A District Court judge in California has granted a defendant’s motion for summary judgment that it did not violate the Fair Debt Collection Practices Act but denied the motion over claims it violated the Fair Credit Reporting Act by not reasonably investigating an identity theft dispute, partially because it did not compare call recordings against one another going back eight years.
The background: The plaintiff came to the United States briefly in 2009 before moving back to the Ukraine. While here, he obtained a Social Security number. In 2023, he and his wife moved to the States.
- It was then that the plaintiff learned there was a negative tradeline on his credit report tied to a credit card account he says was fraudulently opened in his name. The account, originally issued in 2015, reflected years of transactions and payments before being closed in 2018 and later sold in 2019.
- The plaintiff filed disputes with all three major credit reporting agencies, submitting supporting documentation including a police report, an FTC identity theft affidavit, copies of his passport, bank records from Ukraine, and proof of residence in California.
- The defendant investigated the disputes and concluded that the plaintiff was responsible for the accounts and confirmed the information filed with the credit reporting agencies was accurate.
- The plaintiff brought claims under the FDCPA, FCRA, California Identity Theft Act, and California Consumer Credit Reporting Agencies Act.
The ruling:Judge Eumi K. Lee of the District Court for the Northern District of California sided with the defendant on the FDCPA claim, finding it was not a “debt collector” under the law since it was acting as a creditor collecting its own accounts. The court also dismissed the state-law claims under California’s Identity Theft Act and Consumer Credit Reporting Agencies Act.
- However, Judge Lee found a triable issue on the FCRA claim. Her ruling emphasized that a jury could determine whether the defendant’s investigation of the dispute was reasonable.
- The judge noted that the defendant held call recordings from 2017 and 2018 that could have been compared against recent calls with the plaintiff in 2023, but agents did not listen to them. The court pointed out that internal procedures directed agents to review such recordings and consumer-provided documents, yet testimony revealed those steps were often skipped.
- Judge Lee also noted evidence suggesting agents were pressured to process dozens of disputes per day, which may have contributed to lapses in review.
