In a recent opinion issued by the United States Court of Appeals for the Ninth Circuit it was determined that credit bureaus do not need to deal with dispute letters sent by a credit repair organization.
The opinion stated, “A credit repair organization sent letters to Experian, a consumer reporting agency, on behalf of plaintiff, asserting that several items in plaintiff’s credit file were incorrect and asking Experian to conduct a reinvestigation to verify the items’ accuracy.
The panel held that, under 15 U.S.C. § 1681i, Experian was not required to initiate a reinvestigation because plaintiff did not “directly” notify it of the disputed items.”
The credit repair group, Go Clean Credit, did what many such companies do, they sent dispute letters to try and get negative items removed.
“The letters asserted that several items in Warner’s credit file were incorrect and asked Experian to conduct a reinvestigation to verify the items’ accuracy. Warner played no role in drafting the letters, and he did not review them before they were mailed. As a result, Warner never confirmed that the disputes presented to Experian by Go Clean Credit were legitimate.”
This case is worth knowing about because the “district court consolidated Warner’s action with twenty-nine other cases that alleged similar facts and asserted similar claims.”
The Facts of the Case
“John McIntyre hired Go Clean Credit to perform “credit repair services.” McIntyre and Go Clean Credit memorialized their agreement in a written contract that “grant[ed] GCC a limited power of attorney to write and send letters to creditors and credit bureaus on McIntyre’s behalf and in McIntyre’s name and to utilize . . . McIntyre’s electronic signature or for a GCC representative to sign the letters on McIntyre’s behalf.”
As the agreement contemplated, Go Clean Credit sent a series of letters to Experian contending that several negative items in McIntyre’s credit file were inaccurate. The letters asked Experian to reinvestigate the disputed items. For instance, the first letter sent by Go Clean Credit on McIntyre’s behalf that was received by Experian was a letter dated April 20, 2015. In his deposition, McIntyre testified that he had “absolutely no input” in the preparation of that letter. Go Clean Credit did not show McIntyre the letter before sending it. As a result, Go Clean Credit did not give McIntyre the opportunity to confirm that there was some basis for the disputes it submitted. It appears that most, if not all, of the disputed items identified in that letter were, in fact, not inaccurate. Indeed, in his deposition, McIntyre could not identify a single disputed item that was inaccurate.
Experian responded by sending a letter to McIntyre on May 8, 2015. The letter stated that Experian had “received a suspicious request in the mail” and “determined that it was not sent by [McIntyre].” Experian informed McIntyre that it would “not be initiating any disputes based on the suspicious correspondence.” Experian also explained that McIntyre could call Experian or visit Experian’s website if he believed the information in his credit file was inaccurate or incomplete.
McIntyre did neither. Instead, Go Clean Credit sent several more letters to Experian on McIntyre’s behalf. Again, Go Clean Credit neither sought McIntyre’s input before drafting these letters nor asked him to review the letters before sending them. These letters also disputed a number of accurate items in McIntyre’s credit file. Experian did not initiate a reinvestigation after it received the letters.”
This case highlights a fundamental problem with hiring someone to perform credit repair on your behalf. The court found, “McIntyre played almost no part in submitting the dispute letter to Experian. He did not identify the items to be disputed. He did not review the letter Go Clean Credit drafted before it sent it to Experian. Indeed, his testimony was that he played no role in preparing the letters at all. For instance, he stated that he had “absolutely no input” into the contents of the letter Go Clean Credit sent on April 20.”
The point for all credit repair groups to consider is at the very least, clients should play a role in the identification of inaccurate accounts, play a role in preparing the letters, and review the letters before they are sent.
You can read the full opinion below.