A District Court judge in New Jersey has granted a defendant’s motion to dismiss claims it violated the Fair Credit Reporting Act by not adequately investigating her claims that the debts in question ended up on her credit report because of identity theft.
The background: The plaintiff, representing herself, alleged that a student loan servicer improperly reported negative information tied to a student loan account to consumer reporting agencies after the account was supposedly transferred from the original creditor.
- The plaintiff claimed she never agreed to any relationship with the defendant and argued the account resulted from identity theft. She sent multiple dispute letters, including police reports and FTC identity theft affidavits, demanding the account be deleted from her credit reports.
- The plaintiff also alleged the defendant failed to conduct a reasonable investigation after receiving disputes from both the plaintiff and the credit bureaus. She further claimed the defendant re-reported the account after it had allegedly been deleted by the credit reporting agencies.
- In addition to the FCRA claims, the plaintiff asserted claims under the Fair Debt Collection Practices Act, Electronic Funds Transfer Act, and even federal aggravated identity theft statutes, while also alleging unauthorized withdrawals from her bank account and harassing collection activity.
The ruling: Judge Georgette Castner of the District Court for the District of New Jersey dismissed the case, finding the plaintiff failed to plausibly allege the information furnished to the credit bureaus was inaccurate.
- The judge noted the plaintiff admitted she originally took out the student loan in 2015. The judge also pointed to documents attached to the complaint showing the defendant became the loan servicer in October 2024 after the original creditor transferred the loan’s servicing rights.
- The opinion stated that the plaintiff’s own exhibits contradicted her allegations that the account resulted from identity theft or that the defendant lacked authority to service the loan.
- Judge Castner wrote that “other than Plaintiff’s allegation that Defendant is not the proper entity servicing Plaintiff’s Discover loan, which is contradicted by Plaintiff’s own exhibits, Plaintiff has not alleged that Defendant furnished inaccurate information to the CRAs.”
- The judge also dismissed the plaintiff’s FDCPA claims after finding the defendant acted as a loan servicer rather than a debt collector because the account was not in default when servicing transferred.
- Another operational nuance in the ruling involved the judge rejecting the plaintiff’s argument that furnishing information to a credit bureau necessarily means a furnisher improperly accessed a consumer report. The judge explained that the FCRA contemplates furnishers supplying information to credit bureaus, not pulling consumer reports in order to furnish information.
