect to Plaintiff's claims for damages for humiliation and emotional distress,Plaintiff offered no proof that Defendant transmitted the embarrassing information to third parties.  Instead, it was Plaintiff who told other people about his problems.  As a matter of law, Plaintiff could not recover for the humiliation he allegedly suffered.
    • Emotional Distress. With respect to the other emotional distress Plaintiff suffered, he was required to do more than declare in conclusory fashion that he was embarrassed and humiliated but instead, he was required to explain his injury in reasonable detail.  A plaintiff must submit evidence that reasonably and sufficiently explains the circumstance of his injury and does not resort to mere conclusory statements.
    • Emotional Distress. Plaintiff’s deposition testimony that, while he was dealing with his credit problems, he fought more frequently with his wife, which had a negative effect upon his marriage, and he suffered from loss of sleep, and affidavits from Plaintiff’s family members that averred Plaintiff suffered during this time from increased irritability, anger and depression failed to provide a direct link between the inaccurate information on Defendant's credit report and Plaintiff’s emotional distress.  All of the evidence referred to Plaintiff's "credit problems" with the "credit reporting agencies" and the "credit bureaus." It was unclear from the evidence whether Plaintiff's family was referring to problems for which Defendant was responsible or problems for which the other credit reporting agencies were responsible.
    • Emotional Distress. Plaintiff’s evidence regarding his emotional distress did not include evidence that the inaccurate information stopped him from attempting to secure a loan or credit or caused him fear that he would be rejected for a loan for which he applied or that he was concerned about losing a mortgage, a loan or any other form of credit because of the ongoing dispute.
    • Emotional Distress. Broad and conclusory statements by the Plaintiff of his emotional distress is insufficient to establish actual damages for purposes of alleging an FCRA claim.
    • Punitive Damages. Section 1681n provides statutory damages of not less than $100 and not more than $1,000 when violations are willful. To show willful noncompliance, a plaintiff must show that the defendant knowingly and intentionally committed an act in conscious disregard for the rights of others.  Willful violations of the FCRA include intentional concealments or misrepresentations and reckless violations.  
    • Punitive Damages. Although Plaintiff alleged Defendant’s failure to forward all information supplied to it by Plaintiff constituted a willful violation, the FCRA does not require a credit reporting agency to forward "all" information provided by the consumer, only "all relevant information." § 1681i(a)(2)(A).  It is not unreasonable for Defendant to read the statute as not requiring it to include irrelevant material, which in its view included Plaintiff's information about his twin sister.  At worst, Defendant's reading was careless and its violation negligent.  It cannot be characterized as reckless.
    • Punitive Damages. The mere reappearance of disputed information on a credit report does not make out a claim for willfulness.  To hold Defendant liable for minor errors such as this would be to turn the FCRA into a strict liability statute, which was not Congress's intent.
    • Punitive Damages. The fact that Defendant sent Plaintiff a credit history report with the results of its investigation following each of Plaintiff’s disputes weighed against a finding of willfulness on the part of Defendant.
    • Punitive Damages. At worst, Defendant’s failure to delete erroneous addresses and names from Plaintiff’s consumer report and its failure to keep such information reappearing on Plaintiff’s consumer report was a negligent violation of the FCRA and did not warrant statutory and punitive damages.   
    • Punitive Damages. The FCRA does not affirmatively require credit reporting agencies to ensure that files are not mixed unintentionally.  Defendant’s failure to prevent this from occurring cannot be willful noncompliance with the FCRA.  This type of error would not be readily apparent to Defendant.  Only consumers who are checking their credit reports would recognize the errors and report them to the credit reporting agency.  When Plaintiff did this, Defendant began investigating Plaintiff's credit report to resolve the errors.  It fulfilled its basic obligations under the FCRA by investigating, and there was no willful violation.