The Court of Appeals for the Fifth Circuit has affirmed a lower court’s dismissal of a lawsuit in which an individual alleged a credit reporting agency violated the Fair Credit Reporting Act by deleting a positive from a credit report, which is fine as long as the item was not deleted from his credit file.
A copy of the ruling in the case of Hammer v. Equifax Information Services can be accessed by clicking here.
The plaintiff noticed that a credit card — for which he was making payments on time — was no longer appearing on his credit report. The plaintiff asked each of the three major credit reporting agencies to add the item back onto his report, but only one did. The plaintiff continued to dispute the deletion, at which point the other two credit reporting agencies added it back to his report. But Equifax removed the item again five days later.
The deletion of the positive item caused the plaintiff’s credit score to drop, costing him a better interest rate on a mortgage, so he sued, alleging the defendant failed to ensure the accuracy of his credit report, failed to adequately investigate his disputes, and failed to notify him when it added the item back to his credit report.
But credit reporting is a voluntary decision by a furnisher, not an obligation, the Appeals Court reasoned, saying that “Businesses relying on credit reports have no reason to believe that a credit report reflects all relevant information on a consumer.”
As for the other violations, they only are triggered if an item is deleted from the individual’s credit file, not his or her’s credit report. Because the plaintiff never claimed that the defendant deleted the items from his credit file, his claim is “likely futile” and the District Court did not err by dismissing the complaint, the Appeals Court ruled.
