Woman Blazed a Paper Trail to Clear Her Credit
Judy Thomas has three words of advice for consumers who are trying to eradicate incorrect information from their credit reports: Document, document, document.
“Every conversation I had, I have a note on,” Thomas said of her six-year battle to correct her credit report. “It may not be perfect form. It might not even have a date on it, but it included all the information that I could get.”
The 57-year-old Oregon real estate broker last week won the largest award in history for violations of the federal Fair Credit Reporting Act--$5.3 million--in a case against Trans Union, one of the nation’s three big credit reporting companies. Chicago-based Trans Union said it was disappointed with the ruling but has not determined whether it will appeal, spokesman Clark Walter said.
Lawsuits filed under the Fair Credit Reporting Act, which typically allege that a credit reporting company failed to correct inaccurate items on consumer credit reports as required under the law, are relatively rare, attorneys note. Big cases, in which the consumer wins more than a token amount, are even rarer. Only a handful of consumers have won more than $100,000, said Andy Henderson, a Los Angeles attorney who has litigated several such cases. Many cases are settled before trial for undisclosed amounts.
The reason few cases go to trial is that they’re complicated and costly to litigate, attorneys said. Consumers rarely have enough money to pay hourly legal fees, so lawyers take only those cases they think are strong enough to promise decent contingency fees, which are based on a percentage of the damages awarded.
Still, the number of lawsuits and size of damage awards are growing as more people discover errors on their credit reports--the detailed credit histories that determine whether a consumer can get a loan to buy such things as a house or car, and what interest rate they’ll have to pay.
The rapid spread of identity theft--in which stolen personal information is used to open bogus credit accounts--has contributed to the rise because the thief’s credit activity appears on the victimized consumer’s report.
Thomas’ story reveals the reason consumers who have never thought about their credit records need to keep tabs on what the credit reporting companies are saying about them. It also provides a guide for handling problems when they arise.
During the trial of Thomas’ lawsuit, a Trans Union representative testified that the company uses computerized algorithms to match credit data with the right consumers. But because numbers are sometimes juxtaposed, miskeyed or misread, these programs disregard a certain number of mistakes, including name, address, Social Security number or birth date.
The result: Two files can become merged because one consumer’s name or Social Security number is similar to another’s. And similar is a relative term, said David A. Szwak, a consumer attorney in Louisiana. For instance, Szwak sued a credit company for confusing Myra S. Coleman with Maria S. Gaiytan. The company maintained at that trial that Myra could be a nickname for Maria.
“The mismerge of credit reports is a very big problem,” Szwak testified during the trial of Thomas’ suit. “I have seen hundreds of cases like this.”
Thomas’ woes started when she moved to Oregon from California. Another woman living in the Northwest had a similar first name--Judith--and a similar Social Security number, and that’s all it took, she said, for their credit files to be merged.
The next thing she knew, Thomas had an “a.k.a.” or “also known as” appended to her file that said she had an alternate identity and another address. The other woman was born in the same year as Thomas, but not on the same date. Her Social Security number differed from Thomas’ by one digit. She had a different last name and lived in Washington.
She also had serious credit problems--which began to show up on Thomas’ credit report.
“You think about it,” Thomas said. “Social Security numbers have nine digits. How many numbers could be one digit off yours? How likely is it that one of those people has your first name? That was their corroboration that it was me. It was another Judy in the Northwest. That’s all it took.”
More frustrating, Thomas said, was the way Trans Union handled the problem. According to trial testimony, she repeatedly explained that she was not the other Judy, but Trans Union failed to take the other woman’s information off her credit file. And creditors continued to treat Thomas as a poor risk.
But what set Thomas’ lawsuit apart was what she did to try to correct the problem, her attorneys said. She tracked down the other Judy and wrote her a letter. The other Judy wrote back attesting to the fact that she was a different person--no relation--and didn’t belong on Thomas’ credit file. Thomas sent that letter, along with her own protest, to Trans Union. She kept copies.
She made phone calls. She kept notes. When she was unable to get the credit company to eliminate the other Judy’s credit woes from her report, she contacted the creditors directly--providing the correct information about who she was and pointing out that she was not related to the other woman. The creditors acknowledged, in writing, that Thomas was right. She sent the letters to Trans Union with a note--and kept copies.
She created a file folder. It expanded to fill a briefcase and then a storage box. She never threw out a letter or her notes.
“It was my security blanket,” she said. “I figured that if I needed credit during that time, I could take it to the lender and show them what I had been through.”
In the end, it was a jury that sorted through Thomas’ box of records chronicling the frustration of a woman who was misidentified for six years--despite a protracted effort to prove who she was and wasn’t. The federal jury in Portland awarded her $300,000 in compensatory damages and $5 million in punitive damages.
The lesson? If you find your credit report sullied by someone else’s data, do what Thomas did, said attorney Mike Baxter, co-counsel in Thomas’ case: Document, document, document.
Times staff writer Kathy M. Kristof, author of “Investing 101” (Bloomberg Press, 2000), welcomes your comments and suggestions but regrets that she cannot respond individually to letters or phone calls. Write to Personal Finance, Business Section, Los Angeles Times, 202 W. 1st St., Los Angeles, CA 90012, or e-mail kathy.kristof @latimes.com. For past Personal Finance columns visit The Times’ Web site at www.latimes.com /perfin.
