In order to accuse someone of violating the Fair Credit Reporting Act for reporting inaccurate information to a credit reporting agency, there is one important step that has to happen before filing the lawsuit: the consumer has to dispute the debt. A District Court judge in Louisiana has granted a defendant’s motion to dismiss an amended complaint in an FCRA case because the plaintiff failed to meet this crucial requirement.
The background: The plaintiff, proceeding without legal representation, alleged that her vehicle lender violated several laws, including the FCRA, after reporting her delinquent account status to credit bureaus. The dispute arose when the plaintiff claimed the lender had agreed to modify the terms of her car loan by implementing a payment plan to address her financial challenges. According to the plaintiff, the lender assured her that participation in the plan would prevent negative credit reporting.
- However, the lender reported her payments as delinquent, adhering to the terms of the original contract. The plaintiff argued this action violated the FCRA and caused her emotional and financial distress, particularly during her attempt to secure financing for a home purchase. She further alleged that the lender’s actions were fraudulent and deceptive.
The ruling: Judge Ivan L.R. Lemelle of the District Court for the Eastern District of Louisiana dismissed the case, finding the plaintiff’s claims under the FCRA were not plausible. The judge noted that the plaintiff did not dispute the accuracy of the reported information with the credit reporting agencies before filing her lawsuit.
- Under the FCRA, a consumer must dispute the information with a credit bureau, which then must notify the furnisher (in this case, the lender) of the dispute. The furnisher must investigate and take corrective action if necessary. Without this process, an FCRA claim cannot proceed.
- Additionally, the court found no evidence of fraudulent intent or misrepresentation by the lender. While the plaintiff alleged she was misled about the payment plan, she failed to produce written confirmation of the alleged contract modification, a requirement previously outlined by the court.
