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Punitive damages under Fair Credit Reporting Act

In Saunders v. Equifax Info. Servs., LLC, the U.S. District Court for the Eastern District of Virginia recognized that the typical punitive damage analysis does not fit within the context of a Fair Credit Reporting Claim where the Plaintiff elects, and is awarded, statutory damages. The district court identified four factors consistent with the opinions of the Supreme Court, but reflecting the realities of a Fair Credit Reporting violation: (1) whether a plaintiff was financially vulnerable; (2) whether the conduct involved repeated actions or was an isolated incident; (3) whether there were factors mitigating the reprehensibility of the defendant's conduct; and whether the punitive damages award was properly based on an award of compensatory, as opposed to statutory, damages.

In the case before it, the plaintiff, Mr. Saunders, had purchased vehicle using a loan from BB&T. After purchasing the vehicle Mr. Saunders never received a payment coupon book from BB&T (in contravention of BB&T's own internal procedures). Despite this, Mr. Saunders attempted to make a payment on the loan and was turned away by BB&T, being told that they had no record of his loan. Mr. Saunders then received a copy of the title of the vehicle which did not indicate the existence of a loan. Shortly after this, BB&T "booked" the loan and then sent a demand to Mr. Saunders - for the full balance, along with penalties and interest. When Mr. Saunders was unable to pay, BB&T repossessed his car and sold it.

The court concluded that based on the egregiousness of BB&T's actions, and that the stated purpose of the FCRA, to protect consumers from inaccurate information in consumer reports by establishing credit reporting procedures which utilize correct, relevant and up-to-date information in a confidential and responsible matter, the Court decided not to reduce the $80,000 in punitive damages awarded to the Mr. Saunders, despite only $1,000 in statutory damages. The Court reasoned that the jury's award did not enter a zone of arbitrariness as it reasonably punished BB&T for particularly egregious conduct that harmed the plaintiff rather than simply for being an unsavory business.

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