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Check Your Sources: a “Source” is Likely the Entity that Directly Provides the Information to the Credit Reporting Agency

In Shimon v. Equifax Info. Servs. Llc, No. 18-cv-2959 (BMC), 2018 U.S. Dist. LEXIS 174665 (E.D.N.Y. Oct. 8, 2018), the court held that for purposes of 15 U.S.C. § 1681g, the “source” of information is the party that provides the information directly to the credit reporting agency. The court held that while it was reasonable for Equifax to interpret the word “source” as “the point of origin” of information, that interpretation is mistaken.

By way of background, in 2013, a debt collection company obtained a civil judgment against the plaintiff, Shimon, in New York civil court which was vacated about nine months later. A third party, LexisNexis Risk Solutions, provided information about the judgment to Equifax but did not report that it was vacated.  Plaintiff disputed the judgment with Equifax in May 2014 and Equifax marked the judgment as “satisfied.” However, plaintiff alleges that Equifax did not completely remove the judgment from his credit report.

Years later, the plaintiff asked Equifax to provide a report of the sources of information for his credit report so that he could contact those sources directly, presumably to inquire about the discrepant judgment information. In response, Equifax allegedly provided several reinvestigation results letters and a copy of his full credit file that listed the “source” of the judgment-related information as the court and included the court’s contact information, although the court had not directly furnished the information, LexisNexis Risk Solutions had.

Among other things, plaintiff alleged a violation of FCRA section 1681g for Equifax’s alleged fraudulent misrepresentation by naming the court as the provider of the information, not LexisNexis Risk Solutions.

Equifax moved to dismiss the cause of action for willful violation of section 1681g (among other claims) on the basis that its interpretation of the word “source” was not objectively unreasonable. The court agreed that Equifax’s interpretation of the term “source” in section 1681g(a)(2) was “sufficiently reasonable, albeit mistaken, to preclude a finding of willfulness.” Shimon, 2018 U.S. Dist. LEXIS 174665 at *12. The court held that in common parlance the word “source” could refer to a point of origin or to the entity that supplies the information.  Id. at *14.  The court also noted that the plaintiff had not pointed to any FCRA-specific definition of “sources” in the statute or administrative guidance that should control over the term’s ordinary meaning. Id.

Thus, the court held that Equifax’s interpretation of the term “source” as having its ordinary meaning was not unreasonable and precluded a finding of willfulness.

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