A District Court judge in Illinois has denied a defendant’s motion for judgment on the pleadings in a Fair Credit Reporting Act case that stemmed from the defendant disabling the autopay feature on the plaintiff’s account, after it had been used to make 95 monthly payments in a row.
The background: The plaintiff opened a credit card with the defendant in 2015 and established autopay for his account. After nearly eight years of timely payments, the defendant did not process the autopay for a $67.50 charge in December of 2022. This resulted in the account being reported to the credit reporting agencies as overdue for January and February 2023.
- The plaintiff only discovered the issue upon receiving a past-due notice from the defendant in February 2023. He subsequently learned that the autopay feature had been disabled unilaterally by the defendant without notice or consent.
- The overdue status, reported to credit agencies, caused the plaintiff’s credit score to drop by approximately 100 points. Efforts to have the negative information removed were unsuccessful, and the plaintiff ultimately received an interest rate on a mortgage application that was significantly lower than what it would have been if his credit score had not dropped.
- The plaintiff filed suit in July 2023, alleging the defendant’s actions violated the FCRA by providing materially misleading information to credit reporting agencies.
The ruling: Judge Mary M. Rowland of the Northern District of Illinois denied the defendant’s motion to dismiss, finding that the plaintiff sufficiently stated a claim under the FCRA. The court highlighted that the plaintiff’s allegations — asserting that the defendant’s actions led to materially misleading credit reporting — warranted further examination.
- The defendant argued that the reported information was technically accurate and that evaluating fault in disabling autopay would require a legal determination. However, Judge Rowland emphasized that determining whether the information was incomplete or misleading falls under the factual domain of FCRA disputes. The plaintiff contended that a reasonable investigation by the defendant would have revealed its unilateral action as the root cause of the missed payments.
