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Claiming that the credit report of his death was greatly exaggerated, plaintiff Richard Sheffer filed suit against Sears Roebuck & Co. and three credit reporting agencies, complaining that despite his protests that he was still very much alive, the “deceased” notation remained on his credit report because the reporting agencies said Sears had “verified” his death. Now a federal judge in Pennsylvania has cleared the way for Sheffer’s case to go to trial, ruling that a jury must decide whether two of the credit reporting agencies — Trans Union LLC and Equifax Inc. — employed “unreasonable” procedures for dealing with such a mix-up. (Court records show that Sheffer has settled his claim against the third agency, Experian Information Solutions Inc.) Significantly, Berle M. Schiller also refused to dismiss a claim for punitive damages after concluding that Sheffer may be able to prove at trial that one or both of the reporting agencies engaged in “willful” violations of the Fair Credit Reporting Act. “There is evidence regarding the conduct of Equifax and Trans Union suggesting that the problems that Mr. Sheffer experienced were not the result of mere human error and that the errors were not promptly cured. On this basis, a jury may be able to find that defendants acted with conscious or reckless disregard to the rights of consumers,” Schiller wrote in his nine-page opinion in Sheffer v. Experian Information Solutions. The ruling is a victory for attorneys James A. Francis, Mark D. Mailman and John Soumilas of Francis & Mailman, a firm that specializes in FCRA and other consumer-rights litigation. According to the suit, Sheffer opened a Sears charge account in 1993. Sometime later, the account was accidentally “merged” with the account of a man who had died. Sheffer claims he first learned of the error in November 2000 after his bank refused to increase his line of credit, and he obtained a copy of his credit report from Equifax. The Equifax report noted that Sheffer had a Sears account and carried a “remark” stating “consumer deceased.” The report also noted that the Sears account had been opened in 1965 — four years before Sheffer was born. Sheffer claims he telephoned Equifax to dispute the report and insist that he was still living. Six days later, the suit says, Sheffer received a letter from Equifax that said the agency had “reinvestigated” the disputed information and had “verified” that it was correct. After another phone call, Sheffer claims that Equifax promised to delete all information about the Sears account from the report. But in December 2001, the suit says, a new Equifax report again contained the Sears account and the notation that Sheffer was deceased. Sheffer claims his lawyer contacted Trans Union in April 2002, to dispute a similar “deceased” notation on its credit report. Once again, the suit says, Sheffer was informed that the information had been “verified.” Finally, in June 2002, when Sheffer’s lawyer told Trans Union that Sheffer “disavowed ownership” of the Sears account, Trans Union agreed to delete it from the report, the suit says. After Sheffer filed suit, lawyers for Trans Union urged Schiller to dismiss the case, arguing that there was nothing illegal about the agency’s decision to trust information provided by Sears. “Trans Union follows reasonable procedures to assure the maximum possible accuracy of information reported about consumers, including plaintiff. Sears is a national lender and there is no evidence of record that Trans Union had any reason to doubt the information provided by Sears generally or respecting the disputed account. Further, Trans Union had no reason to doubt Sears’ reverification of the remark when plaintiff made his dispute to Trans Union,” attorneys Bruce S. Luckman and Timothy P. Creech of Satzberg Trichon Kogan & Wertheimer wrote in their motion for summary judgment. Schiller disagreed, finding that � 1681i of the FCRA requires reporting agencies to “investigate consumers’ disputes about the information in their credit files.” The 3rd U.S. Circuit Court of Appeals, Schiller found, has held that reporting agencies must do more than “merely parrot information received from other sources.” In its 1997 decision in Cushman v. Trans Union Corp., Schiller said, the 3rd Circuit held that “a ‘reinvestigation’ that merely shifts the burden back to the consumer and the credit grantor cannot fulfill the obligations contemplated by the statute.” Schiller concluded that a jury could find in Sheffer’s favor because “the evidence suggests that Trans Union merely parroted information provided by other sources, despite the fact that plaintiff provided information supporting his assertion that the ‘deceased’ statement was incorrect.” Sheffer also has evidence that could support a finding that Trans Union violated � 1681e(b) of the FCRA which requires reporting agencies to “follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates,” Schiller found. The Trans Union report, Schiller noted, indicated that Sheffer was born in 1969 and that the Sears account was opened in 1965. And the Sears account was the only one of two dozen that included the “deceased” notation. “These inconsistencies provide a basis from which a jury could infer that the procedures were unreasonable,” Schiller wrote. Lawyers for both Equifax and Trans Union urged Schiller to dismiss Sheffer’s claim for punitive damages, arguing that he cannot prove that either agency “willfully” violated the FCRA. But Schiller found that courts have held that punitive damages may be warranted where the evidence shows that inaccuracies in credit reports arise from something more than “an isolated instance of human error which the agency promptly cures.” Sheffer may have a valid claim for punitives, Schiller found, because “there is evidence regarding the conduct of Equifax and Trans Union suggesting that the problems that Mr. Sheffer experienced were not the result of mere human error and that the errors were not promptly cured.” But Schiller said he would be willing to reconsider whether punitives should be submitted to the jury if the evidence falls short at trial. “I will be in a better position to assess the merits of these claims when they are put into a fuller context at trial, and, consequently, I deny defendants’ motions without prejudice to their rights to reassert their arguments regarding punitive damages in an appropriate motion,” Schiller wrote.

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