If two consumers dispute a debt and the furnisher submits corrections to how the debt is being furnished, how can the consumers claim the investigation that was conducted was unreasonable? They can’t, the Court of Appeals for the Ninth Circuit has ruled, affirming a lower court’s ruling.
The Background: The plaintiffs submitted a dispute via the Automated Consumer Dispute Verification (ACDV) system, indicating that the defendant was reporting inaccurate information about their loan. The issue was the compliance condition code that the furnisher was using, but the dispute didn’t mention that.
- While the dispute didn’t mention that the furnisher may have been using an inaccurate condition code, after the investigation was conducted, the defendant discovered that the plaintiffs’ credit reports were displaying a “D” code for several months after it had determined that it should have been displaying a “0” code. So the defendant submitted corrections regarding the plaintiffs’ payment history.
- The plaintiffs filed suit and a District Court judge granted summary judgment for the defendant.
The Ruling: To win, the plaintiffs needed to prove that the defendant failed to reasonably investigate the inaccuracy after receiving notice of the dispute. But they failed to raise a genuine dispute of material fact about the reasonableness of the investigation conducted by the defendant, according to the ruling.
- The court could only draw one conclusion from the fact the defendant corrected the code it was using when furnishing information about the plaintiffs’ debt — that the investigation into the dispute was reasonable.
