If you are furnishing information to credit reporting agencies — especially within the Seventh Circuit — you better make sure that you haven’t received any disputes in the day or two prior to submitting updates to the CRAs. A District Court judge in Illinois has denied a defendant’s motion for summary judgment and granted a plaintiff’s motion for summary judgment — as to liability only — in a Fair Debt Collection Practices Act case because the defendant failed to note that an account was disputed when it furnished information to the credit reporting agencies, even though it had received the dispute two days before the information was furnished.
A copy of the ruling in the case of Thomas v. LVNV Funding can be accessed by clicking here.
The plaintiff sent a letter to the defendant disputing the accuracy of the information being reported to the CRAs, saying the amount of the debt was incorrect. The defendant received the letter on February 1, 2021. On February 3, the defendant reported the debt to one of the CRAs and did not note that the account was now being disputed. The defendant argued that its policies and procedures were that it could take up to seven business days for a dispute letter to be reviewed and an account to be updated, during which time information about the debt may be communicated to third parties.
That is not fast enough to Judge Elaine E. Bucklo of the District Court for the Northern District of Illinois, who looked at other rulings from within the Seventh Circuit, including Francisco v. Midland, in which a judge ruled that taking seven days to process disputes was not reasonable under the FDCPA. The defendant’s “system tolerates the communication of false information in cases where disputes arrive at its doorstep at the close of its monthly reporting periods, and it lacks procedures for promptly correcting information it later discovers was false at the time it was communicated to a third party,” Judge Bucklo wrote.
The defendant also attempted to argue the plaintiff lacked standing to sue because there was no negative impact on her credit score as a result of the dispute not being transmitted, but Judge Bucklo ruled that standing to sue was not dependent on damage to the plaintiff’s credit score.
