Reporting errant payment obligations to a credit reporting agency may be enough for a plaintiff to have standing to sue under the Fair Credit Reporting Act, a federal judge has ruled — joining a growing number of courts to make such a determination — but it still isn’t enough for the plaintiff to state a claim, leading the judge to dismiss the suit.
The Background: The plaintiff accessed her credit report and saw a tradeline that included monthly payment amounts of $49, $72, and $73 for accounts owed to the defendant. But the accounts had previously been closed by the defendant, which led the plaintiff to allege that the entire balance should be due instead of a monthly payment and that she has neither the right nor the obligation to satisfy the debts in monthly installments.
- The plaintiff disputed the debt with a credit reporting agency and the credit reporting agency forwarded the dispute to the defendant. But the plaintiff’s credit report was never updated.
- The plaintiff filed suit, alleging the defendant violated the FCRA by failing to investigate the dispute. She alleged that under the Credit Reporting Resource Guide, furnishers are not supposed to report a monthly payment on a closed account.
The Ruling: Noting that District Courts have split on the issue of whether dissemination of defamatory information to a credit reporting agency as opposed to potential creditors is a concrete harm, Judge William J. Martini of the District Court for the District of New Jersey determined that the defendant communicated allegedly false information to the credit reporting agency that uses the information to assess her creditworthiness, which is enough for her to have standing to sue.
- But just because she has standing does not mean she has a case. There is nothing in the way that the defendant furnished the information that made it look like the plaintiff’s obligations were more than they were. In fact, Judge Martini noted, showing an obligation of $0.00 would be more misleading because it would incorrectly suggest that the plaintiff doesn’t owe anything.
