A District Court judge in Indiana has dismissed claims against one credit reporting agency and granted another a motion for summary judgment in a Fair Credit Reporting Act case involving credit reporting, disputes, and bankruptcy. The suit centered around allegations that the CRAs violated the FCRA by inaccurately reporting a reaffirmed automobile loan as included in bankruptcy.
The Background: Shortly after buying a vehicle financing its purchase, the plaintiffs filed for bankruptcy protection received a bankruptcy discharge. As part of the bankruptcy proceedings, they reaffirmed the automobile loan, intending to keep the vehicle and continue making payments. However, upon accessing their credit reports from the defendants in 2021, they discovered that the loan was being reported as included in bankruptcy, with no payment history reflected.
- The plaintiffs disputed this reporting with the CRAs, providing documentation to prove the loan was reaffirmed and payments were ongoing.
- Despite this, the CRAs continued to report the loan inaccurately, according to the complaint.
The Ruling: Judge Jane Magnus-Stinson of the District Court for the Southern District of Indiana ruled that determining the validity of the reaffirmation agreement was a legal issue beyond the scope of the CRAs’ obligations under the FCRA. The CRAs are not required to make legal determinations, but can rely on information provided by furnishers, in this case, the auto lender, which reported that the loan was included in the bankruptcy.
- One of the CRAs demonstrated that it followed reasonable procedures by using the Automated Consumer Dispute Verification (ACDV) process to verify the status of the loan with the lender, Judge Magnus-Stinson noted.
- As well, the plaintiffs failed to show that they suffered actual damages directly attributable to the defendants’ reporting, especially because there was no evidence that the plaintiffs’ information was disseminated to third parties.
