CRA Class Action Lawsuit - $500 for reporting incorrect bankruptcy?

It's nice to see some attorney's "get it".

http://www.accessatlanta.com/ajc/business/1202/16credit.html

Great! There are so many people with those "bankruptcy" accounts while they never filed.

Let's suppose that you're looking at an Equifax report. The "Whose Acct" field shows C (that you are a co-signor) and the account shows as "Included in Bankruptcy."

Is this information inaccurate?
Will this information wreck your FICO score?
How should the account be reported?

The account should be reported as "paid as agreed."

This practice of reporting those bankruptcies on non-filers' reports causes tremendous damages, an example is in the article.

"It is believed that under the settlement, consumers would have a choice of accepting $500 to make up for the mistake ..."

They should have to pay $500 for each "mistake" - statutory.


From http://www.wokr13.tv/business/story.aspx?content_id=B6B0DED9-DB6A-44A3-A42C-3463C7D27F32

Experian Proposes Credit-Reporting Deal

Jan. 18--One of the largest companies that tracks the bill-paying habits of Americans has agreed to change how it reports key information, according to attorneys and others familiar with the negotiations.

The move by Experian would reduce interest rates that millions of consumers pay on loans. It also could save them money on insurance, which is sometimes priced based on credit scores.

The proposal would settle Experian's part of a class-action lawsuit that includes TransUnion and Atlanta-based Equifax as defendants.

The suit challenged the accuracy of credit reports involving bankruptcies. It charged that credit reports sold by the companies carried bankruptcy notations for consumers who had not filed for bankruptcy, but who had co-signed a loan or held a joint account with someone who did.

Franklin Clark, the lead plaintiff, was unable to buy a car because of the notation, even though it was his son-in-law, not he, who filed for bankruptcy. Clark could not be reached Friday.

Experian agreed to remove the bankruptcy designation from the credit records of about 1.6 million consumers, and not to use it again, attorneys and others close to the negotiations said Friday.

"This is good," said Richard Le Febvre, an expert witness for the plaintiffs. "It would be better if it had never happened. Experian has agreed to correct it, which is a good step," said Le Febvre, who owns a credit-reporting company in Flagstaff, Ariz.

Experian confirmed only that a settlement was submitted Friday to U.S. District Judge Margaret Seymour in Columbia. It could be accepted, rejected or modified by the judge. She did not specify when she will rule.

Most class-action lawsuits are settled, according to legal experts. That's because of the possibility of large jury awards. The three companies named in the South Carolina case said they each could face damages of up to $1.6 billion if they lost.

But the fact Experian and the plaintiffs reached an agreement does not necessarily foreshadow what Equifax and TransUnion will do, said Paul Milich, a law professor at Georgia State University.

Neither Equifax nor TransUnion would comment Friday on the proposal, which is believed to include no cash payments for the plaintiffs.

"I don't think that indicates a tremendous amount of strength," said Milich. "It's a rather accommodating settlement from a defense perspective."

However, there is a process to compensate consumers if a bankruptcy notation reappears by mistake. It is believed that under the settlement, consumers would have a choice of accepting $500 to make up for the mistake, attempting to win a larger amount in mediation or filing a lawsuit in federal court.

If Seymour accepts the settlement as proposed, then consumers who qualify for the class-action suit would be notified automatically by mail. That probably would occur within 90 days of a settlement being approved.

Consumers would have time after that 90 days to decide whether to accept the deal or sue on their own.

In any case, removal of a bankruptcy designation would have a major impact on those consumers.

"It will increase (their credit ratings) significantly," said Le Febvre.

Photo Copyright Getty Images

Copyright 2003, The Atlanta Journal-Constitution. Distributed by Knight Ridder/Tribune Business News.