By: Creditor’s Rights & Bankruptcy & Litigation Practice Groups
In early September 2019, after about six hours of deliberation, a federal jury awarded a Portland, Oregon man $101,000 in non-economic damages against Wells Fargo Bank for violation of the Fair Credit Reporting Act. The jury found that the bank negligently and willfully violated the Fair Credit Reporting Act when it took 14 months to delete an account that resulted from identity fraud.
An identity thief opened a car loan account at Wells Fargo in July 2016 in the victim’s name and bought a BMW at a used car dealership in Southern California. The thief was caught later that same year and convicted of the crime.
Between October 2016 and November 2017, the victim alleged that the bank failed to reasonably investigate notices of the fraud. One of the notices sent by the victim included the police report, a notarized identity theft victim’s complaint and affidavit, the California court case number, and the police case number.
Instead of sending the notices to the fraud department for investigation, Wells Fargo employees only verified whether the personal information on the car loan account matched the victim’s personal information. Wells Fargo responded to each of the victim’s disputes with notices stating that the bank had verified that the information being sent to the consumer credit reporting agencies on the account was accurate and that the car loan account was valid. Due to human error, the reports were not transferred to a separate fraud department.
In December 2017, the victim filed a lawsuit against Wells Fargo. The car loan account was then deleted from the victim’s credit report. Wells Fargo’s attorney admitted that the bank was negligent in not deleting the car loan account earlier and validating it as fraudulent. Citing human error, Wells Fargo’s attorney successfully argued against the punitive damages the victim’s lawyer was urging the jury to award.
Banks handle hundreds of thousands of consumer disputes a year, but delaying or mishandling reports of fraud could lead to costly consequences. Even when errors occur, being proactive can help avoid more punitive consequences.
Peggy Richard is an attorney in the Creditor’s Rights & Bankruptcy and Litigation practice group. The information in this article is not intended to provide legal advice. For professional consultation, please contact Peggy Richard at Saalfeld Griggs PC. 503.399.1070. firstname.lastname@example.org © 2019 Saalfeld Griggs PC