The Court of Appeals for the Eleventh Circuit has affirmed a trial ruling in favor of a defendant that was sued for allegedly violating the Fair Credit Reporting Act by reporting inaccurate information to the credit reporting agencies and for not reasonably investigating disputes filed by the plaintiff.
The background: The plaintiff had personal and business loans with the defendant and signed a personal guarantee for the business loans. The defendant’s position was that the plaintiff’s personal loan had been accelerated as part of its standard procedure for loans deemed uncollectable. When the defendant decided to charge off the loans, including the personal loan, they reported the personal loan as past due, which the plaintiff disputed.
- The plaintiff maintained that no payment was missed and that the account should not have been reported as overdue.
- The plaintiff claimed that the defendant’s report to the credit reporting agencies was inaccurate and that the defendant failed to reasonably investigate disputes about the account.
- After receiving multiple disputes from the plaintiff, the defendant conducted an internal investigation but did not find any error in their reporting. This led to the plaintiff filing a lawsuit alleging violations of the FCRA.
- The case went to trial and a jury ruled in favor of the defendant. The plaintiff filed post-trial motions, which were denied, and then appealed the ruling to the Eleventh Circuit.
The ruling: The appellate court noted that under the FCRA, for a claim of inaccurate reporting to be valid, the reported information must be “factually incorrect, objectively likely to mislead its intended user, or both.” The court further explained that legal questions regarding whether an account had been “accelerated” were not sufficiently settled to constitute an actionable inaccuracy under the FCRA, given the lack of clear precedent under Georgia law regarding whether a charge-off can be treated as an acceleration.
- Additionally, the court highlighted that the defendant provided testimony that supported the accuracy of its reporting and the reasonableness of its investigation, noting that the plaintiff’s arguments were based on a misunderstanding of how charge-offs and accelerations were treated under the terms of the loan agreements.
- The court also affirmed the denial of the plaintiff’s motion for a new trial, stating that the jury’s verdict was not against the weight of the evidence presented during the trial.
