April 27, 2007, Philadelphia, PA -

Yesterday, a federal court jury in the United States District Court for the Eastern District of Pennsylvania returned an $800,000 verdict against the Trans Union credit reporting agency in a fair credit reporting case. The verdict is the largest known of its kind in a Pennsylvania federal court.

Trans Union, LLC is one of the country's "Big Three" credit reporting agencies, and has one of its main operations in Crum Lynne, Pennsylvania . Trans Union reported mixed information belonging to a suspected narcotics trafficker on consumer-plaintiff Sandra Cortez's credit report, and failed to fix the error despite several disputes. The jury awarded $50,000 in emotional distress damages, and $750,000 in punitive damages.

Plaintiff Sandra Cortez was represented by the law firm of Francis & Mailman, P.C. Trans Union was represented by the law firm of Kogan, Trichon & Wertheimer, P.C. Both law firms are located in Philadelphia, PA.

The case of Cortez v. Trans Union, LLC, Civ. No. 05-5684 was presided over by the Honorable John P. Fullam.

Information regarding the case and verdict may be obtained by contacting Jim Francis, Mark Mailman or John Soumilas at the address and telephone number listed above, or by emailing any inquiries to jfrancis@consumerlawfirm.com.

Related Coverage:

The Legal Intelligencer
By Shannon P. Duffy
April 30, 2007

A federal jury on Thursday awarded $800,000 to woman who claimed that a credit-reporting agency falsely branded her as a Colombian drug dealer when it confused her with someone on the U.S. Treasury Department's watchlist of known narcotics traffickers.

Plaintiff Sandra Cortez, 62, claimed that the error created humiliating ordeals when she was trying to buy a car and later when she was renting an apartment, but that Trans Union ignored her repeated pleas to have the erroneous information taken off her credit report.

After a three-day trial, the jury in Cortez v. Trans Union found that Trans Union had violated four provisions of the Fair Credit Reporting Act and awarded Sandra Cortez $50,000 in compensatory damages and $750,000 in punitive damages.

The jury also apparently wanted to make sure that its verdict sent a clear message. On the verdict form, below the monetary awards, the jury wrote: "The Trans Union business process needs to be completely revamped with much more focus on customer service and the consumer."

According to court papers, Cortez, who hails from Highlands Ranch, Colo., first learned of the error when she was purchasing a car and was told that her credit report included an "alert" that she was a match for someone listed by the Treasury Department's Office of Foreign Assets Control.

Cortez claimed that a manager at the car dealer threatened to call the FBI to report her, but that she was ultimately able to convince the dealer that she was not the woman on the government list.

Court records show that the OFAC list includes a "Sandra Cortes Quintero," who is believed by the government to be associated with a drug cartel in Cali, Colombia.

Cortez's lawyers - James A. Francis, Mark D. Mailman and John Soumilas of Francis & Mailman - said Trans Union's automated processes put the alert on Cortez's credit report even though the Colombian woman is 27 years her junior and has a different last name.

But the credit report didn't include the year of birth, they said, so anyone who looked at it would assume that Cortez had been properly identified as a "match" for a drug dealer.

The OFAC list, which is publicly available on the Treasury Department's Web site, includes about 3,300 groups and individuals, mostly foreign nationals, who are designated as terrorists or drug traffickers.

Long used by banks and other financial institutions to block financial transactions of drug dealers and other criminals, the list is now seeing wider use due to an executive order signed in the wake of the Sept. 11 terrorist attacks.

According to a report by the Lawyers' Committee for Civil Rights of the San Francisco Bay Area, the list is now used by many businesses to screen applicants for home and car loans and apartments.

The report, issued last month, said "few people in the United States are actually on the list. But because many names on the OFAC list are common Muslim or Latino names - such as 'Mohammed Ali' or 'Carlos Sanchez' - people in this country with similar names are increasingly getting snagged. Even a shared first or middle name, including some of the most common names in the world, can lead to consumer transactions being denied or delayed."

Under the law, anyone who does business with a person or group on the list risks penalties of up to $10 million and 10 to 30 years in prison.

Trans Union recently began offering an "OFAC adviser" feature in its credit reports, a service it touts as offering "the most comprehensive international list of known terrorists and criminals" and ensuring that it minimizes "false positives" through "unique" matching technology.

But Cortez's lawyers say she was just one of the victims of Trans Union's automated process which attaches an alert to a credit report whenever a consumer's name is similar to one on the list.

Francis said the list includes many common names, such as Charles Taylor, the former president of Liberia.

And Trans Union, he said, is not doing enough to ensure that innocent Americans don't have a terrorist or drug trafficker alert attached to their credit reports.

After the initial ordeal in the car dealership, Cortez claimed that she made repeated efforts to have the alert removed from her credit report, but that Trans Union failed to do so - despite assuring her once that it was no longer there.

In its verdict, the jury concluded that Trans Union had violated four provisions of the Fair Credit Reporting Act by not conducting a proper initial investigation; by not making proper disclosures to Cortez when she complained; by failing to note her dispute in subsequent reports; and by failing to have procedures that would ensure "maximum possible accuracy" in its reports.

The jury also found that the first three of those violations were "willful."

For Chicago-based Trans Union, the jury's finding of willfulness meant that it was exposed to possible punitive damages in the second phase of the trial.

In his closing argument, Soumilas told the jury that Cortez didn't suffer any economic harm as a result of Trans Union's error, but instead was seeking only to be compensated for the ordeals and humiliation she suffered.

On the issue of punitive damages, Soumilas didn't suggest any specific figure, but told the jury that Trans Union has a net worth of $939 million.

Trans Union's lawyers - Bruce S. Luckman and Timothy P. Creech of Kogan Trichon & Wertheimer - had argued in court papers that such an erroneous alert wasn't covered by the Fair Credit Reporting Act because it is not financial information.

But at trial, U.S. District Judge John P. Fullam rejected that argument and allowed the claim to go to the jury.

Neither Luckman nor Creech could be reached for comment on Friday.