Court Upholds $1 Million Damages Award Against Credit Reporting Service

A federal court in California recently upheld a $1 million verdict against Equifax Information Services. The case involves an individual whose identity was stolen while he was undergoing cancer treatment. Shortly thereafter, he received letters from financial institutions thanking him for credit applications that he submitted. Plaintiff’s thief was charged and convicted with a criminal violation of HIPAA, since the thief was a medical professional at the cancer center where the plaintiff was undergoing treatment. Plaintiff alleged that Equifax also was at fault, and willfully violated the Fair Credit Reporting Act by failing to properly reinvestigate and accurately report the status of the disputed credit card applications, as required by the FCRA. A jury awarded the plaintiff over $1 million in damages. The court found that the evidence presented at trial was sufficient to sustain the award for damages, and punitive damages.

TIP: Companies should carefully consider their obligations to protect sensitive personal information, as they may find themselves accused of mistreatment in the event of a data breach by a third party.