Consumer Credit Lawsuits Surpass 10,000 in FY 2017
The latest available data from the federal courts show that during September 2017 the government reported 951 new consumer credit lawsuits filed. This brings the total number of filings during fiscal year 2017 to 10,583. This is the first time in memory that new annual filings of this type surpassed 10,000. According to the case-by-case information analyzed by the Transactional Records Access Clearinghouse (TRAC) at Syracuse University, this number is up 8.0% over the previous year when the number of civil filings of this type totaled 9,800. See Table 1.
The previous high point in consumer credit litigation occurred in FY 2011 when suits that year reached 9,826. New filings then declined until they started climbing again in FY 2015. Civil filings of this type are now up 13.0% from levels reported five years ago. The long term trend in consumer credit civil filings for these matters going back to FY 2008 is shown more clearly in Figure 1.
Many of these suits are brought under the Fair Credit Reporting Act, 15 U.S.C. 1681. The Fair Credit Reporting Act was initially passed by Congress in 1970 to help ensure the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. Such agencies include financial agencies and credit bureaus such as Equifax that recently reported a major security data breach. It is the Fair Credit Reporting Act that gives consumers specific rights when the person is a victim of identity theft.
Additional consumer credit lawsuits are also brought under the Fair Debt Collection Act, 15 U.S.C. 1692. This act is designed to prohibit debt collectors from using abusive, unfair, or deceptive practices. Occasionally consumer credit lawsuits are brought alleging violations under other statutes such as the Telephone Consumer Protection Act (47 USC 227), the Telecommunications Act of 1996 (47 USC 151), the Communications Act (47 USC 521), and the Real Estate Settlement Procedures Act (12 USC 2601).
Where Suits Were Filed
In terms of the sheer number of consumer credit lawsuits, the Eastern District of New York (Brooklyn) easily surpassed every other federal district in the country in each of the last two years. During FY 2017 that district saw a total of 1,218 such suits, even more than the 872 suits filed during FY 2016.
Relative to the population within each district, the District of Nevada surpassed the Eastern District of New York with the most suits on a per capita basis in both years. The Eastern District of New York slipped to second place in the rankings relative to its population size.
Three other districts ranked in the top five relative to population size, although their relative ranking within the top 5 shifted from year-to-year. These remaining districts in the top five were: the Northern District of Georgia (Atlanta), the Southern District of Indiana (Indianapolis), and the Northern District of Illinois (Chicago).
Filings along with per capita rates and rankings for each of the federal districts within the fifty states that had at least one consumer lawsuit during this period are shown in Table 2.
Each month, TRAC offers a free report focused on one area of civil litigation in the U.S. district courts. In addition, subscribers to the TRACFed data service can generate custom reports by district, office, nature of suit or federal jurisdiction via the TRAC Data Interpreter.