A District Court judge in New York has granted a motion to dismiss filed by defendants in a Fair Credit Reporting Act lawsuit where the plaintiff claimed that someone else was purchasing a vehicle for him, but the documents indicate otherwise, even after the plaintiff claimed to have been taken advantage of and had his identity stolen by the someone else.
The background: The case stemmed from a 2021 vehicle purchase in which the plaintiff was accompanied by another individual to a dealership and selected a used Chevrolet Camaro. According to the record, the plaintiff provided his driver’s license and signed multiple documents associated with the purchase, including the retail installment sales contract that ultimately created the financing account at issue.
- Despite later claiming that he believed the vehicle was being purchased as a gift and that he did not intend to take on financial responsibility, the plaintiff acknowledged that his signature appeared on all relevant documents. Over time, the account was serviced, more than 20 payments were made, and the plaintiff even insured and drove the vehicle until it was repossessed.
- The lender sent multiple communications regarding the account, and the plaintiff participated in phone calls verifying his personal information.
- Years later, after reviewing his credit report, the plaintiff disputed the account with consumer reporting agencies, asserting identity theft and claiming he was not responsible for the debt.
- The credit bureaus conducted reinvestigations and, after confirming the account details with the furnisher, declined to remove the tradeline.
- The plaintiff then filed suit, alleging violations of the FCRA.
The ruling: Judge Brian M. Cogan of the District Court for the Eastern District of New York focused on a threshold issue that will be familiar to industry professionals: whether or not the reported information was inaccurate. Without an inaccuracy, the plaintiff’s claims could not proceed.
- Judge Cogan concluded that no reasonable jury could find the account to be inaccurate, emphasizing that the plaintiff personally participated in the transaction and signed the governing documents.
- The opinion makes this point clearly: “because plaintiff signed the purchase documents, the car was his.”
- The judge also rejected the argument that the plaintiff’s lack of memory or understanding of the transaction created a factual dispute, noting that a failure to recall signing documents is not the same as denying that the signatures are valid. Additionally, even if the plaintiff had been misled by another individual, the judge found that such circumstances do not create an “objectively and readily verifiable” inaccuracy under the FCRA.
- Importantly for furnishers and CRAs, Judge Cogan reiterated that they are entitled to rely on the information provided by the consumer at the time of the transaction and are not required to resolve complex factual disputes about how or why a contract was signed.
- Although the judge acknowledged a technical violation related to the timing of the agencies’ response to the identity theft claim, he ultimately found no damages because there was no causal link between the alleged violation and any harm.
