The Court of Appeals for the Ninth Circuit has reversed a ruling in a Fair Credit Reporting Act and Rosenthal Fair Debt Collection Practices Act case over whether information that was furnished to the credit reporting agencies was accurate enough. This decision comes after a lawsuit was filed by the plaintiff over inaccurate loan reporting.
The background: The plaintiffs filed a lawsuit after a vehicle loan they had refinanced and paid off was reported to the credit bureaus as still having an unpaid balance, resulting in inaccuracies in their credit report.
- The dispute arose when the plaintiff challenged the reported balance, asserting that the credit reporting agencies were misled by the inaccurate loan data furnished by the defendant.
- The plaintiff filed a claim under the FCRA for failing to correct the inaccuracies and under the RFDCPA for improper debt collection practices related to the reporting of the loan.
- A District Court judge granted the defendant’s motion for summary judgment finding that no genuine dispute of fact that the defendant’s reporting was not “patently incorrect.”
The ruling: The Ninth Circuit Court found that while the district court was correct in its ruling that the loan’s reported balance was not “patently incorrect” and therefore did not violate the FCRA, the court erred by not considering whether the information was “materially misleading.”
- The court noted that even if the information is technically correct, it can still be considered misleading if it fails to reflect a bona fide dispute between the plaintiff and the defendant regarding the loan balance.
- In this case, the defendant did not report that the plaintiff disputed the remaining balance, which was a significant issue.
- The court found that the defendant failed to adequately investigate the dispute or update the credit reports to reflect this dispute.
- The Ninth Circuit further held that this error in dismissing the FCRA claim also led to the wrongful dismissal of the plaintiff’s claim under the Rosenthal Act. Consequently, the court vacated the summary judgment issued by the district court and remanded the case for further proceedings, allowing the plaintiff’s claims under both the FCRA and Rosenthal Act to proceed.
