To have standing means to have suffered a concrete injury. But what about if you knew that any attempt at obtaining credit would be futile. Isn’t that enough? A District Court judge in New York said it isn’t enough, granting a motion to dismiss filed by two defendants in a Fair Credit Reporting Act lawsuit.
The background: The plaintiff reviewed her credit report and discovered what she claimed was an inaccurate account reflecting a defaulted federal student loan that she said was the result of identity theft. She disputed the account with the defendants and provided documentation, including an identity theft report.
- Nonetheless, the disputed account remained on her credit report. The plaintiff alleged that she wanted to attend nursing school but did not apply for admission or for student loans because she believed any attempt to obtain financing would have been futile given the reported default.
- She argued that this belief, and the decision not to apply for credit, constituted an injury sufficient to establish standing under the FCRA.
The ruling: Judge Brian M. Cogan of the District Court for the Eastern District of New York rejected the plaintiff’s argument, relying heavily on the Supreme Court’s decision in TransUnion LLC v. Ramirez.
- The judge wrote that “there is no ‘futility exception’ to TransUnion,” and that a plaintiff cannot establish standing by pointing to credit applications that were never made.
- The mere presence of an inaccuracy in a credit file that is not disseminated to a third party does not create concrete harm, the judge noted.
- Quoting TransUnion, Judge Cogan wrote that undisclosed inaccuracies are like “a defamatory letter” that is written “and then stored in her desk drawer.”
- The plaintiff’s belief that she would have been denied student loans was speculative, and there was nothing prevented her from applying and contesting the alleged default with a lender, the judge ruled.
