Plaintiffs File Claim Against Wells Fargo For Allegedly Violating the FCRA

By The Kim Law Firm, LLC

Last June, a couple filed a claim against Wells Fargo, alleging that the bank reported false information on their credit reports and so violated the Fair Credit Reporting Act (FCRA).  Although Wells Fargo attempted to have the case dismissed, the District Court denied the request.

The Complaint

According to the complaint, in 2015 the plaintiffs discovered that Wells Fargo had reported them late on their line of credit periodically between 2012 and 2015 as a result of a mixed file error. The plaintiffs claimed to have alerted the relevant Credit Reporting Agencies (CRAs) of the discrepancies, but that Wells Fargo failed to provide accurate records of payment allocation to the CRAs after the errors were discovered.

As a result of these failures, the plaintiffs filed a complaint against both Wells Fargo and the CRAs alleging that both entities had violated the FCRA by willfully and negligently failing to:

• Follow reasonable procedures designed to ensure that accurate information was included in their consumer report;
• Correct their error after receiving notice of the inaccurate reports;
• Correct or destroy the incomplete information in the plaintiffs’ file after the completion of the investigation;
• Conduct an adequate investigation into the plaintiffs’ complaints; and
• Implement corrective actions at the conclusion of the investigation.

The plaintiffs argued that as a result of Wells Fargo’s actions, they had suffered actual damage, pain and suffering, and punitive damages. In response, Wells Fargo submitted a motion to dismiss the charges and the request for damages.

The Court’s Opinion

In its opinion, the court reiterated that Congress enacted the FCRA to counteract inaccurate reporting practices. For this reason, as well as the fact that the plaintiffs provided sufficient facts to support a claim that they were entitled to relief, the judge stated that the plaintiffs’ claims were valid under both federal and California credit reporting laws.

However, the court also decided that the plaintiffs’ allegations of actual injury were too vague and needed to be supported by more specific claims, such as:

• A reduction in a line of credit;
• A lost job opportunity;
• Loss of wages;
• Damage to the plaintiffs’ credit reputation; and
• A higher interest rate on at least one credit card.

The judge also asked the plaintiffs to support their claim for pain and suffering with more specific evidence of genuine injury, such as physical injury or emotional distress, which in turn could be demonstrated by claims of:

• Sleep loss;
• Nervousness or anxiety;
• Frustration; and
• Mental anguish.

The judge also stated that, contrary to the arguments of Wells Fargo, the plaintiffs were eligible to receive punitive damages if evidence revealed a willful violation of the law. The court further   declared that the plaintiffs were not required to prove malice, fraud, or oppression on the company’s behalf in order to collect punitive damages. Instead, a jury would decide the issue of whether punitive damages were justified by evaluating whether the defendant acted recklessly.

What this case means for your own claim

The willfulness question the court addressed in this case is the one that decides value in every FCRA claim: a negligent violation recovers what you lost; a willful one adds statutory damages of $100 to $1,000 per violation and allows punitive damages. Willfulness is proved from the company’s own conduct and records, which is why the file matters — the report before the dispute, the written dispute and what you attached, the delivery receipt, the result, the report afterward, and every denial that followed. An FCRA claim must be filed within two years of the day you discovered the violation, and never more than five years after it happened. I review the file at no cost and bring these cases on contingency: you pay nothing unless we win.

Admitted in Pennsylvania and New Jersey; available to appear pro hac vice in other federal courts.

Sources: the complaint and opinion in the case discussed above; Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007); 15 U.S.C. §§ 1681n, 1681o and 1681p (United States Code).