A District Court judge in Tennessee has granted a defendant’s motion to dismiss claims it violated the Fair Credit Reporting Act over claims it misreported the plaintiff’s mortgage payment as being late. Ultimately, the judge concluded that the plaintiff failed to allege facts sufficient to trigger the defendant’s statutory duties as a furnisher of information and, in several instances, relied on provisions of the FCRA that do not apply to furnishers at all.
The background: The plaintiff alleged that he made a timely mortgage payment, but that the defendant reported it as late to a credit reporting agency.
- The plaintiff sent written disputes regarding the alleged late payment to the credit bureau, the defendant, and various regulators, according to the complaint.
- He also filed a complaint with the Consumer Financial Protection Bureau, which responded that it had contacted data furnishers and asked them to verify the disputed information.
- The plaintiff, proceeding without counsel, initially filed suit in state court and later amended his complaint after the case was removed to federal court. He asserted claims for failure to conduct a reasonable investigation, failure to ensure maximum possible accuracy, and negligence and willful misreporting.
The ruling: Judge Travis R. McDonough of the District Court for the Eastern District of Tennessee found that the plaintiff’s claims failed as a matter of law for several independent reasons.
- First, with respect to the alleged failure to conduct a reasonable investigation under Section 1681s-2(b), the judge emphasized that a furnisher’s duty to investigate is triggered only after it receives notice of a dispute from a credit reporting agency, not directly from the consumer. As the court explained, “Directly contacting the furnisher of credit information does not actuate the furnisher’s obligation to investigate a complaint.” The amended complaint did not allege that any credit reporting agency notified the defendant of the dispute.
- Second, the court dismissed the claim for failure to ensure maximum possible accuracy, noting that this obligation applies only to consumer reporting agencies, not to furnishers.
- Finally, Judge McDonough rejected the negligence and willful misreporting claims, explaining that consumers cannot privately enforce the FCRA’s requirement that furnishers initially provide accurate information, and that any parallel state law claims are preempted.
