Class Action Law Suit Against 700 Credit, LLC

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UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA DIVISION

Jane Doe, on behalf of herself and all others similarly situated,Plaintiff, 

vs.

700 CREDIT, LLC,

Defendant.

 Civil Action No. 

Class Action Complaint for Violations of the Fair Credit Reporting Act

 

Class Action

Demand for Jury Trial

 

I.

Preliminary Statement

  1. Defendant 700 Credit, LLC (“700 Credit”) is regulated as a “consumer reporting agency” (“CRA”) and “reseller” of credit information under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §§ 1681-1681x.  Defendant is also similarly regulated as a “consumer credit reporting agency” (“CCRA”) under the California Consumer Credit Reporting Agencies Act (“CCRAA”), Cal. Civ. Code §§ 1785.1-1787.3.   Defendant has been selling credit reports falsely marking Plaintiff – and numerous other American consumers – as “deceased.”  When living consumers learn of this or other inaccuracies on their 700 Credit reports, they have the right to obtain a copy of their entire credit file and to receive specific statutorily-mandated information that would advise them of their rights under the FCRA and CCRAA, including the proper methods for correcting such credit inaccuracies.  Defendant, however, gives consumers the run-around and intentionally deprives them of these disclosures.  Defendant fails to disclose to consumers all information in their file that it assembled and sold about them; it fails to follow procedures that assure maximum possible accuracy in preparing credit reports; it fails to obtain a permissible purpose certification prior to selling reports for consumers such as Plaintiff; it fails to provide consumers with their rights under the FCRA and CCRAA; it misleads consumers about their right to have inaccurate information corrected; and it imposes improper barriers for consumers seeking to correct errors on their 700 Credit reports.  This lawsuit seeks to redress Defendant’s widespread and reckless non-compliance with the FCRA and CCRAA.  As the same reality experienced by plaintiff confronts the many other consumers she seeks to represent, Plaintiff respectfully submits that the legality of Defendant’s practices under the FCRA and CCRAA, can be, and should be, adjudicated on a class-wide basis.

II. Jurisdiction and Venue

  1. Jurisdiction of this Court arises under 15 U.S.C. § 1681p and 28 U.S.C. § 1331.
  2. Venue lies properly in this district pursuant to 28 U.S.C. § 1391(b).

III. Parties

  1. Plaintiff is a living adult individual who resides in California.
  2. Defendant 700 Credit, LLC (“700 Credit”) is a business entity which regularly conducts business in the Central District of California, and which has a principal place of business in Torrance, California.
  3. A. Defendant’s Credit Reporting Practices
  4. Defendant is regulated as a “consumer reporting agency” (“CRA”) and “reseller” under the FCRA.  15 U.S.C. § 1681a(e); 1681(u) (reseller is CRA).   Defendant is also similarly regulated as a “consumer credit reporting agency” (“CCRA”) under the California Consumer Credit Reporting Agencies Act (“CCRAA”).  Cal. Civ. Code § 1785.3(d).
  5. Defendant assembles and sells tens of thousands of consumer credit reports to car dealerships and others in the automotive industry, often called “credit reports” (“reports” herein).  15 U.S.C. § 1681a(e); Cal. Civ. Code § 1785.3(c).
  6. Pursuant to the FCRA and CCRAA, Defendant must follow procedures which assure that the reports it sells meet the standard of “maximum possible accuracy.”   15 U.S.C. § 1681e(b); Cal. Civ. Code § 1785.14(b).
  7. Pursuant to the FCRA and CCRAA, Defendant must maintain reasonable procedures to assure that reports are sold only for legitimate “permissible purposes.”  15 U.S.C. §§ 1681e(a) & 1681b; Cal. Civ. Code § 1785.14(a).
  8. Defendant places a “deceased” notation or marking on reports when it is advised from any of its data sources, including other CRAs, that a given consumer is deceased.
  9. Defendant does not request or require a death certificate from any of its data sources which advise that a consumer is “deceased” before placing a “deceased” mark on that consumer’s report.
  10. Defendant does not request or require any proof from any data source which advises that a consumer is “deceased” showing that the consumer is, in fact, deceased before placing a “deceased” mark on that consumer’s report.
  11. Defendant does not independently verify with any source that a consumer is, in fact, deceased before placing a “deceased” mark on that consumer’s report.
  12. A deceased notation is a very unusual marking upon a credit report.
  13. Like any other person or business with an Internet connection, Defendant has easy access to the “Death Master File” created by the Social Security Administration, listing those consumers that the government believes to be truly deceased.
  14. Before selling reports with a “deceased” notation or mark on them, Defendant does not cross-reference the information received from its data sources with the Master Death File in order to determine whether any given consumer reported as deceased via a data source is also on the government’s Death Master File before selling a credit report about said consumer.
  15. Indeed, Defendant employs no procedures at all which assure that a consumer with a “deceased” mark on his/her report is, in fact, deceased before placing the “deceased” mark on that consumer’s report and selling that report.
  16. Even in instances where other data on the face of the consumer’s report indicates that he/she is not deceased, Defendant employs no procedures which assure that a consumer with a “deceased” mark on his/her report is, in fact, deceased before placing the “deceased” mark on that consumer’s report.
  17. Defendant knows that living consumers are turned down for credit specifically because Defendant is reporting them as “deceased.”
  18. Defendant knows that numerous consumers are erroneously marked as “deceased” on their credit reports, but said consumers are not on the Death Master File and are, in fact, alive.
  19. Defendant has no independent procedure to change an erroneous deceased status on its own and will merely parrot its data source or sources.
  20. Nor does Defendant employ any procedures to limit or stop the furnishing of reports to third parties for consumers which it has marked as “deceased” under any circumstances.
  21. Defendant charges third parties a fee for reports with a mark that a consumer is deceased (“reports on the deceased”) as it would for any other report.
  22. Defendant profits from the sale of reports on the deceased.
  23. Defendant knows that truly deceased consumers do not apply for credit.
  24. Defendant knows that the credit information and reports of truly deceased persons are used by criminals to commit identity theft or credit fraud.  Indeed, identity theft using the personal identifying information of deceased consumers is known to 700 Credit to be a common and major source of identity theft.
  25. Defendant knows that identity theft and credit fraud are serious and widespread problems in our society.
  26. Defendant sells reports on the deceased to third parties in an automated fashion and without any specific or general certification that could reasonably explain a “permissible purpose” for purchasing or using a (supposedly) deceased consumer’s credit history and/or report.
  27. For consumers who are deceased, there exists no permissible purpose under the FCRA or CCRAA for Defendant to ever sell their credit reports, absent a court order.
  28. Defendant knows that such reports contain a vast amount of personal identifying and credit account information on the supposedly deceased consumer, information that can be used to commit identity theft or for other fraudulent purposes.
  29. Consumers such as Plaintiff who are alive but erroneous marked as “deceased” on Defendant’s credit reports are viewed with suspicion, as potential perpetrators of fraud using a deceased person’s social security number.
  30. The FCRA and CCRAA also provide that consumers, whether they are the victims of inaccurate information on their reports or not, have the right to request and obtain free of charge once every 12 months a complete copy of all information in their credit file with Defendant.  15 U.S.C. § 1681g(a)(1); Cal. Civ. Code §§ 1785.10(a) & (b) and § 1785.15(a)(1).
  31. Defendant intentionally misleads consumers into believing that they cannot obtain a copy of their 700 Credit report.
  32. Defendant advises consumers on its website, http://www.700credit.com, that “If you would like a copy of your credit report, you can contact the national credit bureaus directly,” referring consumers to Trans Union and Experian.
  33. When consumers such as Plaintiff contact 700 Credit directly in order to find out where and how Defendant obtained inaccurate information about them, or for any other reason, Defendant agrees to provide consumers with a copy of their 700 Credit report, which is a different report in both form and content from Trans Union or Experian reports, and which contains different information from that consumer’s Experian and Trans Union reports.
  34. Defendant, however, fails to disclose to consumers all information in their credit file, as required by the FCRA and CCRAA at 15 U.S.C. § 1681g(a)(1) and Cal. Civ. Code §§ 1785.10 and 1785.15.
  35. Moreover, and in violation of 15 U.S.C. § 1681g(c)(2) and Cal. Civ. Code § 1785.10(b), and contrary to the practice of other CRAs and CCRAs, Defendant intentionally, recklessly and as a matter of course fails to provide to consumers the summary of their rights under the FCRA as prepared by the Federal Trade Commission.
  36. Further in violation of 15 U.S.C. § 1681g(c)(2), and contrary to the practice of other CRAs, Defendant intentionally, recklessly and as a matter of course fails to provide to consumers a toll-free telephone number established by the agency, at which personnel are accessible to consumers during normal business hours.
  37. Further in violation of 15 U.S.C. § 1681g(c)(2), and contrary to the practice of other CRAs, Defendant intentionally, recklessly and as a matter of course fails to provide to consumers a list of all federal agencies responsible for enforcing any provision of the FCRA, as well as the address and any appropriate telephone number of each such agency, in a form that will assist the consumer in selecting the appropriate agency.
  38. Further in violation of 15 U.S.C. § 1681g(c)(2), and contrary to the practice of other CRAs, Defendant intentionally, recklessly and as a matter of course fails to provide to consumers a statement that the consumer may have additional rights under state law, and that the consumer may wish to contact a state or local consumer protection agency or a state attorney general (or the equivalent thereof) to learn of those rights.
  39. Further in violation of 15 U.S.C. § 1681g(c)(2), and contrary to the practice of other CRAs, Defendant intentionally, recklessly and as a matter of course fails to provide to consumers a statement that a consumer reporting agency is not required to remove accurate derogatory information from the file of a consumer, unless the information is outdated under section 1681c of this title or cannot be verified.
  40. By depriving consumers of these statutorily mandated rights, including all of the rights provided to California consumers under Cal. Civ. Code §§ 1785.10 and 1785.15, Defendant seeks to save printing costs associated with providing proper and complete FCRA- and CCRAA-mandated disclosures to consumers and, more importantly, the administrative and compliance costs that are associated with correcting errors on credit reports.
  41. Indeed, Defendant’s standard dispute policy is to simply pass on any dispute that it receives from a consumer to the car dealerships to which it sells its reports and to the national credit repositories where it obtains much of its information that goes on its reports.
  42. Defendant states on its website, http://www.700credit.com, that it will not independently reinvestigate consumer disputes of errors, in direct violation of 15 U.S.C. § 1681i and Cal. Civ. Code § 1785.16.
  43. If consumers, such as Plaintiff, seek to dispute inaccurate information with Defendant, Defendant imposes barriers to said disputes that are not existent in the FCRA or CCRAA.
  44. For example, in violation of 15 U.S.C. § 1681i and Cal. Civ. Code § 1785.16, and contrary to the practice of other CRAs and CCRAs, Defendant, intentionally, recklessly and as a matter of course, requires consumers to make a written, signed dispute, on one of its forms, and further to include with their dispute a “photo ID, Social Security card, and/or tax ID card.”
  45. B. The Experience of the Representative Plaintiff
  46. On August 22, 2010, Plaintiff was marked by Defendant as “deceased” on her 700 Credit report sold to the Moss Brothers Chevrolet car dealership.
  47. The 700 Credit report delivered by Defendant to Moss Brothers Chevrolet and any related automobile finance arm or affiliate on or about August 22, 2010 falsely provided that Plaintiff was “reported as deceased.”  As a result, Defendant marked Plaintiff’s report with a “Red Flag Alert.”
  48. Plaintiff is not deceased.
  49. The Social Security Administration does not have Plaintiff marked as deceased on the Death Master File.
  50. In or about early October 2010, Plaintiff sought to identify the source of this error and to dispute the error with Defendant.  Plaintiff specifically made a dispute with Defendant on October 4, 2010 advising, inter alia, “I am reported as dead.  I am not.”
  51. On October 14, 2010, Defendant wrote to Plaintiff that Defendant had “received your dispute in regards to your credit reports reporting you are deceased.”  Defendant, however, did not reinvestigate Plaintiff’s dispute.
  52. Rather, Defendant misinformed Plaintiff that “this is credit report data that has been established by the credit bureaus.  In order to have it removed you will need to contact Experian, Transunion and/or Equifax for them to investigate and correct.”
  53. Defendant represents on its website that among its sources and “partners” are Trans Union and Experian, two of the national CRAs.  Defendant identifies several other “partners,” but Equifax, another national CRA, is not one of them.
  54. Plaintiff obtained her credit report directly from Experian in November 2010.  Plaintiff’s Experian credit report does not identify her as “deceased.”
  55. Plaintiff also obtained her credit report directly from Trans Union in December 2010.  Plaintiff’s Trans Union credit report does not identify her as “deceased.”
  56. On November 29, 2010, Plaintiff requested her 700 Credit report from 700 Credit in a further effort to correct the false “deceased” reporting.
  57. On December 3, 2010, Defendant mailed to Plaintiff two different 700 Credit reports, with different formatting and with different contents (the “December 3rd Reports).
  58. The December 3rd Reports both appeared to be printed on December 3, 2010, from a “Print Preview” screen within a “700 dealer.com” website maintained and controlled by Defendant.
  59. The December 3rd Reports both had Plaintiff “reported as deceased” and further had a “Red Flag Alert” on them.
  60. Plaintiff’s 700 Credit December 3rd Reports also indicated that Plaintiff’s “Input SSN is reported as deceased;” that “high risk business was identified” at Plaintiff’s address; and that there is a “Hit to the Decease Master File.  SSA reports death benefits as being paid to this SSN.”
  61. None of the above-quoted data from the December 3rd Reports appears on either Plaintiff’s Experian report or on her Trans Union report.
  62. Moreover, Plaintiff is not being paid any death benefits.
  63. In addition to these inaccuracies, Plaintiff’s December 3rd Reports also did not identify the names (written in full) of any and all entities to which 700 Credit had sold Plaintiff’s report in the previous one-year period, as required by 15 U.S.C. § 1618g(a)(3)(B) and Cal. Civ. Code § 1785.10.
  64. Further, neither the December 3rd Reports nor the cover letters accompanying them listed a toll-free telephone number for 700 Credit where a consumer may lodge a dispute or any of the other “summary of rights” which must have been provided to Plaintiff pursuant to 15 U.S.C. § 1618g(c)(2) and Cal. Civ. Code §§ 1785.10(d) and 1785.15(a)(4).
  65. Defendant never reinvestigated Plaintiff’s dispute, and never corrected any of the inaccurate information it sold about Plaintiff.
  66. As a result of its actions, Defendant is harming Plaintiff’s ability to use her credit freely, harming Plaintiff’s credit reputation, wasting Plaintiff’s time, misleading Plaintiff, and is thus liable to Plaintiff for statutory and punitive damages.
  67. Further, Defendant is frustrating Plaintiff’s FCRA and CCRAA rights to inspect all information sold about her and correct any inaccuracies as Congress and the California legislature contemplated and without a run-around, and is thus liable to Plaintiff for statutory and punitive damages.
  68. At all times pertinent hereto, Defendant was acting by and through its agents, servants and/or employees who were acting within the course and scope of their agency or employment, and under the direct supervision and control of the Defendant herein.
  69. At all times pertinent hereto, the conduct of the Defendant, as well as that of its agents, servants and/or employees, was intentional, willful, reckless, and in grossly negligent disregard for federal law and the rights of the Plaintiff and the Classes herein.

V. Class Action Allegations

  1. Plaintiff incorporates the foregoing paragraphs as though the same were set forth at length herein.
  2. Plaintiff brings this action on behalf of the following Classes:

(a)              All persons residing in the State of California about whom Defendant sold any consumer credit report marking such person as “deceased,” but who was not marked as deceased on the government’s Master Death File, during the period beginning two (2) years prior to the filing of this Complaint and continuing through the date of the resolution of this case.

(b)             All persons residing in the State of California about whom Defendant sold any consumer credit report during the period beginning two (2) years prior to the filing of this Complaint and continuing through the date of the resolution of this case.

(c)              All persons residing in the State of California to whom Defendant provided a consumer file concerning that person’s own information as assembled by Defendant beginning two (2) years prior to the filing of this Complaint and continuing through the date of the resolution of this case.

(d)             All persons residing in the State of California from whom Defendant received a dispute concerning that person’s own information as assembled by Defendant beginning two (2) years prior to the filing of this Complaint and continuing through the date of the resolution of this case.

  1. The Classes are so numerous that joinder of all members is impracticable.  Although the precise number of Class members is known only to Defendant, Plaintiff avers upon information and belief that the Classes number at least in the thousands.
  2. There are questions of law and fact common to the Classes that predominate over any questions affecting only individual Class members.  The principal questions concern whether the Defendant violated the FCRA and/or CCRAA by failing to follow reasonable procedures in preparing and selling reports with a “deceased” mark on them; whether Defendant makes proper disclosures under the FCRA and CCRAA; and whether Defendant properly reinvestigates consumer disputes.
  3. Plaintiff’s claims are typical of the claims of the Classes, which all arise from the same operative facts and are based on the same legal theories.
  4. Plaintiff will fairly and adequately protect the interests of the Classes.  Plaintiff is committed to vigorously litigating this matter.  Further, Plaintiff has secured counsel experienced in handling consumer class actions.  Neither Plaintiff nor her attorneys has any interests which might cause them not to vigorously pursue this claim.
  5. This action should be maintained as a class action because the prosecution of separate actions by individual members of the Classes would create a risk of inconsistent or varying adjudications with respect to individual members which would establish incompatible standards of conduct for the parties opposing the Classes, as well as a risk of adjudications with respect to individual members which would as a practical matter be dispositive of the interests of other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.
  6. Defendant has acted or refused to act on grounds generally applicable to the Classes.
  7. Whether Defendant violated the FCRA and/or CCRAA can be easily determined by Defendant’s policies and a ministerial inspection of Defendant’s business records.
  8. A class action is a superior method for the fair and efficient adjudication of this controversy.  Management of the Classes’ claims is likely to present significantly fewer difficulties than those presented in some individual claims.
  9. The identities of the Class members may be derived from Defendant’s records.

VI. First Claim For Relief

Violation of FCRA

  1. Plaintiff incorporates the foregoing paragraphs as though the same were set forth at length herein.
  2. Defendant is a “person,” “consumer reporting agency” and “reseller” as those terms are defined by 15 U.S.C. §§ 1681a(b), (f) and (u).
  3. Plaintiff is a “consumer” as that term is defined by 15 U.S.C. § 1681a(c).
  4. The above-mentioned credit reports were “consumer reports” as that term is defined by 15 U.S.C. § 1681a(d).
  5. Pursuant to section 1681n and/or 1681o of the FCRA, Defendant is liable for violating the FCRA by engaging in the following conduct with respect to Plaintiff and the Classes:

(a)              failing to follow reasonable procedures to assure “maximum possible accuracy” of the reports it sold, in violation of 15 U.S.C. § 1681e(b);

(b)             failing to follow reasonable procedures to assure that reports are sold only for legitimate “permissible purposes,” in violation of 15 U.S.C. §§ 1681e(a) and/or 1681b;

(c)              failing to disclose to consumers all information in their credit file, in violation of 15 U.S.C. § 1681g(a)(1);

(d)             failing to disclose to consumers a list of the names of any and all entities to which it sold the consumer’s report in the previous one-year period, in violation of 15 U.S.C. § 1681g(a)(3)(B);

(e)              failing to provide to consumers the summary of their rights under the FCRA as prepared by the Federal Trade Commission, in violation of 15 U.S.C. § 1681g(c)(2);

(f)               failing to provide to consumers a toll-free telephone number established by the agency, at which personnel are accessible to consumers during normal business hours, in further violation of 15 U.S.C. § 1681g(c)(2);

(g)              failing to provide to consumers a list of all federal agencies responsible for enforcing any provision of the FCRA, as well as the address and any appropriate telephone number of each such agency, in a form that will assist the consumer in selecting the appropriate agency, in further violation of 15 U.S.C. § 1681g(c)(2);

(h)             failing to provide to consumers a statement that the consumer may have additional rights under state law, and that the consumer may wish to contact a state or local consumer protection agency or a state attorney general (or the equivalent thereof) to learn of those rights, in further violation of 15 U.S.C. § 1681g(c)(2);

(i)                failing to provide to consumers a statement that a consumer reporting agency is not required to remove accurate derogatory information from the file of a consumer, unless the information is outdated under section 1681c of this title or cannot be verified, in further violation of 15 U.S.C. § 1681g(c)(2);

(j)                stating on its website that it will not independently reinvestigate consumer disputes of errors, and as a matter of policy and practice failing to conduct reinvestigations into consumer disputes that it receives, in direct violation of 15 U.S.C. § 1681i(a);

(k)             requiring consumers to make a written, signed dispute, on one of its forms, and further to include with their dispute a “photo ID, Social Security card, and/or tax ID card,” in further violation of 15 U.S.C. § 1681i(a); and

(l)                failing to determine whether a disputed item of information is incomplete or inaccurate as a result of an act or omission of itself as a reseller, in violation of 15 U.S.C. § 1681i(f).

VII. Second Claim for Relief

Violation of CCRAA

  1. Plaintiff incorporates the foregoing paragraphs as though the same were set forth at length herein.
  2. Defendant is a “consumer consumer reporting agency” as defined by Cal. Civ. Code § 1785.3(d).
  3. Plaintiff is a “consumer” as that term is defined by Cal. Civ. Code § 1785.3(b).
  4. The above-mentioned credit reports were “consumer consumer reports” as that term is defined by Cal. Civ. Code § 1785.3(c).
  5. Pursuant to Cal. Civ. Code § 1785.31, Defendant is liable for violating the CCRAA by engaging in the following conduct with respect to Plaintiff and the Classes:

(a)              failing to follow reasonable procedures to assure “maximum possible accuracy” of the reports it sold, in violation of Cal. Civ. Code § 1785.14(b);

(b)             failing to follow reasonable procedures to assure that reports are sold only for legitimate “permissible purposes,” in violation of Cal. Civ. Code § 1785.14(a);

(c)              failing to disclose to consumers all information in their credit file, and to provide them with all of their disclosure rights under the CCRAA, in violation of Cal. Civ. Code §§ 1785.10 and 1785.15;

(d)             failing to reinvestigate a consumer’s dispute, in further violation of Cal. Civ. Code § 1785.16; and

(e)              requiring consumers to make a written, signed dispute, on one of its forms, and further to include with their dispute a “photo ID, Social Security card, and/or tax ID card,” in further violation of Cal. Civ. Code § 1785.16.

VII. Jury Trial Demand

  1. Plaintiff demands trial by jury on all issues so triable.

XI. Prayer For Relief

WHEREFORE, Plaintiff seeks judgment in her favor and in the favor of the Classes for the following:

(a)              A determination that this action may proceed and be maintained as a class action under the FCRA and CCRAA;

(b)             Statutory damages of $100 to $1,000 per Class member under the FCRA;

(c)              Putative damages of $100 to $5,000 per Class member per violation under the CCRAA;

(d)             Actual damages under the FCRA and CCRAA;

(e)              Punitive damages under the FCRA;

(f)               Injunctive relief under the CCRAA;

(g)              Costs and reasonable attorney’s fees under the FCRA and CCRAA; and

(h)             Such other and further relief as may be necessary, just and proper.

 

 

JAMES A. FRANCIS

JOHN SOUMILAS

GEOFFREY H. BASKERVILLE

FRANCIS & MAILMAN, P.C.

Land Title Building, 19th Floor

100 South Broad Street

Philadelphia, PA  19110

(215) 735-8600

Attorneys for Plaintiff and the Classes