A federal court jury in California found in a trial last month that TransUnion violated the Fair Credit Reporting Act (FCRA) when it conflated a class of consumers with similarly named terrorists and criminals from a government watch list. The jury awarded statutory and punitive damages in excess of $60 million. The Plaintiffs’ lawyers say this is the largest FCRA verdict to date.
TransUnion LLC’s credit reports checked consumers against the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) database, which lists terrorists, drug traffickers and other criminals. But the suit alleged that reports about law-abiding consumers were sometimes linked to similarly named criminals on the OFAC watch list.
After a weeklong trial, the jury found that TransUnion willfully failed to assure the maximum accuracy for its results, to notify class members of their OFAC results in written disclosures, and to provide them with notice of their FCRA rights. The 8,185 class members profiled by TransUnion will each get $984 in statutory damages and $6,353 in punitive damages, bringing the total award to $8 million in statutory damages and $52 million in punitive damages.
John Soumilas of Francis & Mailman PC told Law360 the award was “the highest verdict in the history of the FCRA.” “The jury understood that the technology was available to deliver accurate results in credit reporting and that the failures of TransUnion to ensure accuracy showed willful noncompliance with the FCRA,” he added.
Class counsel Carol M. Brewer, a lawyer with Anderson Ogilvie & Brewer LLP, agreed. She pointed out that the compensatory damages are limited under the FCRA to $1,000, and that “we think they were trying to send a message” with the punitive damages.
The suit, filed in February 2012, alleges lead Plaintiff Sergio L. Ramirez was prevented from buying a car in 2011 because TransUnion told lenders he potentially matched two entries on the OFAC list. Ramirez said that when he tried to get off of TransUnion’s list, the company’s customer service agents gave him “the runaround” and didn’t explain how the error could be corrected.
At trial, TransUnion argued Ramirez’s experience occurred because a credit report produced by TransUnion was “garbled” after it was transferred between multiple financial entities before ending up at the auto dealer. The company also noted consumers weren’t financially harmed by the mix up.
The class argued that TransUnion didn’t ensure accuracy, as required by the FCRA, by cross-checking OFAC name hits with other results, such as date of birth. It also alleged TransUnion kept the OFAC results from the consumers themselves and only disclosed potential matches to the companies requesting the credit checks.
Ramirez was represented by Carol M. Brewer and Andrew Ogilvie of Anderson Ogilvie & Brewer LLP and John Soumilas and James Francis of Francis & Mailman PC. The case is Sergio L. Ramirez v. TransUnion LLC (case number 3:12-cv-00632,) in the U.S. District Court for the Northern District of California.
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