Jennifer Cushman has a permanent residence in Pennsylvania, but attended college

Question

Jennifer Cushman has a permanent residence in Pennsylvania, but attended college in Vermont. In the summer of 1993, an unknown person, possibly a member of her household in Philadelphia, applied under Ms. Cushman's name for credit cards from three credit grantors: American Express, Citibank Visa, and Chase Manhattan Bank. The person provided the credit grantors with Ms. Cushman's Social Security number, address, and other identifying information. Credit cards were issued to that person in Ms. Cushman's name, and that person accumulated balances totaling approximately $2,400 not he cards between June 1993 and April 1994. All this occurred without Ms. Cushman's knowledge. In August 1994, an unidentified bill collector informed Ms. Cushman that Trans Union (TUC) was publishing a consumer credit report indicating that she was delinquent on payments to these three credit grantors. Ms. Cushman notified TUC that she had not applied for or used the three credit cards in question and suggested that a third party had fraudulently applied for and obtained the cards. in response, a TUC clerk called American Express and Chase to inquire whether the verifying information in Amex's and Chase's records matched the information in the TUC report. The TUC clerk also asked if Ms. Cushman had opened a fraud investigation with the credit grantors. Because the information matched, and because Ms. Cushman had not opened a fraud investigation, the information remained in the TUC report. TUC was unable to contact Citibank, so TUC deleted the Citibank entry from the report. TUC's investigations are performed by clerks who are paid $7.50 per hour and are expected to perform 10 investigations per hour. TUC did not obtain records to perform a handwriting comparison. Ms. Cushman was denied credit because of the report. She filed suit under the FCRA. Did TUC violate the law? How? (Cushman v Trans Union Corp., 115 F.3d 220 (3rd Cir. 1997)).

Explanation / Answer

Let's follow the case details briefly

1) As per Ms. Cushman's case, the three credit cards from different banks are fraudulently obtained in the name of Cushman. A debt of $2400 were incurred on all the cards.

2) TUC has published a consumer credit report against Cushman for not paying the debts. Cushman notified TUC that she had not applied for any cards, neither she was aware of the fraud.

3) All the personal information provided to the bank were matching with TUC.

4) Since Cushman was not aware of the fraud, she did not apply for fraud investigation too. This was also verified by TUC and hence Ms. Cushman was denied credit

As per the above facts, TUC violated the law by not investigating properly. Let's see what are the mistakes done by TUC that violated the law.

1) The very first mistake they committed was deleting the Citybank entry from the report just because they are not reachable, keeping the other two bank entries since the rest two were available to confirm Cushman's information.

This is not the way an investigation is done. How could TUC rely on just a oral confirmation? A proper investigation needs a person to go and check the records thoroughly before taking up a decision. This means TUC did not check the background information properly.

2) The second mistake TUC committed was, it did not verify the signatures. Without verifying the physical copy of the signature, how can they come to a conclusion that Cushman has to be denied credit because of not paying the bills?

This concludes that there was a breach in the investigation which clearly shows that they have violated the law.

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