A federal judge in Pennsylvania has partially granted a student loan collector’s motion for summary judgment to dismiss a case filed by a plaintiff who accused the agency of violating the Fair Credit Reporting Act.
The plaintiff had filed for bankruptcy protection, but the student loans were not discharged because they were not eligible. The three major credit bureaus each listed the plaintiff’s student loan balance as $0 and included a comment that they had been discharged in bankruptcy. When the plaintiff disputed the status of those debts, the bureaus forwarded the disputes to the defendant. The defendant was accused of not conducting a thorough investigation and allowing the trade lines to remain inaccurate.
A copy of the ruling in Coulter v. Pennsylvania Higher Education Assistance Agency, doing business as FedLoan Servicing can be accessed by clicking here.
The defendant filed a motion to dismiss based on the argument that some of the claims made by the plaintiff were improper because no private right of action exists.
For example, under Section 1681s-2(a) of the FCRA, “data furnishers must provide complete and accurate information to consumer reporting agencies.” However, a violation is not subject to a private right of action in the “first instance,” under the FCRA. Only after a dispute has been reported can a furnisher be subject to a private right of action.
The judge in this case, Judge Joseph F. Leeson, ruled that two of the three counts in the plaintiff’s complaint were “written in broad terms, and it is not clear that these paragraphs relate only to post-dispute conduct,” and granted the motion to dismiss. Only one remaining count, in which the defendant failed to provide a “complete and accurate post-dispute reporting of debts,” was allowed to proceed.
