You open up your credit report and it says you have a bad debt but you know it isn’t true. How common is that?
“It’s incredibly common,” says Pete Barry, a Minneapolis consumer rights lawyer. “It is very rare for me to sit down with a client and pull their credit report and find that everything is accurate.”
The consequences can be severe. Witness the case of Cruz Johnson of Coon Rapids, who found he had a bad credit rating because of a false report that he had failed to pay an AT&T bill.
Blocked from obtaining a home mortgage, Cruz, 45, suffered “extreme frustration, anger and anxiety to the point that he could not sleep,” said his daughter, Shelby Johnson, in court documents. He had wild mood swings accompanied by “outbursts with yelling and even fits of crying” and was “obsessed with the AT&T bill.”
U.S. District Judge Richard Kyle concluded this month that “there is sufficient evidence from which a reasonable jury could find actionable emotional distress,” entitling Johnson to damages under the Fair Credit Reporting Act.
Kyle denied a motion to dismiss the case, filed by Collecto Inc., a collections firm, doing business as EOS CCA. In its brief, Collecto said it tried to delete the false information, and blamed the problem on Equifax, the credit agency.
When Johnson learned of the false credit report, he contacted AT&T, which informed EOS that the account was deactivated and closed and should be deleted. It wasn’t. Because of “mixed signals” involving EOS and a company it controls in India, Equifax did not delete it, Kyle wrote.
Johnson’s attorney, Thomas J. Lyons, said he’s had hundreds of clients who have felt despair over inaccurate credit reports. “They truly feel like David vs. Goliath,” he says. “In a lot of cases they feel their voices are not being heard.”
Attorney Barry has some stern advice: “Consumers need to be very proactive and take control of their credit cards, so they don’t get ensnared,” he says. “They should be checking monthly or quarterly.”