Ruling Issued Today On Wrongful Reporting By Equifax - "Date of Last Activity"
Today the Seventh Circuit Court of Appeals issued a decision styled Gillespie v. Equifax which held that the way that Equifax reports the "Date of Last Activity" potentially violates the Fair Credit Reporting Act.
The plaintiffs defaulted on some debts and they were sold to a debt buyer collection agency. The issue in the case concerned the date of last activity and the rule against keeping negative items for more than seven years (actually seven and a half years - we'll address this in another post). The way Equifax reports the information, if a consumer makes a payment after an account becomes delinquent, then the date of last activity is the date the last payment was made. This could extend the seven year period in violation of the law.
As the court put it,
More troubling is the concern that Equifax’s
exclusive use of the Date of Last Activity could effectively
allow Equifax the opportunity to keep delinquent accounts
in the credit file past the seven and one-half year limitation
of § 1681c(c)(1). The Date of Last Activity that previously
listed the date of delinquency in the account will be
replaced should the consumer make an intervening
payment on the account. The date of the intervening
payment would become the new Date of Last Activity used
in the seven and one-half year calculation. However, the
negative credit history relating to the prior delinquency
would presumably remain within the consumer’s credit
file despite the fact that the consumer faces a new seven
and one-half year period before the information is removed
from her file.
Equifax has not provided an explanation for why it posts
both positive payment information and negative delinquency
data within the Date of Last Activity field. Even
more damning to Equifax is the fact that the field immediately
next to the Date of Last Activity is a field
labeled “Date Maj. Dlqu. Rptd.” Equifax defines the Date
Maj. Dlqu. Rptd. field as “the date the first major delinquency
was reported.” Although the Date Maj. Dlqu. Rptd.
field appears to be available for use on Equifax’s form, it
remains blank on the disclosures provided to the plaintiffs
pursuant to § 1681g(a)(1).
This decision was not "on the merits" but was a ruling by the appellate court to tell the trial court to resume the case. We'll watch and see how this case plays out but it does show how often the credit reports are set up in a way to harm consumers of this state and all other states.
The firm that handled this case for the consumers was Pietz Law Office out of Pittsburgh, PA. Congratulations to James Pietz for bringing this important case!
