On February 24, 2023, the District Court of New Jersey ruled in favor of Marc Stephens in the case titled Marc Stephens vs Equifax, et al. Stephens filed a Federal Civil Lawsuit against Experian, Equifax, Synchrony Bank, and PayPal under the Fair Credit Reporting Act (FCRA) seeking an injunction, damages, and equitable relief for violations of FCRA regarding disputes over allegedly false reporting on Stephens’ credit reports, which dropped his credit score from 820 to 680. The case included several causes of action, including Defamation of Character, Willful Noncompliance with FCRA, Negligent Noncompliance with FCRA, Common Law Fraud, Breach of Contract, and Intentional Infliction of Emotional Distress.
The dispute arose when PayPal withdrew money from Stephens’ account without permission on December 6, 2020. After several attempts to correct the error, PayPal shut down Stephens’ account, making it impossible for him to withdraw money and pay bills. PayPal held over $40,000 initially and then $1,500 for six months, followed by a hold on Stephens’ deposits of over $21,000. PayPal also switched Stephens’ billing to Automatic Pay without permission, leading to fees being withdrawn from his account, including a $375 transaction from PayPal. Stephens was not aware of PayPal’s User Agreement, which stated that PayPal combined users’ funds and invested them to generate “interest revenue.”
Stephens requested the original signature on the contract for a Synchrony Bank/PayPal MasterCard account on his credit report. Transunion deleted the items, while Experian and Equifax ignored his request and switched the account numbers, creating two new accounts. The creditor Defendant Synchrony Bank’s fraud department acknowledged the inaccurate information on his credit reports with Experian and Equifax but failed to delete the accounts.
Equifax, represented by Robert T. Szyba, Esq. of Seyfarth Shaw LLP, filed a Motion to dismiss Stephens’ complaint on July 22, 2022, while PayPal, represented by Ryan L. DiClemente, Esq. and Kellie A. Lavery, Esq., of Saul Ewing Arnstein & Lehr LLP, filed a motion to compel arbitration or dismiss Stephens’ complaint in the alternative. Synchrony Bank, represented by Pawel Maziarz, Esq., of Reed Smith LLP, filed a motion to dismiss Stephens’ complaint with prejudice. Despite being served with notice, Experian never responded to the Complaint.
On February 24, 2023, Federal Judge of the District Court of New Jersey, MADELINE COX ARLEO ruled in favor of Marc Stephens, stating that the complaint satisfied the requirement of demonstrating that Synchrony and/or PayPal furnished inaccurate information to the consumer reporting agency and established that Stephens notified them of the dispute as required by the FCRA. The FCRA claims may proceed. Despite not being a lawyer, Stephens demonstrated a high level of legal intelligence in the case, impressing the Defendant’s legal team with his arguments. Judge Arleo had also ruled in favor of Stephens in his $6 million case against the City of Englewood and the Englewood Police Department.
The ruling, in this case, sets an important precedent for consumers who are wrongly accused of debt and are unable to get their credit reports corrected. It is a reminder that filing a federal civil lawsuit to protect your rights under the FCRA is an effective tool for ensuring that inaccurate information on credit reports is removed or corrected. The effectiveness of this ruling will be seen in the years to come. Other consumers facing similar issues will likely look to this ruling for guidance as they attempt to fight for their rights under the FCRA.
This case demonstrates the importance of being an informed consumer and knowing your rights under FCRA. Consumers should familiarize themselves with their rights and use them to protect themselves from unfair billing practices. Finally, they should always document any communication with credit bureaus regarding disputes of inaccurate information on their credit reports and seek legal advice if necessary. With this case setting an important precedent for the FCRA, consumers can be more confident in protecting their rights under the law. By understanding their rights, they can hold creditors accountable and make sure their credit reports are accurate.
With this ruling, Marc Stephen’s legal battle with PayPal and Synchrony Bank is a reminder that consumers should always review contracts carefully, dispute inaccurate information on their credit reports in writing, and seek legal advice if needed. The case has set a precedent for consumers to assert their rights and hold creditors accountable for wrongfully furnishing inaccurate information on their credit reports. The case also serves as a reminder that there are legal remedies available for consumers who have been victims of unfair billing practices. Consumers need to know their rights to protect themselves from potential credit report inaccuracies. By being informed and taking advantage of their rights under the FCRA, consumers can ensure that their credit reports are accurate and up-to-date. This case serves as an important reminder for all consumers to stay vigilant in monitoring their credit reports and take action when necessary to protect themselves from unfair billing practices.