Experian has reached a $24 million settlement after it was sued in a class-action alleging it violated the Fair Credit Reporting Act by reporting delinquent debts on payday loans that were deemed to be illegal.
A copy of the memorandum in support of the plaintiff’s motion to grant preliminary approval of the settlement in the case of Reyes v. Experian Information Solutions can be accessed by clicking here.
The proposed class includes as many as 100,000 individuals who will each receive a payment of $270 without having to take any action to participate in the settlement.
The plaintiffs originally filed the lawsuit in 2016, accusing the credit bureau of reporting accounts that were furnished by Delbert Services Corp. on loans that were originated by Western Sky Financial. The defendant was granted summary judgment, which was appealed to the Court of Appeals for the Ninth Circuit, which reversed the summary judgment and vacated the order.
In reversing the summary judgment, the Ninth Circuit determine there were genuine issues of material fact related to the inaccuracy and willfulness of the defendant for continuing to report the plaintiff’s debt as delinquent even though the account was no longer verifiable and that the plaintiff could not make current because Delbert had gone out of business.
The defendant’s “continued reporting” of the account and the “extraordinarily lengthy delay in implementing its internal decision to delete the Delbert accounts” was “reckless and “willful,” the Ninth Circuit ruled.
At this point, the plaintiff sought — and received — class certification, which the defendant appealed back to the Ninth Circuit. At this point, the two sides began settlement negotiations and worked out the deal that was filed earlier this week.
“The settlement — one of the largest in history relating to inaccurate reporting violations under the Fair Credit Reporting Act — was achieved only after significant discovery, contested discovery- related disputes, extensive motion practice that included several dispositive motions, a successful appeal reversing a judgment in Experian’s favor, an order granting class certification, and months of arm’s-length negotiations through an experienced mediator,” the plaintiffs wrote in their motion.
