Failure to Timely Remedy Identity Theft Costs
Equifax $150,000 for Violation of Fair Credit Reporting Act
The U.S. Court of Appeals for the Fourth Circuit issued an important decision on December 27, 2007 involving improper conduct by a credit reporting company. The case, Sloane v. Equifax Information Services LLC (No, 06-2044), concerns violation of the Fair Credit Reporting Act (FCRA); 15 U.S.C.A. § 1681 et seq. (West 1998 & Supp. 2007).
As our economy flirts with recession, increasing numbers of Americans face declining credit scores, identity theft, foreclosure and bankruptcy. In this environment, Sloane is an FCRA roadmap for recovering damages from improper credit reporting, failure to correct errors in a timely manner, and emotional distress.
In upholding an award of $150,000.00 in damages to Sloane, the Court of Appeals offers a compelling comment on how identity theft has blindsided the credit reporting industry and ravaged consumers:
The recent emergence of identity theft and the rapid growth of the credit-reporting industry present a unique dilemma without clear precedent. When Congress enacted the FCRA in 1970, it recognized the vital role that credit reporting agencies had assumed within the burgeoning culture of American consumerism. … Since the mid-1980s, the introduction of computerized information technology and data warehousing has led to the national consolidation of the credit-reporting industry into the "Big Three" — Equifax, Experian, and Trans Union — and rendered credit reporting an integral part of our most ordinary consumer transactions. According to recent data, each of these national credit reporting agencies has perhaps 1.5 billion credit accounts held by approximately 190 million individuals. … Each receives more than two billion items of information every month, and together these three agencies issue approximately two million consumer credit reports each day.
Against this backdrop, identity theft has emerged over the last decade as one of the fastest growing white-collar crimes in the United States. While earlier estimates placed identity theft at between 500,000 to 700,000 individuals per year, more recent random victimization surveys conducted by Synovate for the Federal Trade Commission estimate that, between 1998 and 2003, approximately 27.3 million adults discovered they were the victims of identity theft, with 9.91 million adults discovering they were victims in 2003 alone.
Sloane v. Equifax Information Services LLC, No. 06-2044 at 13-14 (4th Cir. 2007) [Citations omitted].