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TransUnion Is Sued for Sharing Consumer Data with Fake Debt Collector

Hannah Locklear | August 20, 2024

Hannah Locklear
Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Summary: TransUnion is being sued for allegedly selling consumer data to a fake debt collector, violating privacy and the Fair Credit Reporting Act in a class action lawsuit. Use SoloSuit's Debt Validation Letter to stop scammy debt collectors and protect your rights.

Jackson v Trans Union

TransUnion, one of the largest consumer credit reporting agencies in the United States, is facing a class action lawsuit for allegedly providing sensitive consumer information to a fraudulent debt collection agency. The lawsuit, filed by Connie L. Jackson in the United States District Court for the Eastern District of Virginia, accuses TransUnion of violating the Fair Credit Reporting Act (FCRA) by furnishing consumer reports to an unverified and unscrupulous debt collector.

This case highlights significant concerns regarding consumer privacy and the responsibilities of credit reporting agencies. Below, we explain the details of the case and what it could mean for consumers.

Background of the case: Jackson v Trans Union

Here’s a brief overview of the case and the parties involved:

  • Plaintiff: CONNIE L. JACKSON
  • Defendant: TRANS UNION, LLC
  • Venue: UNITED STATES DISTRICT COURT, EASTERN DISTRICT OF VIRGINIA, Richmond Division

Connie L. Jackson, the lead plaintiff in the lawsuit, is seeking justice on behalf of herself and other similarly affected individuals across the country. The complaint centers on TransUnion’s alleged failure to adhere to the strict guidelines established under the FCRA, specifically sections 1681b and 1681e(a). These sections are designed to protect consumers by ensuring that their credit information is only shared for legitimate and permissible purposes.

According to the lawsuit, TransUnion sold consumer reports to Liberty Credit Management, Inc., a fake debt collection agency involved in a fraudulent debt collection scheme. The scam was orchestrated by individuals using the names Mitchell Evans, Mitchell Steven Evans, or Mitch Evans, who operated under the guise of “Liberty Credit Management” and “Blackwater Legal Group.” These entities, which have no legitimate corporate existence, used the consumer information provided by TransUnion to send fraudulent dunning letters to unsuspecting consumers like Jackson.

Read the full Complaint here.

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TransUnion is being accused of failing to protect consumer information

The lawsuit details how TransUnion’s negligence in verifying the legitimacy of Liberty Credit Management led to the dissemination of false and harmful information to consumers. Specifically, the lawsuit alleges the following:

  1. Unlawful Furnishing of Consumer Reports: TransUnion is accused of violating section 1681b of the FCRA by furnishing consumer reports to Liberty Credit Management for purposes outside the permissible reasons outlined by the law. These reports were allegedly used to send fraudulent debt collection letters to consumers, demanding payment for non-existent debts.
  2. Failure to Implement Reasonable Procedures: The lawsuit also claims that TransUnion violated section 1681e(a) of the FCRA by failing to maintain reasonable procedures to limit the furnishing of consumer reports to legitimate purposes. The complaint argues that TransUnion did not take the necessary steps to verify the legitimacy of Liberty Credit Management, thereby allowing a scam operation to access sensitive consumer information.

  3. Invasion of Privacy: By providing consumer reports to a fraudulent entity, TransUnion is accused of invading the privacy of Jackson and countless other consumers. The lawsuit emphasizes that Congress enacted the FCRA to protect consumers’ privacy rights, and TransUnion’s actions represent a significant breach of these protections.

Blackwater Legal Group posed as a debt collector, but it was a scam

The fraudulent debt collection scheme at the center of this lawsuit is a stark reminder of the risks consumers face when their personal information falls into the wrong hands.

According to the complaint, Jackson received a scam debt collection letter in September 2022 from “Blackwater Legal Group,” a fictitious entity operating out of a fake address in Richmond, Virginia. The letter falsely claimed that Jackson owed $980.76 for a line of credit with Cashnet USA and threatened legal action, including wage garnishment and liens against her property.

The letter contained numerous abusive and deceptive statements designed to coerce Jackson into paying the alleged debt. It falsely claimed that a civil judgment would be reported to credit bureaus, that Jackson’s credit score would be affected, and that her bank account could be garnished. The letter even threatened to subpoena Jackson’s references and pursue fraudulent activity charges against her.

Despite these alarming claims, Jackson owed nothing to “Blackwater Legal Group” or Cashnet USA. The letter was part of a broader scam, enabled by TransUnion’s decision to furnish consumer reports to Liberty Credit Management without proper verification.

Stop debt collection scams by sending a Debt Validation Letter.

Debt collection scams can have a serious impact on consumer lives

The allegations against TransUnion raise serious concerns about the company’s commitment to protecting consumer data. As one of the three major credit reporting agencies in the United States, TransUnion has access to vast amounts of sensitive consumer information. The company is entrusted with the responsibility of ensuring that this information is only shared with legitimate entities for permissible purposes.

The lawsuit argues that TransUnion failed to fulfill this responsibility by allowing a fraudulent debt collector to access and misuse consumer reports. This breach of trust has significant implications for consumers, who may be vulnerable to similar scams if credit reporting agencies do not implement stricter verification processes.

Moreover, the case highlights the potential financial and emotional harm that consumers can suffer as a result of fraudulent debt collection practices, such as:

  • Damage to their credit scores
  • Unwarranted legal threats
  • Stress of dealing with false debt claims

In this context, the lawsuit seeks to hold TransUnion accountable for its alleged role in facilitating the scam.

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The TransUnion lawsuit could affect many US consumers

The lawsuit, which is seeking class-action status, has the potential to affect a large number of consumers across the United States. The class is defined as all individuals who had their consumer reports furnished by TransUnion to Liberty Credit Management or similar entities for impermissible purposes within the past five years. If successful, the lawsuit could result in significant damages awarded to the affected consumers, including statutory and punitive damages.

Under the FCRA, consumers whose rights have been violated may be entitled to statutory damages ranging from $100 to $1,000 per violation, as well as punitive damages, attorney’s fees, and court costs. Given the scope of the alleged violations, TransUnion could face substantial financial penalties if found liable.

The bottom line

The lawsuit against TransUnion underscores the importance of consumer privacy and the need for stringent oversight of credit reporting agencies. As the case progresses, it will serve as a critical test of the protections afforded to consumers under the FCRA and the accountability of credit reporting agencies when they fail to uphold these protections.

For consumers, this case is a reminder to be vigilant and proactive in monitoring their credit reports. Regularly checking credit reports for unauthorized inquiries and disputing any inaccuracies is essential to safeguarding against potential scams. As the legal battle unfolds, it will be important to watch how the courts address these serious allegations and what steps TransUnion will take to rectify the situation and prevent future breaches of consumer trust.

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