It turns out that claiming a plaintiff lacks standing to sue just isn’t for Fair Debt Collection Practices Act cases; the argument can work on Fair Credit Reporting Act cases, too. A District Court judge in New York has granted a defendant’s motion to dismiss after it was sued for allegedly violating the FCRA because it furnished information to the credit reporting agencies that the account was more than 120 days past due even though it had been transferred to another creditor.
A copy of the ruling in the case of Rosenberg v. LoanDepot can be accessed by clicking here.
The plaintiff opened a credit account with the defendant and then filed a dispute after noticing that her credit report had the incorrect notation on it. The plaintiff alleges the credit reporting agency notified the defendant of the dispute, but that the defendant failed to properly investigate and correct the allegedly inaccurate information. That information, the plaintiff claimed, is used by creditors and their algorithms to help determine credit scores and creditworthiness.
The plaintiff filed suit, alleging the failure to properly investigate and correct the information led to a decrease in her credit score, a loss of credit, loss of ability to purchase and benefit from credit, a chilling effect on applications for future credit, and the mental and emotional pain, anguish, humiliation and embarrassment of credit denial.
While those claims may be true, they are not enough for the plaintiff to have standing to sue, ruled Judge Philip M. Halpern of the District Court for the Southern District of New York. Especially because the plaintiff failed to identify any lender that reacted adversely to the information on the plaintiff’s credit report and because emotional harm is not enough to have standing to sue in federal court. “The conclusory allegations here, such as the mere invocation of the words ’emotional pain,’ are insufficient to establish concrete harm without any additional detail,” Judge Halpern wrote.
