How far can punitive damages go in an FCRA case? Daugherty v. Ocwen Loan Servicing, LLC, 701 F. App'x 246 (4th Cir. 2017) (unpublished), gives the Fourth Circuit's most concrete modern answer: very far — just not without limit.
The facts
A West Virginia jury found that mortgage servicer Ocwen willfully violated § 1681s-2(b) in its handling of credit-reporting disputes about Mr. Daugherty's account. It awarded $6,128.39 in compensatory damages — and $2.5 million in punitive damages, a ratio of roughly 408 to 1.
The holding
The Fourth Circuit affirmed liability and the compensatory award, but held the punitive figure unconstitutionally excessive under the State Farm guideposts:
"Therefore, we hold that, under the second State Farm guidepost, the punitive damages award is unreasonably disproportionate to the $6,128.39 award of compensatory damages."
Its remedy, though, is the headline:
"We therefore reduce the punitive damages award to $600,000 and award Daugherty a new trial nisi remittitur, providing him the option of accepting the reduced amount of punitive damages or of proceeding to a new trial on punitive damages."
Six hundred thousand dollars — roughly ninety-eight times the compensatory award — survived constitutional scrutiny. (One practice note: the decision is unpublished, so it is cited for its persuasive reasoning rather than as binding precedent.)
What it means for consumers
Read together with Saunders (80:1 affirmed), the message of this circuit is consistent: when a financial institution willfully mishandles credit-reporting disputes, modest individual harm does not cap the consequences. Deterrence is the point. Servicers and furnishers know these numbers, which is why documented willfulness — ignored disputes, rubber-stamp verifications, broken promises to correct — drives settlement value in real cases.
If a servicer or bank has repeatedly "verified" something you've proven wrong, that pattern is worth a conversation with counsel. The downside they are risking is not the size of your bill; it is the size of the message a jury is allowed to send.