CHICAGO — A Chicago federal judge has dismissed an Illinois man's lawsuit against Equifax alleging the credit reporting giant misreported his child support payments as delinquent because Texas state officials had been wrongly deducting too much from certain paychecks.

Judge Sara L. Ellis of the U.S. District Court for the Northern District of Illinois sided with the defendant and granted its motion to dismiss Joseph Underwood's complaint, agreeing that Equifax was correctly following provisions in the Fair Credit Reporting Act (FCRA) in its reporting.

The other two major credit reporting agencies (CRAs) named in Underwood's suit—TransUnion and Experian—have also filed motions to dismiss which are currently pending.

Underwood claimed that Equifax did not ensure proper accuracy in his credit report and that they did not investigate and correct the issue when Underwood complained of the error.

Equifax then denied the claims and moved to have them dismissed. The company argued that the information it received on Underwood’s child support delinquencies was from the Texas Office of the Attorney General (OAG). According to Equifax, it is required to include any information it receives from state enforcement agencies in their consumer reports, which includes child support delinquencies. Because of this, Equifax argues that it cannot be liable for simply complying with the rules of the FCRA.

Underwood has child support obligations for which he makes payments to the Texas OAG. The deductions are automatically taken from his paychecks. This makes about 26 payments per calendar year. The OAG deducts the money bi-weekly, regardless of whether Underwood receives two or three paychecks in the month. Because of this, Underwood said, the Texas OAG reports his child support as late when he only receives two checks, as it is listed as insufficient funds - not enough to satisfy the amount the OAG has obligated him to pay.

In September 2015, Underwood was informed that his consumer report included a 30-day late entry for his account. After learning of the late fee, the plaintiff filed a complaint with the OAG. An OAG representative told the plaintiff to file a formal complaint with the CRAs.

Underwood filed the complaint on Oct. 16, 2015. Equifax conducted an investigation and deleted the late entry on Underwood’s account. After the removal, Equifax added seven additional late fees to Underwood’s account for November and December 2014, January, February, July and August 2015 and January 2016. Underwood filed another complaint.

To resolve the issue, Underwood paid his part for February, March, April and May 2016. This was in addition to his regularly scheduled withdrawals. The OAG still delayed his payments, he said. On March 31, the credit reporting agencies told Underwood they believed the Texas OAG was reporting the account correctly to the CRAs and the complaint was closed.

In court, Underwood said he understood that Equifax was in compliance with the FCRA, but he argued that the allegations of the complaint do not establish that Equifax was given relevant information from the OAG or that his child support was overdue at any time.

The court, however, granted Equifax’s motion to dismiss. 

Underwood is represented in the action by attorneys with the firm of Krohn & Moss, of Chicago. 

Equifax was represented by the firms of Polsinelli P.C., of Chicago, and King & Spalding, of Atlanta.

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