A District Court judge in New York has granted a defendant’s motion to dismiss a Fair Debt Collection Practices Act claim but denied the motion to dismiss a Fair Credit Reporting Act claim after the plaintiff filed suit because of a disputed debt.
A copy of the ruling in the case of Wexler v. Reliant Capital Solutions can be accessed by clicking here.
The plaintiff filed dispute with the Consumer Financial Protection Bureau in regards to a debt related to his time in law school. The CFPB noted TransUnion about the dispute and the credit bureau notified the defendant. The defendant sent a letter to the plaintiff, which appeared to have been sent in response to a request from the plaintiff and not a result of its investigation into the disputed debt. The plaintiff filed suit, alleging emotional distress and decisions not to apply to rent apartments as a result of the false tradeline on his credit report. The debt was subsequently removed from the plaintiff’s credit report.
Judge Denis Hurley of the District Court for the Eastern District of New York granted the defendant’s motion to dismiss a claim that it violated Section 1692e(8) of the FDCPA by failing to communicate that a debt has been disputed because it is “difficult to conclude that Reliant reported the tradeline to Trans Union /after/ learning the debt was disputed.”
However, Judge Hurley declined to dismiss the FCRA claim, which alleges the defendant failed to reasonably investigate the dispute. The issue at hand is whether the defendant was required to investigate a dispute that originated via a complaint with the CFPB. The defendant argues that it is not required to investigate such disputes, but the judge wants more information about how the CFPB’s portal works to make a final determination.
