Verizon's Erroneous Reporting in FCRA Case Caused Steep Drop in Credit Rating: Suit

Despite assuring a customer that she wouldn’t be charged for service or hardware after a FiOS installation wasn’t successful, Verizon billed her and then reported her account as delinquent to credit reporting agencies (CRAs) Experian, TransUnion and Equifax, alleged plaintiff Ayesha Gordon in a Fair Credit Reporting Act complaint (docket 1:24-cv-00486) Wednesday in U.S. District Court for Eastern Virginia in Alexandria.

Gordon called Verizon Sept. 30, 2022, to schedule a broadband installation for her new apartment, said the complaint. The original installation date for FiOS service was Oct. 5, a date she was unable to accommodate, the complaint said. The date was changed to Oct. 22; Gordon planned to leave on a trip after the installation that day, it said. Installer Will Smith arrived on the 22nd, provided a router and represented that the service was working, the complaint said. Gordon didn’t have time to verify the internet service was working before she left on her trip, it said. Verizon billed her for $99, plus $49.99 for installation.

Verizon billed Gordon in advance for the first month of service on Oct. 22, 2022, but when she returned from her trip, she was unable to connect her computer to FiOS, the complaint said. She contacted Smith, and then customer service, and neither was able to help her connect to the internet, it said. Smith instructed her to return the router, said he would close her account and that Verizon would credit her for the charges “since the service never worked,” the complaint said.

Gordon returned the equipment to Verizon Nov. 15, but when she received an invoice Nov. 22, the original charges had not been removed, the complaint said. Gordon reached out to Verizon multiple times to correct the billing and remove the charges since she had never received broadband service. On Dec. 14, a customer service agent agreed to “correct the billing to at least delete the unearned FiOS charges after she canceled," it said. A final corrected invoice dated Dec. 22 showed no new charges or late fees and showed a $34 credit for adjusted monthly service, it said.

A January bill arrived, which Gordon paid in full for $114.99 “to protect her excellent” 800+ credit rating, the complaint said. Though that “should have been the end of the issue,” Verizon “made matters exponentially worse” the next day by, for the first time, “falsely” reporting Gordon’s account “as so delinquent that it had sent it to collections,” the complaint said. The change in her credit report caused her score to drop from the “800s to the 600s,” it said.

The account shouldn’t have been reported as even 30 days late, said the complaint, but Verizon “falsely reported it as a debt” that was so delinquent it was sent to collections. Verizon reported the date of the first delinquency as Oct. 1, which was three weeks prior to the first invoice date of Oct. 22, it said. When Gordon disputed the “erroneous and misleading credit data” with a Verizon agent, she was told the most the ISP would do was report the account as a “paid in full charge-off,” said the complaint.

A Verizon agent reported the date of first delinquency as Oct. 1, the day after the company set an “open date” of Sept. 30 for the account. The date of first delinquency is when an account goes 30 days past due and is “never paid or brought current,” the complaint said: “Obviously, an account that is opened one day cannot go 30 days or more past due by the following day." The reported dates were “grossly inaccurate” since Gordon called to schedule service on Sept. 30, but Verizon didn’t install service until Oct. 22, it said.

Gordon sent dispute correspondence to the three CRAs, all of which verified “that it was such a delinquent and bad debt that it was sent to collections” and that the date of the first delinquency was “accurately reporting” as Oct. 1, the complaint said. Gordon sent credit dispute letters and Verizon responded with automated credit dispute verification (ACDV) documents certifying that it reviewed images and relevant information, verified the accuracy of information in compliance with legal requirements and adjusted its records to reflect submitted data, said the complaint.

On information and belief, Verizon “hires a third-party contractor to conduct its ACDV reinvestigations,” the complaint said, naming GC Services. The GC Services processors have “limited Verizon documentation available for review” and limited authority to make changes to credit reporting, it said. In depositions in other cases, GC Services has testified that “if the accuracy of what Verizon is reporting is disputed or challenged,” it has “not been authorized to correct or modify it,” the complaint said.

Had Verizon and its “outsourced dispute processors corrected and updated" the first date of first delinquency (DFD), the CRAs “would have been placed on notice” that Gordon’s accounts of the matter in her dispute letters were accurate “and that what Verizon was reporting was clearly inaccurate,” the complaint said. "By falsely backdating the DFD to weeks before even the first invoice issued, it made the account appear to have been so late that collections may have been warranted," it said.

The “massive drop in her credit score” has caused significant damage to Gordon’s credit rating “and significant distress as well,” the complaint said. The plaintiff requests compensatory, punitive and statutory damages; prejudgment interest; and attorneys’ fees and costs. Verizon didn't comment Thursday.