California Coast Credit Union Reporting of Discharged Debt Class Action

This class action brings suit under two credit reporting laws, the federal Fair Credit Reporting Act (FCRA) and the California Consumer Credit Reporting Agencies Act (CCCRAA). According to the complaint, California Coast Credit Union (CCCU) provides erroneous information to credit reporting agencies about financial obligations have been “closed and discharged.”

Plaintiff Martin Trim incurred a financial obligation when he took out a loan from CCCU. On September 20, 2018, he filed for a Chapter Seven Bankruptcy in the US Bankruptcy Court in the Southern District Court of California. The debt to CCCU was discharged via a court order issued on December 18, 2018. According to the complaint, the order also informed CCCU that the debt had been discharged. 

After that, the complaint says, “the balance on the Debt should have been listed as $0.00 on all consumer reports and the reports should have stated that the account was ‘closed.’”

However, in February 2019, Trim checked his Experian report and found that CCCU had reported a balance of $4,422 owed to it for the debt. 

The complaint asserts that the debt was not the subject of any reaffirmation agreement (where the filer in a bankruptcy agrees to pay a debt despite the bankruptcy), nor was it part of an adversary proceeding in which CCCU tried to make the debt incapable of being discharged. In other words, there was no discernable reason why the debt should still be showing on Trim’s report.

Trim therefore sent Experian a written dispute explaining the inaccurate information, along with a copy of the Chapter Seven discharge order. Experian then presumably told CCCU of the dispute. However, the complaint claims that CCCU continues to provide incorrect information to Experian.

The law requires that Experian and CCCU conduct an investigation into the account on the report. However, CCCU did not correct the erroneous information. Trim believes that CCCU uncovered the error in its investigation but willfully refused to correct it; or it simply did not bother to investigate. The complaint claims that Trim’s “credit report continues to be inaccurate to date as to the status and remaining balance due to” CCCU.

The erroneously-reported debt can affect Trim’s ability to obtain credit in the future, as creditors take into consideration a person’s present debt burden when decided whether or not to extend credit.

Two classes have been proposed for this action.

  • Class A is all persons in the US who disputed CCCU’s credit reporting, furnished to Experian, where the disputed items were not properly investigated and/or corrected, between November 19, 2017 and November 19, 2019.
  • Class B is all persons with California addresses who have or had an account with CCCU which was discharged or closed but where CCCU reported a remaining balance, between November 19, 2017 and November 19, 2019.
Article Type: Lawsuit
Topic: Consumer

Most Recent Case Event

California Coast Credit Union Reporting of Discharged Debt Complaint

November 19, 2019

This class action brings suit under two credit reporting laws, the federal Fair Credit Reporting Act (FCRA) and the California Consumer Credit Reporting Agencies Act (CCCRAA). According to the complaint, California Coast Credit Union (CCCU) provides erroneous information to credit reporting agencies about financial obligations have been “closed and discharged.”

california_coast_cu_discharged_debt_fcra_compl.pdf

Case Event History

California Coast Credit Union Reporting of Discharged Debt Complaint

November 19, 2019

This class action brings suit under two credit reporting laws, the federal Fair Credit Reporting Act (FCRA) and the California Consumer Credit Reporting Agencies Act (CCCRAA). According to the complaint, California Coast Credit Union (CCCU) provides erroneous information to credit reporting agencies about financial obligations have been “closed and discharged.”

california_coast_cu_discharged_debt_fcra_compl.pdf
Tags: Credit Reports, Discharged/invalid debts on credit report, Not Reporting to Credit Agencies Debt Discharge in Bankruptcy