Xactus Facing Class Action Over Alleged Violations of Consumer Reporting Law

New to ClassAction.org? Read our Newswire Disclaimer

A proposed class action accuses consumer reporting agency Xactus of violating federal law by failing to take reasonable steps to ensure the “maximum possible accuracy” of its reports.

Want to stay in the loop on class actions that matter to you? Sign up for ClassAction.org’s free weekly newsletter here.

Specifically, the 11-page lawsuit says the Pennsylvania-based company, which was formerly known as Credit Plus, LLC, has run afoul of the Fair Credit Reporting Act (FCRA) by failing to reconcile conflicting data obtained from other credit reporting agencies and publishing inaccurate account information in its reports.

Despite the FCRA’s requirement that Xactus maintain procedures to ensure utmost accuracy of the data it assembles about consumers, the company has compiled and published inconsistent information into the reports it sells to customers, the suit alleges.

The plaintiff, a New Jersey resident, says he applied for a residential mortgage loan in 2021. Before doing so, the man paid in full an outstanding balance of $2,147 on a charged-off Capital One account, the case shares.

In November 2021, Xactus prepared a report about the plaintiff from information it obtained from three other credit reporting agencies, the complaint relays. According to the filing, the report included inaccurate data about the man’s Capital One account.

For one, the company incorrectly reported that the charged-off account had a past due balance of $2,147, the lawsuit claims.

The suit contests that Xactus should have known this data was inaccurate because, “as a common-sense matter, a charged-off account with a $0 balance cannot have a past due amount of $2,147.”

Per the case, the agency also incorrectly reported a $64 monthly payment requirement with respect to the allegedly false past due balance—an inaccuracy that the complaint argues should have been caught by the defendant, as “accounts that have been paid in full cannot have ongoing, future payment obligations.”

Finally, the filing alleges that although Xactus obtained conflicting information about the Capital One account from the three credit reporting agencies—two of which correctly reported the account as charged-off with a past due amount of $0—the defendant failed to reconcile the inconsistent data it received from its sources.

The allegedly erroneous reporting damaged the plaintiff’s credit reputation and creditworthiness, the lawsuit contends.

“This harmful, inaccurate reporting was also a substantial factor in his inability to secure a residential mortgage loan on the most favorable terms available and decreased [the plaintiff’s] mortgage borrowing capacity,” the suit claims.

By failing to ensure it reports accurate consumer information, Xactus has acted in “grossly negligent disregard” for customers’ rights and its duties under the FCRA, the case charges.

The lawsuit looks to represent anyone in the United States or its territories about whom Xactus merged account information that had different balances from multiple consumer reporting agencies into a report that it sold to a third party at any time since November 16, 2018. The suit also seeks to cover those about whom Xactus prepared and sold a report to a third party that contained a payment amount that the defendant had automatically calculated, or that contained an account for which the company reported both a past due amount or balance owing and a charge-off status.

Get class action lawsuit news sent to your inbox – sign up for ClassAction.org’s free weekly newsletter here.