A District Court judge in Missouri has denied a defendant’s motion to dismiss after it was sued for violating the Fair Credit Reporting Act, ruling that an individual does not have to notify a furnisher or credit reporting agency of a discrepancy in his or her credit report and allow enough time for the dispute to be investigated before a lawsuit can be filed.
A copy of the ruling in the case of Gibson v. Experian Information Solutions, Inc., can be accessed by clicking here.
The plaintiff filed for Chapter 7 bankruptcy protection, which was successfully discharged. The plaintiff then obtained a copy of her credit report from the defendant and while it noted the successful discharge of her bankruptcy filing, a debt owed to a payday lender was still showing as past due. The other two major credit reporting agencies, meanwhile, were not reporting the payday loan on their credit reports.
The plaintiff filed suit, alleging the defendant violated Section 1681e(b) of the FCRA by not taking reasonable measures to ensure the accuracy of an individual’s credit report.
Acknowledging that the defendant’s argument indicating that this was an isolated incident rather than the result of unreasonable procedures may be true, Judge Audrey Fleissig of the District Court for the Eastern District of Missouri, Eastern Division ruled that the argument is “better suited for resolution at a later stage, on a more complete record,” and denied the defendant’s motion to dismiss. “At this early stage, the Court is persuaded by multiple district court determinations that notice of a Chapter 7 bankruptcy, as evidenced by a CRA’s own reporting of such a bankruptcy, makes it plausible to allege that continued reporting of a prior unsecured debt is unreasonable,” Judge Fleissig wrote.
Backing up Judge Fleissig’s opinion was a settlement in White v. Experian Information Solutions in which the defendant agreed to implement procedures to ensure it corrected information related to Chapter 7 bankruptcy filings.
“Although the White
