Upstate judge tosses out suit against credit agencies

An Upstate judge has tossed out a class action lawsuit against the nation's top three credit reporting agencies — a legal action that the judge said had involved a request for as much as $4 billion in damages.
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U.S. District Judge Ross Anderson's dismissal ended — at least for now — a three-year legal battle over whether Equifax Information Services, Experian and TransUnion wrongly allowed a credit provider's accounting practices to raise the cost of borrowing money for millions of people.

In his order, Anderson wrote that the class of 4 million plaintiffs that stretched from West Virginia to South Carolina couldn't prove that they were harmed by the practice or to what extent. The suit had sought $1,000 for each plaintiff, Anderson wrote.

“Had we not been successful, the result would have been devastating to the defendants,” former 4th U.S. Circuit Court of Appeals Chief Judge Billy Wilkins, who represented the agencies, said Wednesday.

James Ledlie, an attorney for the plaintiffs, said Wednesday his team is studying Anderson's decision and will decide what to do next. However, Ledlie said that forthcoming federal regulations governing reporting of credit limits could achieve the lawsuit's original purpose.

In nearly identical complaints filed in Greenville district federal court, the plaintiffs alleged that beginning in at least 2004, the agencies issued inaccurate information by failing to force one of the nation's largest credit providers, Capital One Financial Corp., to report credit limits on individual credit card accounts.

The information that credit reporting agencies gather is used to determine a credit score, which lenders use to determine the likelihood that a borrower can repay a loan.

At issue was how the credit reporting agencies would leave blank or report as $0 the "credit limit" entry for Capital One accounts provided in their reports. The lack of information caused credit scoring software to reflect an artificially lower credit limit, the complaints alleged, misrepresenting exactly how much available credit a cardholder had actually used.

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