After a contentious trial[1], a jury awarded a consumer $100,000 in actual damages and $623,000 in punitive damages for Midland Credit's "willful noncompliance" of its duties under federal law (Fair Credit Reporting Act) to adequately investigate the consumer's repeated credit report disputes over a 2-year period.
The trial court revealed:
- Midland credit receives about 8,000 disputes per year;
- In 95% of those disputes, Midland merely checks its own electronic information as a means of validating the debt; and
- Midland's debts are purchased at discount from creditors unable to collect them.
The jury determined defendant's conduct to be reprehensible.
Rather than accept the jury's verdict, sore loser Midland Credit sought to vacate the judgment or reduce the plaintiff's award. But the court refused, finding that a punitive damages award of roughly six times the actual damages award of $100,000 was appropriate under Supreme Court standards. Furthermore, it supported the ultimate objectives of deterrence and punishment for credit report abuse.