A District Court judge in Indiana has denied motions to dismiss filed by a creditor and a credit reporting agency in a Fair Credit Reporting Act case over how how a credit card debt was reported and what happened after the plaintiff disputed the debt.
The background: The case centers on a credit card account that the plaintiff claims was inaccurately reported as 30 days late during a period when he was seeking new credit. The allegedly inaccurate late payment caused a significant drop in the plaintiff’s credit score and resulted in denied credit and other damages, according to the complaint.
- After learning of the issue, the plaintiff disputed the account, first informally and later through written disputes sent to the credit reporting agency. The complaint alleges that the credit reporting agency forwarded the dispute to the furnisher, triggering investigation obligations under the FCRA. Despite those disputes, the late payment and related score impact allegedly remained on the plaintiff’s credit report for months.
- The plaintiff sued under multiple provisions of the FCRA, including claims that the furnisher failed to reasonably investigate and correct inaccurate information and that the credit reporting agency failed to follow reasonable procedures to assure maximum possible accuracy and to properly reinvestigate after receiving notice of the dispute.
The ruling: Judge Tanya Walton Pratt of the District Court for the Southern District of Indiana rejected arguments that the claims should be dismissed as time-barred, finding that at least some of the dispute-related claims were timely based on when the plaintiff notified the credit reporting agency and when the lawsuit was filed.
- On the merits, Judge Pratt emphasized that a motion to dismiss does not test whether the plaintiff will ultimately win, only whether the complaint plausibly alleges a violation. The judge noted that the plaintiff identified a specific account, a specific billing cycle, and a specific late payment that he claims was inaccurate, which was enough at this stage.
- In denying the motions, the judge ruled that if the furnisher attempted to correct the late payment, “there would be no need for a correction” unless the information was inaccurate, undercutting arguments that no plausible FCRA violation was alleged.
- Judge Pratt also pointed to allegations that the inaccurate information continued to be reported even after disputes were submitted, which, if proven, could support claims that the investigation and reinvestigation efforts were unreasonable.
Read the ruling.
