A District Court judge in Arizona has awarded more than $17,000 in damages and attorney’s fees to a plaintiff who obtained a default judgment against a collection agency for allegedly violating the Fair Credit Reporting Act by furnishing inaccurate information because it reported a delinquent account that was more than seven years old.
A copy of the ruling in the case of McDermott v. Perfection Collection LLC can be accessed by clicking here.
The plaintiff stopped making payments on a home alarm monitoring system back in 2011. The account was placed with the defendant in 2019 and it allegedly began reporting the debt to at least two credit reporting agencies. The plaintiff disputed the debt, and at least one of the credit bureaus responded and confirmed the information was accurate The plaintiff claimed the negative item dropped his credit score by as much as 30 points and cost him a good interest rate when he tried to refinance his mortgage. He filed suit, naming one of the bureaus and the defendant. The credit bureau was dismissed from the lawsuit, but the agency never responded to the suit and a default judgment was entered last May.
Judge James Teilborg of the District Court for the District of Arizona awarded the plaintiff $3,500 in damages, $12,900 in attorney’s fees, and $728.80 in costs, for a total of $17,128.80. Judge Teilborg determined that the defendant’s violation of the FCRA was willful, entitling the defendant to the larger damages award. The conduct was willful, Judge Teilborg ruled, because the defendant continued to disseminate incorrect information after it received the dispute. “… an adequate investigation would have revealed that the alarm system account became deficient more than seven years prior, in 2011, and was therefore unreportable on Plaintiff’s credit report,” Judge Teilborg wrote. “Accordingly, Defendant was likely aware of the incorrect information after its investigation and willfully violated the FCRA by continuing to report the collections account.”
