Information on a Pending Case, Holman v Experian Information Solutions, a Class Action in which Plaintiffs Allege Experian Sold Credit Information in Violation of the Fair Credit Reporting Act

In January 2011, our law firm filed a class action against Experian Information Solutions, Inc. alleging that Experian willfully violated the Fair Credit Reporting Act by furnishing certain credit information to a collection agency to use for an impermissible purpose, i.e., collecting involuntary towing deficiency claims. Holman v Experian Information Solutions, Case No. CV-11-00180 CW (N.D. California). A copy of the First Amended Complaint is here.

The Holman class action is related to a now completed case in which the Ninth Circuit Court of Appeals held that a collection agency does not have a permissible purpose under the Fair Credit Reporting Act to obtain a credit report to collect a debt if the consumer did not voluntarily initiate the underlying transaction by seeking credit. Pintos v. Pacific Creditors Ass'n, 504 F.3d 792 (9th Cir. 2007) opinion withdrawn and superseded, 565 F.3d 1106 (9th Cir. 2009) opinion amended and superseded on denial of reh'g, 605 F.3d 665 (9th Cir. 2010).

The alleged debt in Pintos was a towing deficiency claim. Plaintiff Maria Pintos’s car had been towed at the direction of the police and sold at a lien sale when she failed to paying the charges for towing and storage. The towing company sent the alleged debt to a collection agency that her credit report from Experian’s database. The Ninth Circuit held that the collection agency had no right to so not having a permissible purpose because she incurred the debt involuntarily.

In Pintos, the Ninth Circuit further explained that § 1681e(a) of the FCRA requires credit reporting agencies such as Experian to verify its customers’ uses of credit reports before furnishing any reports and not to furnish any reports if there are reasonable grounds to believe they may be used for impermissible purposes. Pintos v. Pac. Creditors Ass'n, 504 F.3d 792, 800 (9th Cir. 2007).

In 2009, the Ninth Circuit revised its explanation as to why collecting on involuntary towing claims does not constitute a permissible purpose to obtain a consumer report, but left the holding and its discussion of the other issues unchanged. Pintos v. Pac. Creditors Ass'n, 565 F.3d 1106, 1113 (9th Cir. 2009). The Ninth Circuit denied en banc review in May 2010 and the Supreme Court denied certiorari in January 2011.

In the Holman class action, we allege Experian violated the Fair Credit Reporting Act when it failed to take any action to comply with Pintos until late 2010. It did not notify its collection agency customers about Pintos until then. It did not alter its screening procedures for collection agency subscribers. It did not tell its Membership Department not to approve any subscriber that appeared to be collecting towing claims.

Experian’s sole response to Pintos until late 2010 was to instruct employees to respond to questions about Pintos by urging the subscriber to consult with its own attorneys. Having failed to implement any procedures to comply with the FCRA as clarified by Pintos, Experian approved a collection agency known as Finex as a subscriber and furnished it with credit information on thousands of individuals who owed money on towing deficiency claims.

Plaintiffs are class members whose credit information was furnished by Experian to Finex for an impermissible purpose.

Plaintiffs and the class seek statutory damages of $100 to $1,000 per class member.

In May 2011, the district Court denied Experian’s motion to dismiss. It explained that under Ninth Circuit precedent, Experian was not allowed to ignore the Pintos decision after it was issued even though it was “subject to Experian’s petitions for rehearing en banc and for a writ of certiorari in the United States Supreme Court….”

On April 27, 2012, the district Court certified the class. In essence, the Court agreed that the case meets all the requirements for going forward as a class action. The class includes all consumers whose credit information was furnished by Experian to Finex, a debt collector, from January 12, 2009, to the present in connection with Finex’s efforts to collect on towing deficiency claims that were not reduced to judgment and were not the result of a transaction that the consumer initiated. A copy of the Court’s order certifying the class is available here.

Tow Company Cases. We have represented a number of consumers who have been harassed by debt collectors that specialize in collecting auto tow and storage bills. Sometimes the debt collector sues someone who is not responsible for the account having sold the car to someone else who allowed it to be towed. In other cases, the tow companies illegall access the owner or former owner's credit report. Click here to read more

Stolen Identity Cases: Andrew Ogilvie has handled several cases for consumers who were the victims of identity theft. In a typical identity theft case, the victim does not know that his identity has been stolen for many months. Then they often learn of the theft of their identity when they receive a phone call or letter from a collection agency that is demanding payment on a credit card or loan that the consumer has never opened. The consumer often stumbles around trying to figure out how to solve this problem: how to stop the collection agency from pursuing them, how to get the credit reporting agencies to correct their credit reports, and how to regain their good credit so they can buy a car or finance a house. We have assisted a number of identity theft victims to send the proper letters to the proper corporations and, if those corporations have not responded appropriately, we have sued them for those consumers. Again, we handle these cases on a contingency fee basis.