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Texas Dealer Hit With $100K FCRA Lawsuit

In June 2019, a $100,000 lawsuit was filed against a Texas dealership's related auto finance company for credit reporting violations. One of the claims the plaintiff's attorney is making is that the auto dealer didn't respond properly to a customer's credit reporting dispute. Fortunately, this dealer had written policies and procedures in place and had responded to all credit disputes, inquiries, reports, and adverse actions in a correct, timely way. Also, the dealership had the certified letters and written correspondence to prove it. As the trial moves forward, the dealer will have the evidence to prove they responded correctly and get nonsuited. According to Richard Hudson of Ignite Consulting Partners, "we've seen an increase in these types of suits and continue to emphasize how important it is for dealerships to have written policies and procedures and take your furnisher duties under FCRA seriously."
 
The legal tactic isn't new. The plaintiff's law firm throws everything at the creditors and hopes they'll get enough of them to settle for a small amount to make it go away.   Make sure that when the time comes, you can make your case.

From the May 2019 Edition of the Texas Dealer

A new Florida class action alleges that a car dealership misrepresented that it would make a “soft” credit inquiry, or pull, rather than a “hard” pull – and then made a hard pull. While the lawsuit alleges a straight-up misrepresentation causing harm to the consumer's credit standing, the lawsuit illustrates the importance of accuracy in the increasingly common practice of creditors promising to make a soft credit pull in pre-qualification scenarios.
Two plaintiffs have filed the class action against a Florida dealership alleging violations of the Fair Credit Reporting Act and the Florida Fair Credit Reporting Act related to financing pre-qualifications done through the dealership's website. Plaintiffs Mary Anne Emeric and Natalia Maria Rivera filed suit in the Southern District of Florida against Florida Fine Cars, Inc., a Miami dealership, on behalf of themselves and all other persons who visited the dealership's website and had a hard credit pull instead of a soft credit inquiry as noted on the Florida Fine Cars financing page.
According to the plaintiffs, they visited the Florida Fine Cars website, found cars they wanted to purchase, then called the dealership to confirm that the cars were available. During the call, a representative of the dealership told them to click on the “financing” link and fill out the form on the website. The plaintiffs provided their personal and residential information and agreed to a soft credit inquiry for prequalification. The website touted the soft pull, noting that it did not require a Social Security number, meaning that the credit inquiry would not affect consumers' credit scores. Instead, the plaintiffs' credit reports noted a hard pull from the dealership – an inquiry that could stay on the plaintiffs' credit reports for up to two years and have a negative impact on their credit scores.
The complaint asserts four prospective classes, including:
  • An FCRA Impermissible Purpose Class, defined as “[a]ll persons within the United States who had a hard credit inquiry performed on his or her credit by Defendant FFC, who had not authorized a hard inquiry, thereby obtaining a persons' credit report without any permissible purpose, within the four years prior to the filing of the Complaint until the date of final judgment in this action.”
  • An FCRA False Pretense Class, defined as “[a]ll persons within the United States who had a hard credit inquiry performed on his or her credit by Defendant FFC, who had not authorized a hard inquiry, and without permissible purpose, whose credit reports were obtained under false pretenses, within the four years prior to the filing of the Complaint until the date of final judgment in this action.”
  • Florida FCRA Impermissible Purpose Class, defined as “[a]ll persons within Florida who had a hard credit inquiry performed on his or her credit by Defendant FFC, who had not authorized a hard inquiry, thereby obtaining a persons' credit report without any permissible purpose, within the four years prior to the filing of the Complaint until the date of final judgment in this action.”
  • Florida FCRA False Pretense Class, defined as “[a]ll persons within Florida who had a hard credit inquiry performed on his or her credit by Defendant FFC, who had not authorized a hard inquiry, and without permissible purpose, whose credit reports were obtained under false pretenses, within the four years prior to the filing of the Complaint until the date of final judgment in this action.”
Plaintiffs allege that they and the members of the putative classes have suffered concrete injuries, including invasion of privacy, informational injuries, reductions in credit scores, increased risk of identity theft, and an adverse effect in their ability to qualify for mortgages or as rental tenants, resulting in consequential anxiety and emotional distress. Plaintiffs seek statutory and punitive damages, injunctive relief, and attorneys' fees.
The case is Emeric, et al. v. Florida Fine Cars, LLC, Case No. 1:19-cv-20987 (S.D. Fla.).
Troutman Sanders LLP - Brooke K. ConkleAlan D. Wingfield and David N. Anthony

 

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