SW Legal Educational Publishing

Consumer May Sue Creditor for Damage to Credit Expectancy
Description Missouri high court held that a consumer could sue a retailer for violation of the Truth-in-Lending Act and for the tort of interference with credit expectancy for intentionally and wrongfully failing to correct a billing dispute.
Topic Consumer Protection
Key Words Truth-in-Lending Act; Regulation Z; Billing Error; Credit Expectancy
C A S E   S U M M A R Y
Facts Bell bought a ceiling fan at Famous Barr (FB) and charged it to his FB credit card. When the fan did not work, he notified FB of the problem and said he would not pay that portion of his credit card statement until the matter was resolved. There was correspondence back and forth, Bell noting the problem, FB promising to fix it, then demanding payment, but doing nothing about the fan. After a year, the parties appeared to have settled the matter, but FB then demanded payment, late fees, finance charges, closed Bell's account, and notified credit bureaus of the matter. Bell protested; FB promised to remedy the matter, but did not, so the matter remained on Bell's credit reports. He sued FB for violating Regulation Z under the Truth-in-Lending Act for not following required procedure when there was a billing dispute. The trial court dismissed the case; Bell appealed.
Decision Reversed. A reasonable jury could find that a billing error existed, and that FB violated TILA by closing the account and reporting him to credit bureaus. Further, Bell has an action against FB for damage to his credit expectancy. "Although Bell had no credit application pending at the time Famous Barr reported derogatory information, a reasonable jury could find he had valid credit expectance based on his longstanding clean credit history, and his efforts to keep it clean. This is a tort of intentional interference with credit expectancy. Correspondence from FB to Bell indicated a threat to his credit rating; the jury could find that FB intended to damage Bell's credit rating.
Citation Bell v. The May Department Stores Company, 1999 WL 1059930 (Slip Copy, Sup. Ct., Mo.)

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