The Court of Appeals for the Eleventh Circuit has affirmed the dismissal of a Fair Credit Reporting Act lawsuit that claimed a credit reporting agency was publishing inaccurate information about the plaintiffs, ruling that differentiating between the victim of a fraud and the perpetrator of that fraud is not always as easy as it sounds.
The background: The plaintiffs opened a joint checking account with Bank of America and later became involved in what they described as an employment scam. A check for $21,900 was sent to one of the plaintiffs as part of a job onboarding process. He deposited the check and was then instructed to wire funds elsewhere.
- Sensing something was wrong, the plaintiff asked Bank of America to cancel the deposit and reported the incident to the FBI. However, Bank of America closed all of the plaintiffs’ related accounts and reported the incident as “Checking Account Fraud” to two consumer reporting agencies: Early Warning Services and Chex Systems.
- The plaintiffs disputed the fraud designation, claiming they were victims, not the perpetrators, and provided documentation, including the FBI report. Early Warning and Bank of America both reviewed the dispute and stood by their reporting. The plaintiffs subsequently sued, alleging the defendants violated Section 1681i and 1681e(b) of the FCRA, claiming the report was inaccurate and that the agency failed to correct it.
The ruling: The Eleventh Circuit sided with the lower court, finding the plaintiffs could not meet a critical requirement under the FCRA: proving the disputed information was “objectively and readily verifiable.”
- The court explained that while credit reporting agencies must follow reasonable procedures to ensure the “maximum possible accuracy” of information, this doesn’t extend to verifying complex factual narratives. Determining whether the plaintiffs were victims or perpetrators of fraud, the court noted, “was not the type of ‘straightforward application of law to facts’ that Early Warning could objectively and readily verify.”
- The panel emphasized that while the plaintiffs claimed a “clear delineation” existed between victim and perpetrator, they failed to demonstrate how the credit bureau could verify that distinction without relying solely on their own statements.
- In affirming the dismissal, the court quoted from Holden v. Holiday Inn Club Vacations Inc., reiterating that consumer reporting agencies are not well-positioned to resolve factual disputes of this nature:
