Trans Union Includes False Bankruptcy Records in Credit Reports, Class Action Claims

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A proposed class action has been filed over Trans Union, LLC’s alleged practice of inaccurately including bankruptcy records in consumers’ credit reports, even after they’ve disputed the information.

The 10-page case claims Trans Union, one of the “Big Three” consumer reporting agencies, has violated the Fair Credit Reporting Act (FCRA) by failing to use all of the information at its disposal to conduct reinvestigations of customers’ disputes and subsequently correct inaccurate records. As a result, the defendant has harmed “hundreds of thousands of consumers” by reporting inaccurate and misleading credit information to potential creditors and service providers, according to the suit.

The lawsuit was filed by a San Diego resident who claims to have disputed an inaccurate bankruptcy record in his credit file with Trans Union only to have the false information reappear on a subsequent report when he applied for a loan months later.

According to the case, the FCRA requires consumer reporting agencies to conduct a reasonable investigation when a consumer disputes information in their credit file. Despite this requirement, however, Trans Union, the lawsuit alleges, fails to use all of the information available in its systems to conduct reinvestigations, and ultimately fails to correct inaccurate information reported about consumers.

According to the complaint, an individual with the same first and last name as the plaintiff filed for bankruptcy in Mobile, Alabama in January 2020. The plaintiff, however, has never filed for bankruptcy or lived in Mobile, has a different middle name than the individual and consistently uses a generational suffix, the case says.

Nevertheless, Bank of America allegedly communicated to Trans Union in early January that the credit reporting agency should include bankruptcy notations in the plaintiff’s file for his Bank of America line of credit and credit card, the filing claims. Per the lawsuit, the plaintiff sent a letter to Trans Union disputing the bankruptcy remark on his Bank of America, Macy’s and Home Depot accounts and explained that the Alabama bankruptcy filing did not pertain to him.

The case claims that although Trans Union reinvestigated the plaintiff’s dispute and removed the bankruptcy remark from his file, as confirmed in a January 29 letter, the bankruptcy remark was added back to the man’s report at some point after January 29. According to the complaint, the plaintiff only discovered the inaccurate information was once again on his credit report after he applied for and was denied a personal loan in March. 

The lawsuit alleges that Trans Union’s response to the plaintiff’s dispute and subsequent reporting of inaccurate information about him was a result of the agency’s “usual policies and procedures.”

The plaintiff looks to represent anyone in the U.S. or its territories who, at any time within the past two years and through the resolution of this case, received reinvestigation results from Trans Union removing a bankruptcy remark from a tradeline as a result of a dispute and about whom Trans Union later sold to a third party a consumer report containing a bankruptcy remark on another tradeline from the same furnisher (such as a bank, credit card company or retailer) as the previously removed remark.

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