1

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

SCOTT J. SAGARIA (BAR # 217981)

ELLIOT W. GALE (BAR #263326)

JOE B. ANGELO (BAR #268542)

SCOTT M. JOHNSON (BAR #287182)

SAGARIA LAW, P.C.

2033 Gateway Place, 5

th Floor 

San Jose, CA 95110

408-279-2288 ph

408-279-2299 fax

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA – SAN JOSE DIVISION

 CASE NO. 

COMPLAINT FOR DAMAGES:

1. Violation of Fair Credit Reporting Act;

2. Violation of California Consumer Credit 

Reporting Agencies Act;

LACY ROSE,

Plaintiff,

v.

Equifax, Inc.; TransUnion, LLC; First Data 

Merchant Services, LLC; TD Bank USA, 

National Association and DOES 1 through 

100 inclusive,

Defendants.

COMES NOW Plaintiff LACY ROSE, an individual, based on information and belief, to allege 

as follows: 

INTRODUCTION

1. This case arises under the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(b) and the 

California Consumer Credit Reporting Agencies Act, California Civil Code 

§1785.25(a). Plaintiff seeks redress for the unlawful and deceptive practices committed 

by the Defendants in connection with their inaccurate, misleading, or incomplete 

reporting of Plaintiff’s debt included in Plaintiff’s Chapter 13 bankruptcy. 

2. The United States Congress has found the banking system is dependent upon fair and 

accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the 

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 1 of 19
2

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

banking system, and unfair credit reporting methods undermine the public confidence, 

which is essential to the continued functioning of the banking system. 

3. There exists today in the United States a pervasive and fundamental misunderstanding 

about the long term impact filing a consumer bankruptcy has on a consumer’s credit 

worthiness. Specifically, many consumers believe that because a bankruptcy can be 

reported on their credit report for ten years their credit worthiness will be ruined for the 

same length of time. This is not true. 

4. The majority of consumer Debtors who file consumer bankruptcy do so to raise their 

FICO Score and remedy their poor credit worthiness.

5. It is entirely possible for consumer Debtors to have over a 700 FICO Score within as 

little as 12 months after filing a consumer bankruptcy (Chapter 7 or Chapter 13). 

6. Creditors and lending institutions are aware of the misconception that filing a consumer 

bankruptcy destroys a consumer’s credit worthiness for ten years.

7. In an effort to perpetuate the aforementioned bankruptcy myth, creditors intentionally 

and routinely ignore credit reporting industry standards for accurately reporting 

bankruptcies and debts included in those bankruptcies in an effort to keep consumers’ 

credit scores low and their interest rates high. 

8. Creditors know that by deviating from recognized credit reporting standards consumers 

will have difficulty raising their credit scores and improving their credit worthiness. 

9. These credit reporting issues are most prevalent in Chapter 13 bankruptcy filings. 

10. Consequently, in the United States today it is objectively worse for consumers’ credit 

worthiness to file Chapter 13 and pay back some or all of their debt, as opposed to 

filing Chapter 7 liquidation where Creditors generally receive nothing. 

11. This was not the intent of Congress when enacting the Fair Credit Reporting Act and 

the Bankruptcy Abuse Prevention and Consumer Protection Act. 

JURISDICTION & VENUE

12. Plaintiff re-alleges and incorporates herein by this reference the allegations in each and 

every paragraph above, fully set forth herein. 

13. This Court has jurisdiction under 28 U.S.C. §§ 1331, 1337, and 1367, and 15 U.S.C. § 

1681

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 2 of 19
3

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

14. This venue is proper pursuant to 28 U.S.C. §1391(b). 

GENERAL ALLEGATIONS

15. Plaintiff alleges that each and every defendant data furnisher was included in Plaintiff’s 

Chapter 13 bankruptcy filing.

16. Plaintiff alleges that each and every Defendant is familiar with credit reporting industry 

standards and subscribes thereto. 

17. Plaintiff alleges that each and every Defendant understands that deviation from credit 

reporting industry standards can and often does result in denial of credit, higher interest 

rates, and prompts those making credit decisions to draw a more negative inference 

from the reported data than if the Defendant reported in accordance with the recognized 

industry standard.

18. Plaintiff alleges that all actions alleged herein by Defendants were done knowingly, 

intentionally, and in reckless disregard for credit reporting industry standards in an 

attempt to purposefully undermine Plaintiff’s ability to reorganize and repair Plaintiff’s

FICO Score. 

19. In the alternative Plaintiff alleges that each and every Defendant’s actions was the 

result of reckless policies and procedures that inevitably led to inaccurate, misleading, 

or incomplete credit reporting. 

FICO, Inc. 

20. FICO is a leading analytics software company with its principal headquarters located in 

San Jose California. FICO has over 130 patents related to their analytics and decision 

management technology, and regularly uses mathematical algorithms to predict 

consumer behavior including credit risk. 

21. The FICO Score has become the standard measure of consumer credit risk in the United 

States and is used in ninety percent of lending decisions. 

22. A FICO score consists of a three-digit number summarizing a consumer’s credit risk or 

likelihood to repay a loan. FICO periodically updates its scoring models resulting in 

multiple FICO Score versions. 

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 3 of 19
4

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

23. Base FICO Scores range from 300 to 850, while industry-specific FICO Scores range 

from 250-900. A higher FICO Score demonstrates lower credit risk or less likelihood of 

default. 

24. Different lenders use different versions of FICO Scores when evaluating a consumer’s 

credit worthiness. 

25. There are 28 FICO Scores that are commonly used by lenders. 

26. A consumer’s FICO Score is calculated based solely on information in consumer credit 

reports maintained at credit reporting agencies (CRAs).

27. The three largest CRAs are Experian Information Solutions, Inc.; Equifax, Inc. and 

Transunion, LLC. 

28. FICO does not control what information is provided on a consumer’s credit report. 

Instead, the scoring models or algorithms are based on the premise that information 

provided by the CRAs is accurate and complies with credit reporting industry 

standards. 

29. There are five key factors that a FICO Score considers: 1) Payment History 2) Amount 

of Debt 3) Length of Credit History 4) New Credit and 5) Credit Mix. 

30. Each of the five factors is weighted differently by FICO. 

31. 35% of a consumer’s FICO Score relates to payment history, 30% relates to the amount 

of debt, 15% relates to the length of credit history, 10% relates to new credit, and the 

last 10% relates to a consumer’s credit mix or the different types of debts reported. 

32. Payment history refers to whether a consumer has paid their bills in the past, on time, 

late or missed payments. The more severe, recent, and frequent the late payment 

information, the greater the impact on a FICO Score. Public record items such as 

bankruptcy, foreclosure, judgments, and wage garnishments are also considered part of 

a consumer’s payment history. 

33. In factoring the severity of delinquent payments a FICO Score considers how late the 

payment continues to be, how much is owed, how recently this occurred, and how 

many delinquent accounts exist. 

34. Once a delinquent account has been remedied the longer the account stays current the 

more a consumer’s FICO Score should increase.

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 4 of 19
5

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

35. FICO Scores are entirely dependent upon information provided by data furnishers 

(DFs) to CRAs. 

36. The FICO scoring formula treats both Chapter 7 and Chapter 13 Bankruptcies similarly 

in terms of their impact on one’s FICO Score. Specifically, both Chapters have the 

same level of severity with respect to their FICO Score and for both, FICO uses the 

FILING DATE to determine how long ago the bankruptcy took place. 

Metro 2

37. The Consumer Data Industry Association is an international trade association 

representing the consumer credit, mortgage reporting, employment and tenant screening 

and collection service industries.

38. The credit reporting industry has adopted a standard electronic data reporting format 

called the Metro 2 format. The Metro 2 format was developed by the CDIA in an effort 

to universally report debts in a particular manner that is understood to be the most 

accurate way in which to report a debt. Specifically, Metro 2 format was designed to 

allow reporting of the most accurate and complete information on consumer’s credit

history. 

39. The CDIA’s Metro 2 format is the credit reporting industry standard for accurate credit 

reporting. 

40. The credit reporting industry at large depends upon Metro 2 and the CDIA’s 

recommendations for reporting debt accurately. 

41. The CDIA is The expert on accurate credit reporting. In support of this allegation 

Plaintiff avers the following:

a. The CDIA offers a FCRA certificate program for all CRAs.

b. The CDIA offers a FCRA awareness program for all CRAs.

c. The CDIA offers a FCRA Certificate program for DFs.

d. The CDIA offers a FCRA awareness program for DFs.

e. The CDIA offers a Metro 2 Learning system to provide detailed instructions on 

the use of Metro 2 format to ensure understanding of the reporting guidelines 

for each field of the Metro 2 Format as well as the relationship between multiple 

fields.

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 5 of 19
6

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

f. The CDIA hosts workshops developed and authorized by Equifax, Experian, 

Innovis, and Transunion.

g. The CDIA developed a credit reporting resource guide for accurately reporting 

credit. 

42. The CDIA’s Metro 2 is accepted by all CRAs. 

43. The credit reporting accepted industry standards for reporting metro 2 accurately are 

found in the CDIA’s credit reporting resource guide (CRRG).

44. The CRRG outlines the industry standards for most accurately reporting debts using 

Metro 2. 

45. The CRRG is not readily available to the public. It can be purchased online for 

$229.45. 

46. Even if a buyer is ready willing and able to pay for the CRRG, the CDIA will NOT 

grant access to the guide unless the buyer represents an organization included in the 

Metro 2 Access Policy. 

47. When FICO calculates credit scores the algorithms use Metro 2 information based on 

industry standards established by the CDIA.

48. The algorithms used by FICO in determining a consumer’s credit score are premised on 

the Metro 2 data received comporting with the CDIA’s recommendations for accurate 

credit reporting. 

49. If the Metro 2 data received by FICO deviates from industry standards an inaccurate or 

incorrect FICO Score results. If the resulting FICO Score is lower a consumer will be 

considered a higher credit risk resulting in less favorable lending terms. 

e-OSCAR

50. E-OSCAR is the web based Metro 2 compliant system developed by Experian

Information Solutions, Inc.; Equifax, Inc.; TransUnion, LLC and Innovis that enables 

DFs and CRAs to create and respond to consumer credit disputes.

51. When a consumer sends a dispute letter to a CRA the CRA then sends an automated 

credit dispute verification (ACDV) via e-Oscar to the DF.

52. The ACDV contains within it Metro 2 codes next to certain data fields associated with a 

credit file e.g. “Account Type” “07” (07 in Metro 2 refers to a Charge Account).

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 6 of 19
7

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Bankruptcy Credit Reporting Industry Standards & Consumer 

Information Indicator

53. When a consumer files bankruptcy certain credit reporting industry standards exist.

54. Certain Metro 2 data is regularly expected and calculated by FICO when determining a 

consumer’s credit worthiness. 

55. The Consumer Information Indicator (CII) is a critical field in the Metro 2 Format that 

indicates a special condition that applies to a specific consumer. 

56. Under Metro 2 the CII must be reported only on the consumer to whom the information 

applies. 

57. It is the credit reporting industry standard to report a very specific CII upon the filing of 

a consumer bankruptcy. 

58. In the consumer bankruptcy context CII Metro 2 Code “A” denotes that a petition for 

Chapter 7 has been filed, is active, but no discharge has been entered. 

59. CII Metro 2 Code “D” indicates that a Chapter 13 petition has been filed, is active, but 

no discharge entered. This is usually translated on a consumer credit report as “Wage 

Earner Plan” or “WEP” in the “Account Status” portion of a trade line. Such reporting 

alerts any potential lender that the account is no longer in a collectable status but is 

being handled by a Chapter 13 trustee. 

60. The CII Metro 2 Code “Z” indicates that a bankruptcy petition has been filed but the 

chapter is undesignated/unknown.

61. The CII Metro 2 Code “E” denotes that a Chapter 7 bankruptcy has been discharged. 

62. The CII Metro 2 Code “H” denotes that a Chapter 13 bankruptcy has been discharged. 

63. The CII field is a critical field for consumers and directly relates to and impacts a 

consumer’s credit worthiness. 

64. The lack of a CII reported makes it appear that a consumer has not addressed 

outstanding debt obligations through the bankruptcy process. 

65. The lack of a CII reported also suggests that creditors are free to collect against a 

consumer as an individual or that no stay exists to prevent in personam collection 

activity. 

66. Failure to report the correct CII indicator will prompt those making credit decisions to 

draw a more negative inference regarding a consumer’s credit worthiness.

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 7 of 19
8

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

67. Under the Fair Credit Reporting Act a bankruptcy can be reported for ten years. 

68. The ten-year rule for reporting runs from the date the bankruptcy was filed. 

69. A consumer’s FICO Score is directly related to the date on which a petition is filed and 

acknowledged. 

70. The more time that has passed since the filing of the bankruptcy, the less negative 

impact the bankruptcy will have on a consumer’s FICO Score. 

71. Failure to reference the bankruptcy filing (CII field) and or the correct petition date 

shall result in a lower FICO Score resulting in those making credit decisions to draw a 

more negative inference regarding a consumer’s credit worthiness.

Pre Confirmation Credit Reporting Standards Regarding Balances and 

Ongoing Payments When All Borrowers File Chapter 13

72. Certain credit reporting standards exist on how to accurately and completely report 

balances on consumer debts pre plan confirmation. 

73. Pre confirmation the accepted credit reporting standard for accurately and completely 

reporting a balance included in a Debtor’s chapter 13 plan is to report the outstanding 

balance amount as of the date of filing. 

74. Pre confirmation the accepted credit reporting standard for accurately and completely 

reporting a scheduled monthly payment amount is to report the contractual monthly 

payment amount.

75. Pre confirmation the accepted credit reporting standard for accurately and completely 

reporting a past due balance is to report the past due amount as of the time the petition 

was filed. 

76. Pre confirmation the accepted credit reporting standard for accurately and completely 

reporting ongoing payments is to report the Metro 2 indicator D in Field 18 which 

means no payment history available this month. 

77. Within the credit reporting industry, the Metro 2 indicator D is seen as accurately and 

completely illustrating that the automatic stay of the bankruptcy is preventing ongoing 

collection activities against the debtor and creditors are not anticipating receiving 

payments directly from the debtor. The Metro 2 indicator D thus simultaneously 

illustrates to those making credit decisions that payments were NOT made and received 

but also NOT anticipated. 

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 8 of 19
9

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

78. Deviation from the aforementioned credit reporting industry standards shall result in a 

more negative inference being drawn with respect to a consumer’s credit worthiness.

Post Confirmation Credit Reporting Standards Regarding Balances and 

Ongoing Payments When All Borrowers File Chapter 13

79. Certain credit reporting standards exist on how to accurately and completely report 

balances and past due balances post plan confirmation.

80. Post confirmation the accepted accurate credit reporting standard for reporting balances 

is to report the balance owed under the Chapter 13 plan terms. The balance should 

decrease with payments made. 

81. If the plan does not call for payments to be made on a particular debt the accurate credit 

reporting standard is to report a $0.00 balance. 

82. Post confirmation the accepted accurate credit reporting standard for reporting past due 

balances is to report a $0.00 past due balance. 

83. Post confirmation the accepted accurate credit reporting standard for monthly payments 

is the Chapter 13 plan payment amount. 

84. Post confirmation the accepted accurate credit reporting standard for payment history is 

to report the Metro 2 indicator D each month. Reporting ongoing past due amounts and 

ongoing late payments are not generally accepted as accurate by the credit reporting 

industry. 

85. Plaintiff alleges that the aforementioned industry standards are all readily available in 

the CRRG which each and every Defendant subscribes thereto. 

86. The CDIA and credit reporting industry recognize that allowing Creditors to 

continuously report on going delinquencies and past due balances post confirmation 

would objectively make filing Chapter 13 and repaying Creditors exponentially worse 

for a consumer’s credit worthiness as opposed to filing Chapter 7. Thus, deviation 

from the aforementioned credit reporting industry standards shall result in a more 

negative inference being drawn with respect to a consumer’s credit worthiness.

Plaintiffs Bankruptcy Filing

87. Prior to filing Chapter 13, Plaintiff pulled a credit report on May 16, 2012 to ensure all 

outstanding debt was properly listed and scheduled in Plaintiff’s petition. 

88. The credit report was pulled from a third party vendor CIN Legal Data Services.

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 9 of 19
10

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

89. Plaintiff alleges that all the information contained within the May 16, 2012 CIN report

was compiled by information gathered by CIN directly from the three major CRAsExperian Information Solutions, Inc.; Equifax, Inc. and Trans Union, LLC.

90. The CIN report contained within it Plaintiff’s estimated credit score of 534 based on the 

information provided by the CRAs. 

91. The CIN report also estimated Plaintiff’s 12-month post-bankruptcy credit score at 650.

92. Plaintiff alleges such scores were based on anticipated accurate credit reporting 

industry standards. 

93. Plaintiff filed for Chapter 13 bankruptcy protection on August 29, 2012 in order to 

reorganize and repair Plaintiff’s credit worthiness and FICO Score.

94. Chapter 13 of the Bankruptcy Code is titled “Adjustment of Debts of an Individual with 

Regular Income.”

95. Chapter 13 allows financially overextended individual debtors to make greater 

voluntary use of repayment plans commensurate with each debtor’s abilities, as the 

most effective means of improving, first, debtor relief, and second creditor recoveries. 

96. Whether a debtor uses Chapter 7, Liquidation, or Chapter 13, Adjustments of Debts of 

an individual, congress intended bankruptcy relief be effective and should provide the 

Debtor with a fresh start. 

97. Post filing, Defendants would not accept payments directly from Plaintiff. 

98. Post filing, Defendants were not anticipating receiving payments directly from Plaintiff. 

99. Under the terms of the confirmed Chapter 13 plan, unsecured Creditors are allowed a 

.24% disbursement of their filed claims over the course of Plaintiff’s plan.

100. Plaintiff’s plan was confirmed on December 19, 2012. 

101. Once confirmed the plan became a final judgment with respect to the party’s rights and 

liabilities. 

102. The res judicata effect of confirmation may be eliminated only if confirmation is 

revoked or if the case is dismissed. 

103.Confirmation of a plan prohibits actions by creditors inconsistent with the plan. 

104. While confirmation of a plan is not a discharge it does fix the terms upon which claims 

are to be settled and both a confirmation order and discharge order are final orders. 

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 10 of 19
11

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

105. The CDIA recognizes the finality of confirmation orders and the aforementioned credit 

reporting industry guidelines are specifically setup to harmonize the bankruptcy code 

and credit reporting guidelines. 

106.Federal Rules of Bankruptcy Procedure (“FRBP”) 3004 and 3021 mandate that 

distributions to creditors are on allowed claims only.

107. A proof of claim must be filed in order for a claim to be allowed. 11 U.S.C §502(a). 

108. Thus failure to file a proof of claim results in zero distributions to a creditor through the 

plan. 

109. In the case of an unsecured non priority claim failure to file a proof of claim sets the 

terms of repayment at $0.00 owed. 

110. Item 1 of the official Proof of Claim form promulgated by the Supreme Court does not 

acknowledge past due amounts on unsecured debts. The same proof of claim form, 

however, specifically asks for and requires a secured creditor to list the arrearage/past 

due amounts on a secured claim in item 4. 

111.On April 11, 2016 Plaintiff ordered a three bureau report from Experian Information 

Solutions, Inc. to ensure proper reporting by Plaintiff’s Creditors.

112. Plaintiff noticed 5 different trade lines on the April 11, 2016 credit report all reporting 

inaccurate, misleading, or incomplete information that did not comport with credit 

reporting industry standards. Specifically, multiple trade lines continued to report 

Plaintiff’s accounts with past due balances, inaccurate balances, inaccurate monthly 

payments owed, in collections, and/or charged off. Some accounts even failed to 

register that Plaintiff was making payments on the account through Plaintiff’s Chapter 

13 plan. 

113. In response, Plaintiff disputed the inaccurate tradelines via certified mail with Experian 

Information Solutions, Inc.; Equifax, Inc.; and TransUnion, LLC on September 13, 

2016.

114. Plaintiff’s dispute letter specifically put each Creditor on notice that Plaintiff had filed 

for bankruptcy and the account was not reporting the bankruptcy accurately or worse 

not at all. Plaintiff specifically requested each Creditor investigate the proper way to 

report Plaintiff’s bankruptcy. Plaintiff noted that there should not be any past due 

balance reported, the account should not be listed as charged off, transferred or sold, 

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 11 of 19
12

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

with an inaccurate monthly payment or that the account is in collections. There should 

not be any late payments reported after Plaintiff’s case was filed and to ensure that the 

proper monthly payment was being reported. Last, Plaintiff noted that under Gorman 

v. Wolpoff & Abramson, Plaintiff expected the accounts to be reported disputed if the 

Creditor disagreed with Plaintiff’s dispute. 

115. Plaintiff is informed and believes that each CRA received Plaintiff’s dispute letter and 

in response sent Plaintiff’s dispute to each DF via an ACDV through e-OSCAR. 

116. On October 24, 2016 Plaintiff ordered a second credit report from Experian Information 

Solutions, Inc.; Equifax, Inc. and TransUnion, LLC to ensure Plaintiff’s accounts had 

been updated. 

117. It was now over four years since Plaintiff filed for bankruptcy and Plaintiff’s credit 

score was well below what accurate credit reporting industry standards would project. 

118. Defendant First Data Merchant Services, LLC was reporting Plaintiff’s account, 

beginning in 5204xxxx, as in collections, charged off, with a balance in the amount of 

$1,470.00, and with a past due balance in the amount of $1,470.00, despite the Court 

Ordered treatment of its claim under the terms of Plaintiff’s Chapter 13 plan of 

reorganization. 

119. The terms of the plan show that this claim is to be treated as an unsecured debt. Per the 

terms of plan, unsecured creditors were to be paid .24% of their claims. Debtor has 

performed and made all required payments under the terms of the plan as to Defendant 

120. This claim was disallowed under 11 U.S.C. Section 501 and 502 due to Defendant 

negligently failing to file a proof of claim. Consequently, the trustee is not making 

payment to Defendant. All payments currently owed to Defendant have been made and 

Defendant is currently owed $0.00. Assuming Defendant did file a claim, the account 

statuses of in collection and charged off that are being reporting is inaccurate and would 

not comport with Metro 2 industry standards.

121. Defendant is not comporting with industry standards and is not listing the correct CII 

indicator. CII should have been updated to D instead kept as charged off and/or in 

collections. To be clear, NOTHING about this trade line indicates the account is subject 

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 12 of 19
13

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

to Plaintiff’s Chapter 13. Instead, lender shall think Plaintiff may be subject to levies 

and garnishments. This is not true.

122. In addition to the aforementioned inaccuracies, the balance and past due balance listed 

by Defendant do not comport with Metro 2 industry standards.

123. Based on Plaintiff’s dispute, Defendant should have known the account was included in 

Plaintiff’s Chapter 13 plan of reorganization and being reporting incorrectly. The most 

basic investigation would include a simple review of well-established credit reporting 

industry standards. 

124. Plaintiff alleges Defendant did not review well established industry standards for credit 

reporting. 

125. If Defendants had reviewed such standards Defendants would have seen their reporting 

was not in compliance and consequently inaccurate and or incomplete.

126. Defendant TD Bank USA, National Association was reporting Plaintiff’s account, 

beginning in 4352xxxx, as in collections and charged off, despite the Court Ordered 

treatment of its claim under the terms of Plaintiff’s Chapter 13 plan of reorganization.

127. The terms of the plan show that this claim is to be treated as an unsecured debt. Per the 

terms of plan, unsecured creditors were to be paid .24% of their claims. Debtor has 

performed and made all required payments under the terms of the plan. 

128. This claim was disallowed under 11 U.S.C. Section 501 and 502 due to Defendant 

negligently failing to file a proof of claim. Consequently, the trustee is not making 

payment to Defendant. All payments currently owed to Defendant have been made and 

Defendant is currently owed $0.00. Assuming Defendant did file a claim, the account 

status’ of in collection and charged off that are being reporting is inaccurate and would 

not comport with Metro 2 industry standards.

129. Defendant is not comporting with industry standards and is not listing the correct CII 

indicator. CII should have been updated to D instead kept as charged off and/or in 

collections. To be clear TD Bank refuses to acknowledge that this account is subject to 

Plaintiff’s Chapter 13 plan. Instead TD Bank’s reporting suggests that it may collect on 

this account or garnish wages. This is not true!

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 13 of 19
14

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

130. If this wasn’t troubling enough, Defendant is simultaneously reporting that the account 

is current in the payment history, but the status shows that the account is in collections. 

131. The actions of the Defendants as alleged herein are acts in violation of the Fair Credit 

Reporting Act, 15 U.S.C. § 1681s-2(b). 

132. The actions of the Defendants as alleged herein are acts in violation of the Consumer 

Credit Reporting Agencies Act California Civil Code § 1785.25(a).

FIRST CAUSE OF ACTION

(Violation of Fair Credit Reporting Act 15 U.S.C. § 1681s-2(b))

Against Defendants and Does 1-100)

First Data Merchant Services, LLC and TD Bank USA, National Association –Failure 

to Reinvestigate.

133. Plaintiff realleges and incorporates herein the allegation in each and every paragraph 

above as though fully set forth herein. 

134. 15 USC 1681s-2(b) and 15 USC 1681i-(a)1 prohibits furnishers from providing any 

information relating to a consumer to any consumer reporting agency if the person knows 

or has reasonable cause to believe that the information is inaccurate or misleading and 

requires a furnisher to update and or correct inaccurate information after being notified 

by a consumer reporting agency of a dispute by a consumer. 

135. Defendants First Data Merchant Services, LLC and TD Bank USA, National Association

violated section 1681s-2(b) by failing to conduct a reasonable investigation and rereporting misleading and inaccurate account information.

136. The CRAs provided notice to the Defendants that Plaintiff was disputing the inaccurate 

and misleading information but First Data Merchant Services, LLC and TD Bank USA, 

National Association failed to conduct a reasonable investigation of the information as 

required by the FCRA.

137. Based on Plaintiff’s dispute, Defendants should have known their accounts were included 

in Plaintiff’s Chapter 13 plan of reorganization. The most basic investigation would 

include a simple review of well-established credit reporting industry standards. 

138. Plaintiff alleges Defendants did not review well established industry standards for credit 

reporting. 

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 14 of 19
15

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

139. If Defendants had reviewed such standards Defendants would have seen their reporting 

was not in compliance and consequently inaccurate and or incomplete. 

140. Such an investigation would be unreasonable. 

141. Plaintiff also alleges that Defendants did not investigate whether Plaintiff filed for 

bankruptcy, whether their accounts were included, the terms of the plan, or whether or 

not the terms had been approved. 

142. The lack of investigation is unreasonable. 

TransUnion, LLC and Equifax, Inc. – Failure to Reinvestigate Disputed Information.

143. Plaintiff realleges and incorporates herein the allegation in each and every paragraph 

above as though fully set forth herein.

144. After Plaintiff disputed the accounts mentioned above, each CRA was required to 

conduct a reasonable investigation and to delete any information that was not accurate

under 15 USC 1681i-(a)1.

145. The most basic investigation required each CRA to send all relevant information via 

an ACDV to the furnishers which they did not do. 

146. Thus the CRAs failed to conduct a reasonable investigation and failed to correct the 

misleading and or inaccurate statements on the account within the statutory time 

frame or at all.

147. In the alternative Plaintiff alleges that each CRA has its own independent duty to 

conduct a reasonable investigation 15 USC 1681i-(a)1.

148. Each CRA is not a passive entity bound to report whatever information a DF 

provides. 

149. Plaintiff alleges that each CRA is readily familiar with Metro 2 guidelines and credit 

reporting industry standards. 

150. In fact, each CRA sponsors and authorizes workshops hosted by the CDIA that 

teach the following to DFs: 

a. Do not report delinquencies post petition pre discharge in the payment history 

section regardless of Chapter 7 or Chapter 13. Instead report the Metro 2 

indicator D. 

b. In Chapter 13 cases do not report past due balances post confirmation. 

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 15 of 19
16

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

c. In Chapter 13 cases do not report balances that are inconsistent with the terms 

of the Chapter 13 plan. 

d. In Chapter 13 cases do not report monthly payments that are inconsistent with 

the terms of the Chapter 13 plan.

e. The above reporting is the correct and accurate way to report debts included in 

consumer bankruptcy filings. 

151. Given the aforementioned, Plaintiff alleges that each CRA can and does suppress 

inaccurate information from being reported when DFs provide inaccurate 

information.

152. Each CRA can and does instruct DFs on how to properly report certain accounts from 

time to time upon request from the DF. 

153. Each CRA failed to conduct a reasonable investigation because any basic 

investigation would have uncovered that certain DFs were not following credit 

reporting industry standards. 

154. Each CRA would have known that Plaintiff filed for Chapter 13 based on multiple 

other accounts reporting as much. 

155. Each CRA would have known that Plaintiff’s plan had been confirmed based on 

multiple other accounts reporting as much. 

156. Each CRA would have known that failure to report a CII given that a Chapter 13 was 

filed did not comport with industry standards. 

157. Each CRA would have known reporting a past due balance post confirmation does 

not comport with industry standards. 

158. Each CRA therefore did not do the most basic investigation regarding credit reporting 

industry standards otherwise the aforementioned would have been uncovered. 

SECOND CAUSE OF ACTION

(Violation of California Consumer Credit Reporting Agencies Act

California Civil Code § 1785.25(a) Against Defendants and Does 1-100)

First Data Merchant Services, LLC and TD Bank USA, National Association –

Reporting Inaccurate Information to CRAs.

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 16 of 19
17

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

159. Plaintiff realleges and incorporates herein the allegation in each and every paragraph 

above as though fully set forth herein. 

160. In the regular course of its business operations, Defendants routinely furnish 

information to credit reporting agencies pertaining to transactions between Defendants

and Defendant’s consumers, so as to provide information to a consumer’s credit 

worthiness, credit standing and credit capacity. 

161. Defendants intentionally and knowingly reported misleading and inaccurate account 

information to the CRAs that did not comport with well-established industry standards. 

162. Plaintiff alleges that Defendants re-reported the information contained herein in 

violation of California Civil Code § 1785.25(a).

163. Plaintiff also alleges that Defendants had reason to know that the information reported 

on Plaintiff’s accounts were misleading, inaccurate, incomplete, and did not comport 

with well-established credit reporting industry standards. 

164. Plaintiff alleges that Defendants had reason to know that by not comporting with wellestablished industry standards lenders will draw a more negative inference with respect 

to Plaintiff’s credit worthiness. 

165. Plaintiff alleges that the bankruptcy notices, disputes letters from all three credit 

reporting agencies, the consumer data industry resource guide, and results of its 

investigation should have provided notice to Defendants of its misleading and 

inaccurate reporting as well as being noticed of the plan confirmation and proof of 

claim forms sent by the U.S. Bankruptcy Court. 

166. Defendants failed to notify TransUnion, LLC and Equifax, Inc. that the information 

Defendants re-reported was inaccurate before the end of 30 business days, in violation 

of California Civil Code § 1785.25(a).

167. Defendants’ communications of false information, and repeated failures to investigate, 

and correct their inaccurate information and erroneous reporting were done knowingly, 

intentionally, and in reckless disregard for their duties and Plaintiff’s rights. 

168. As a direct and proximate result of Defendants’ willful and untrue communications, 

Plaintiff has suffered actual damages including but not limited to inability to properly 

reorganize under Chapter 13, reviewing credit reports from all three consumer reporting 

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 17 of 19
18

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

agencies, time reviewing reports with counsel, sending demand letters, diminished 

credit score, and such further expenses in an amount to be determined at trial.

Wherefore, Plaintiff prays for judgment as hereinafter set forth.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff prays for judgment as follows:

1. For preliminary and permanent injunctive relief to stop Defendants from 

engaging in the conduct described above;

2. Award statutory and actual damages pursuant to 15 U.S.C. § 1681n and 

California Civil Code § 1785.31;

3. Award punitive damages in order to deter further unlawful conduct pursuant to 

15 U.S.C. § 1681n; and California Civil Code § 1785.31

4. Award attorney’s fees and costs of suit incurred herein pursuant to 15 U.S.C. § 

1681n & o; California Civil Code § 1785.31;

5. For determination by the Court that Creditor’s policies and practices are 

unlawful and in willful violation of 15 U.S.C. § 1681n, et seq.; and

6. For determination by the Court that Creditor’s policies and practices are 

unlawful and in negligent violation of 15 U.S.C. § 1681o;

SAGARIA LAW, P.C.

Dated: January 26, 2017 /s/ Elliot Gale, Esq.

Scott Sagaria, Esq.

Elliot Gale, Esq.

Attorneys for Plaintiff

DEMAND FOR JURY TRIAL

Plaintiff hereby demands trial of this matter by jury.

SAGARIA LAW, P.C.

Dated: January 26, 2017 /s/ Elliot Gale, Esq.

Scott Sagaria, Esq.

Elliot Gale, Esq.

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 18 of 19
19

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Attorneys for Plaintiff

Case 3:17-cv-00419-MMC Document 1 Filed 01/26/17 Page 19 of 19