The Court of Appeals for the Third Circuit has overturned a lower court’s summary judgment ruling in favor of a defendant that was sued for violating the Fair Credit Reporting Act and the Fair Debt Collection Practices Act for not properly investigating a dispute, saying there is no exception in the FCRA that allows furnishers to disregard disputes deemed to be irrelevant or frivolous. This is a case in which both the Federal Trade Commission and the Consumer Financial Protection Bureau filed amicus briefs in support of the plaintiff’s case.
A copy of the ruling in the case of Ingram v. Experian Information Solutions et al. can be accessed by clicking here.
The plaintiff claims that he discovered a fraudulent cable account was opened in his name when he checked his credit report. The account was not opened with his authorization and was for service at an address at which the plaintiff never lived, he claimed. The plaintiff filed a dispute with the cable provider, which asked the plaintiff to provide proof of residence, a notarized fraud and identity theft affidavit from the FTC, a copy of the plaintiff’s driver’s license, and a police report. The plaintiff did not submit the information and the cable company did not conduct an investigation to determine if the account was fraudulent. The cable company instead referred the disputed account to a collection agency, which then reported the delinquent debt to the credit reporting agencies.
After the agency reported the debt, the plaintiff filed another dispute, this time an indirect one with one of the credit bureaus. This dispute included the note “THIS IS NOT MY ACCOUNT. PLEASE REMOVE FROM MY CREDIT.” The bureau forwarded to the dispute to the collection agency, which assigned the dispute to an analyst. The analyst updated the plaintiff’s address in the agency’s system and confirmed the name on the account and the Social Security number, but did not do anything else. The analyst spent 13 seconds investigating the dispute. The agency did not delete the account until another dispute was filed, after the lawsuit had been filed by the plaintiff and included information that the plaintiff believed the account was fraudulent and that he had obtained a police report.
A District Court judge ruled the plaintiff did not do his part to back up his claim that the debt was not his.
But the judge incorrectly applied how a direct dispute should be handled instead of an indirect dispute, the panel of Third Circuit judges noted. Once the agency received the indirect dispute, it had a duty to investigate more than it did. Section 1681s-2(b) of the FCRA “charges furnishers with a duty to investigate indirect disputes forwarded to them by the agencies,” without exception, the Court wrote.
