Law School Case Brief
Sarver v. Experian Info. Sols. - 390 F.3d 969 (7th Cir. 2004)
To state a claim under the Fair Credit Reporting Act (FCRA), a consumer must sufficiently allege that a credit reporting agency prepared a report containing inaccurate information. However, the credit reporting agency is not automatically liable even if the consumer proves that it prepared an inaccurate credit report because the FCRA does not make reporting agencies strictly liable for all inaccuracies. A credit reporting agency is not liable under the FCRA if it followed reasonable procedures to assure maximum possible accuracy, but nonetheless reported inaccurate information in the consumer's credit report.
Experian Information Solutions, Inc. (Experian) reported inaccurate information on Lloyd Sarver's credit report, which on August 2, 2002, caused the Monogram Bank of Georgia to deny him credit. Monogram cited the Experian credit report, and particularly, a reference to a bankruptcy that had appeared on the report. Both before and after Monogram denied him credit, Sarver asked for a copy of his credit report. He received copies both times and both reports showed that accounts with Cross Country Bank were listed as having been "involved in bankruptcy." No other accounts had that notation, although other accounts had significant problems. A Bank One installment account had a balance past due 180 days, and another company, Providian, had written off $3,099 on a revolving account. On August 29, 2002, Sarver wrote Experian informing it that the bankruptcy notation was inaccurate and asking that it be removed from his report. Sarver provided his full name and address but no other identifying information. On September 11, Experian sent Sarver a letter requesting further information, including his Social Security number, before it could begin an investigation. Sarver did not provide the information, but instead filed the present lawsuit, which resulted in summary judgment for Experian. It was later confirmed that the notation on the Cross Country Bank account was inaccurate and, as it turned out, another Lloyd Sarver was the debtor on that account. In this appeal from the judgment dismissing his case, Sarver claimed that the summary judgment was improper because issues of fact exist as to whether Experian violated §§ 1681i and 1681e(b) of the Fair Credit Reporting Act (FCRA), 15 U.S.C.S. §§ 1681i, 1681e(b).
Was a credit reporting agency liable for damages under the Federal Credit Reporting Act for inaccuracies in a debtor's credit report?
The court held that it was not necessary to decide whether Sarver’s failure to provide the information requested rendered his complaint frivolous because his 15 U.S.C.S. § 1681i claim failed for a lack of evidence of damages. Sarver’s assertion that he suffered damages when he was denied credit failed because at the time credit was denied, Experian had no notice of any inaccuracies in the report. Experian was not liable under 15 U.S.C.S. § 1681e(b) because the mistake did not render the credit reporting agency's procedures unreasonable. Sarver’s suggestion that anomalies in his credit report should have triggered an investigation was rejected. There was nothing in the record to show that Experian’s procedures were unreasonable.
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