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Serious question for any lawyers out there: why isn't there more serious recourse for consumers when credit agencies commit libel? If Equifax issues a report s

Serious question for any lawyers out there: why isn't there more serious recourse for consumers when credit agencies commit libel? If Equifax issues a report saying that I owe X, and I contact them with proof that this was a fraudulent loan, and they continue issuing that report... how is this not criminal libel?

hbrav 5y ago
Serious answer (I am not a lawyer): partly because the threshold for libel is really high in the US. Partly because there is also some procedure for challenging credit reports. I'm going to try and find the blog post about it...
- hbrav 5y ago
  This: https://www.kalzumeus.com/2017/09/09/identity-theft-credit-reports/ https://www.kalzumeus.com/2017/09/09/identity-theft-credit-r...
mindslight 5y ago
Regulatory capture through the "Fair" Credit Reporting Act. Go read it - they've legislatively exempted themselves from the standard time-honored tort! Similarly to how medical providers can nonsensically create post-facto arbitrary bills instead of needing to create contracts like every other industry. Curiously, political pushes for reform never advocate for getting rid of the corrupt laws, but rather creating a whole new regulatory regime whose corporate giveaways will only become apparent down the line.
- cperciva 5y ago
  Similarly to how medical providers can nonsensically create post-facto arbitrary bills instead of sticking to contracts like every other industry. While medical providers do seem to take this to ludicrous, my understanding is that there's an underlaying common law principle concerning actions taken on behalf of someone in an emergency, and it's not just medical providers to whom this applies.
  - mindslight 5y ago
    Yes, "unjust enrichment". But it doesn't entitle one to imagine arbitrarily exaggerated prices and demand reimbursement based on them.
  - oceanghost 5y ago
    Two true stories... When my partner was pregnant, the OBGYN's office would send us small little bills despite us having paid our copay's. The bills ranged from $40-$200 and did not indicate what the bill was for, listing it as something generic "misc services" for instance. I called down there once and asked what the bill was for and the person I spoke to could not tell me. So, I didn't pay any of them switched OBGYN's. Second story, the partner had incredible stomach pain... we ended up in the ER, paid the co-pay, etc. A couple months later I get a bill for 1k for seeing an out of network doctor. I call the insurance company and ask if that's correct and this is what they told me: That the hospital had a habit of sending out fraudulent bills, and that they had a legal settlement with them that they weren't even allowed to contact the patients directly. It was literally just a cash grab.
- InefficientRed 5y ago
  15 U.S. Code § 1681e(b) reads "Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." I know that courts move slowly and judges are often depressingly technological illiterate, but I have absolute confidence that I could put together an incredibly convincing panel of experts who would define "reasonable procedures" in a way that would run wholly afoul of the SOP of the major credit reporting agencies.
  - mindslight 5y ago
    So don't let me stop you? In general courts are going to have their own standards for such things that differ from your plain language reading, and a stack of paperwork from the surveillance companies' auditors will suffice to meet it. But by all means, go for it! By my quick non-attorney reading I think you'll be arguing under 1681o, and still stuck showing actual financial damages for having been denied a loan or whatever. Point being they've legislated themselves out of the straightforward tort of libel by 1681h (e).
jgeada 5y ago
Being brutally honest: because Equifax and similar agencies always engage in politics. They lobby politicians, they have people on staff on alert should any legislation related to this topic come up, etc. Angering these companies carries political costs. The typical individual is not engaged in the political process, and if they pay attention to this subject, they do so for an ephemeral amount of time. Individual voter's anger has no consequence. Our system is optimized to privatize gains and socialize losses.
encryptluks2 5y ago
Because the court system has become a pay to play scheme where if you have more money than your opponent, the courts will provide an advantage to the one who is profiting from corruption than the ones being taken advantage of. Even representing yourself pro se does not come without a significant burden where judges will clearly tell you that you are disadvantaging yourself by doing so, and the laws are so complex that often they could care less what is fair rather than what a previous judge decided a long time ago back when racial discrimination was prominent.
sokoloff 5y ago
I don’t think Equifax is saying that “you owe X to lender Y”. They’re saying that “lender Y has reported that you owe X”.
techsupporter 5y ago
One reason is because the Supreme Court held in late 2020 that unless you can prove you were actually--not theoretically--harmed by an exact instance of an entity covered under the Fair Credit Reporting Act, you do not have standing to sue. > Held: Only a plaintiff concretely harmed by a defendant’s violation of the Fair Credit Reporting Act has Article III standing to seek damages against that private defendant in federal court. Per the Court, this means something like you were provably denied credit on the basis of the incorrect reporting, and you either didn't have an opportunity to explain yourself or your explanation was not accepted in favor of the information from the credit reporting agency's information. This is a very, very high bar to clear and is made even more difficult by the fact that almost any agreement of substance includes a mandatory binding arbitration clause. Thus, you don't even get the chance to go to court. (Many businesses lauded here on Hacker News have such clauses, so even the "good" entrepreneurs can't resist taking away rights to the courthouse from their users.) More coverage and links to the decision at SCOTUSblog: https://www.scotusblog.com/case-files/cases/transunion-llc-v-ramirez/ https://www.scotusblog.com/case-files/cases/transunion-llc-v...
- benpbenp 5y ago
  I'm not sure that ruling really has the impact you say it does here. That ruling held that of the 8,000 plaintiffs in the class action suit, only 1,853 had standing because their incorrect credit reports were actually sent to businesses. The remaining 6,332 did not have standing because although their files were incorrect, this incorrect information was never transmitted to anyone (I am getting this from scotusblog coverage). I wouldn't call this a very, very high bar to clear.

hbrav 5y ago

Serious answer (I am not a lawyer): partly because the threshold for libel is really high in the US. Partly because there is also some procedure for challenging credit reports. I'm going to try and find the blog post about it...

hbrav 5y ago
This: https://www.kalzumeus.com/2017/09/09/identity-theft-credit-reports/ https://www.kalzumeus.com/2017/09/09/identity-theft-credit-r...

mindslight 5y ago

Regulatory capture through the "Fair" Credit Reporting Act. Go read it - they've legislatively exempted themselves from the standard time-honored tort! Similarly to how medical providers can nonsensically create post-facto arbitrary bills instead of needing to create contracts like every other industry. Curiously, political pushes for reform never advocate for getting rid of the corrupt laws, but rather creating a whole new regulatory regime whose corporate giveaways will only become apparent down the line.

cperciva 5y ago
Similarly to how medical providers can nonsensically create post-facto arbitrary bills instead of sticking to contracts like every other industry. While medical providers do seem to take this to ludicrous, my understanding is that there's an underlaying common law principle concerning actions taken on behalf of someone in an emergency, and it's not just medical providers to whom this applies.
- mindslight 5y ago
  Yes, "unjust enrichment". But it doesn't entitle one to imagine arbitrarily exaggerated prices and demand reimbursement based on them.
- oceanghost 5y ago
  Two true stories... When my partner was pregnant, the OBGYN's office would send us small little bills despite us having paid our copay's. The bills ranged from $40-$200 and did not indicate what the bill was for, listing it as something generic "misc services" for instance. I called down there once and asked what the bill was for and the person I spoke to could not tell me. So, I didn't pay any of them switched OBGYN's. Second story, the partner had incredible stomach pain... we ended up in the ER, paid the co-pay, etc. A couple months later I get a bill for 1k for seeing an out of network doctor. I call the insurance company and ask if that's correct and this is what they told me: That the hospital had a habit of sending out fraudulent bills, and that they had a legal settlement with them that they weren't even allowed to contact the patients directly. It was literally just a cash grab.
InefficientRed 5y ago
15 U.S. Code § 1681e(b) reads "Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." I know that courts move slowly and judges are often depressingly technological illiterate, but I have absolute confidence that I could put together an incredibly convincing panel of experts who would define "reasonable procedures" in a way that would run wholly afoul of the SOP of the major credit reporting agencies.
- mindslight 5y ago
  So don't let me stop you? In general courts are going to have their own standards for such things that differ from your plain language reading, and a stack of paperwork from the surveillance companies' auditors will suffice to meet it. But by all means, go for it! By my quick non-attorney reading I think you'll be arguing under 1681o, and still stuck showing actual financial damages for having been denied a loan or whatever. Point being they've legislated themselves out of the straightforward tort of libel by 1681h (e).

jgeada 5y ago

Being brutally honest: because Equifax and similar agencies always engage in politics. They lobby politicians, they have people on staff on alert should any legislation related to this topic come up, etc. Angering these companies carries political costs. The typical individual is not engaged in the political process, and if they pay attention to this subject, they do so for an ephemeral amount of time. Individual voter's anger has no consequence. Our system is optimized to privatize gains and socialize losses.

encryptluks2 5y ago

Because the court system has become a pay to play scheme where if you have more money than your opponent, the courts will provide an advantage to the one who is profiting from corruption than the ones being taken advantage of. Even representing yourself pro se does not come without a significant burden where judges will clearly tell you that you are disadvantaging yourself by doing so, and the laws are so complex that often they could care less what is fair rather than what a previous judge decided a long time ago back when racial discrimination was prominent.

sokoloff 5y ago

I don’t think Equifax is saying that “you owe X to lender Y”. They’re saying that “lender Y has reported that you owe X”.

techsupporter 5y ago

One reason is because the Supreme Court held in late 2020 that unless you can prove you were actually--not theoretically--harmed by an exact instance of an entity covered under the Fair Credit Reporting Act, you do not have standing to sue. > Held: Only a plaintiff concretely harmed by a defendant’s violation of the Fair Credit Reporting Act has Article III standing to seek damages against that private defendant in federal court. Per the Court, this means something like you were provably denied credit on the basis of the incorrect reporting, and you either didn't have an opportunity to explain yourself or your explanation was not accepted in favor of the information from the credit reporting agency's information. This is a very, very high bar to clear and is made even more difficult by the fact that almost any agreement of substance includes a mandatory binding arbitration clause. Thus, you don't even get the chance to go to court. (Many businesses lauded here on Hacker News have such clauses, so even the "good" entrepreneurs can't resist taking away rights to the courthouse from their users.) More coverage and links to the decision at SCOTUSblog: https://www.scotusblog.com/case-files/cases/transunion-llc-v-ramirez/ https://www.scotusblog.com/case-files/cases/transunion-llc-v...

benpbenp 5y ago
I'm not sure that ruling really has the impact you say it does here. That ruling held that of the 8,000 plaintiffs in the class action suit, only 1,853 had standing because their incorrect credit reports were actually sent to businesses. The remaining 6,332 did not have standing because although their files were incorrect, this incorrect information was never transmitted to anyone (I am getting this from scotusblog coverage). I wouldn't call this a very, very high bar to clear.