Phipps v. Experian

Background

Derrick Phipps, representing himself, sued Experian under the Fair Credit Reporting Act (FCRA). He alleged that Experian continued reporting false or fraudulent names, addresses, accounts, inquiries, and other negative information on his credit report despite several written disputes. He sought compensatory and punitive damages.

Phipps alleged that he sent Experian letters on November 10, 2017; December 18, 2017; February 6, 2020; and March 13, 2020. He said he included documents such as his driver's license, Social Security card, utility bill, affidavit, police report, and identity-theft report. According to Phipps, Experian sometimes said it had removed information, but later reports still contained negative information or showed previously removed names and addresses with a wrong birth date.

Legal standards

The court explained that the FCRA requires consumer reporting agencies to use reasonable procedures to ensure the maximum possible accuracy of credit-report information. It also requires agencies to reasonably reinvestigate disputed information and, in certain circumstances, block information identified as resulting from identity theft.

For claims based on inaccurate reporting or inadequate reinvestigation, a plaintiff must identify the inaccurate information and explain why it is inaccurate. The plaintiff must also allege facts supporting the claimed violation and resulting injury. For an identity-theft blocking claim, the plaintiff must identify the information resulting from identity theft and allege that he provided the information required by the statute.

Court's analysis

The court found that Phipps had not made the required threshold showing that his credit report contained inaccurate information. He referred generally to fraudulent names, addresses, accounts, inquiries, and other information but did not identify the specific items he claimed were inaccurate or explain why they were inaccurate.

The court also found that Phipps did not adequately allege that Experian failed to use reasonable reinvestigation procedures. His allegations suggested that Experian had reviewed his information and removed some information, although Phipps disagreed with the results. He did not identify the name that Experian allegedly updated, the names and addresses allegedly reinserted, or whether the reinserted information was the same information previously removed.

As to identity theft, the court said Phipps's allegations appeared to suggest that Experian did not comply with statutory time frames. However, the complaint did not clearly show whether Phipps provided all required information. In particular, he did not identify the information on his report that he claimed resulted from identity theft or plead the facts contained in the affidavit he sent to Experian.

Disposition

The court granted Phipps leave to amend his complaint within 60 days because he might be able to allege additional facts supporting a valid FCRA claim. The amended complaint was required to identify the allegedly inaccurate information, explain why it was inaccurate, identify information Experian removed and reinserted, describe facts showing inadequate verification or reinvestigation, and identify the information allegedly resulting from identity theft and the required materials provided to Experian.

The court directed Phipps to submit an amended complaint labeled "Amended Complaint" and using docket number 20-CV-3368 (LLS). The amended complaint would replace, rather than supplement, the original complaint. The court stated that if Phipps did not comply within the allowed time and could not show good cause, the complaint would be dismissed for failure to state a claim. No summons would issue at that time.