Credit bureaus sued for showing paid home equity loan as overdue

SHERMAN - After discovering a paid-off lien was still showing overdue on his credit reports, a Texas resident has filed a lawsuit against the credit bureaus alleging violations of the Fair Credit Reporting Act.

Jeffrey Ray filed suit against Wells Fargo Bank N.A., Trans Union, Equifax Information Services, Experian Information Solutions Inc. and CSC Credit Services Inc. on Feb. 23 in the Eastern District of Texas, Sherman Division.

According to the lawsuit, Ray and his wife obtained a home equity extension of credit on Jan. 28, 2004. The purpose of the loan was to refinance an existing loan and lien against Ray's homestead property.

In June 2010, the lien was voided because it failed to comply with restrictions under the Texas Constitution. Ray states Wells Fargo released the lien in August 2010 for full payment.

However, Ray's credit report show the lien as maintaining a balance and that payment is past due. Attempting to correct the error, Ray submitted evidence that the lien was paid in full to the credit bureaus and requested a reinvestigation. All three bureaus allegedly verified the debt as outstanding and overdue.

Due to the error on his credit reports, Ray states he was denied a credit card and insurance.

The defendants are accused of violating the Fair Credit Reporting Act by not conducting a reasonable reinvestigation and for failing to remove inaccurate information from Ray's credit report.

The defendants are also accused of defamation for issuing false statements which injured Ray's reputation and exposed Ray to financial injury.

The plaintiff is seeking damages for actual damages, statutory damages, punitive damages, loss of earning capacity and lost profits, court costs, attorney fees and interest.

Ray is represented by James C. Mosser and Alexis K. Caughey of Mosser Law in Dallas. A jury trial is requested.

U.S. District Judge Michael H. Schneider is assigned to the case.

Case No. 4:11-cv-00091