A District Court judge in Washington, D.C. has dismissed a lawsuit accusing a bank of violating the Fair Credit Reporting Act by furnishing inaccurate delinquency information tied to several credit card accounts.
The background: The plaintiff alleged the bank inaccurately reported 24 delinquent or late payment entries to the major credit bureaus during 2024, causing her credit score to drop by more than 130 points.
- The allegedly inaccurate reporting resulted in higher interest rates, lost financial opportunities, reputational harm, emotional distress, and denial of access to credit products, according to the plaintiff’s complaint. The plaintiff also alleged the bank assessed multiple late fees ranging from $25 to $40 tied to the disputed delinquencies.
- The plaintiff brought claims under the FCRA, the Consumer Financial Protection Act, breach of contract, and defamation. She also argued the inaccurate reporting may have resulted from a “system error” and claimed she disputed the reporting with the bank.
The ruling: Judge Timothy J. Kelly of the District Court for the District of Columbia dismissed the case, finding the plaintiff failed to plausibly allege a valid claim under either subsection of Section 1681s-2 of the FCRA.
- The judge explained that while Section 1681s-2(b) allows private lawsuits against furnishers, liability only arises after the furnisher receives notice of a dispute from a credit reporting agency, not simply from the consumer directly.
- The plaintiff never alleged the bank received dispute notice from a credit bureau, which the judge described as a required element of an FCRA furnisher claim.
- Judge Kelly also found the plaintiff merely offered conclusory allegations that the bank failed to conduct a reasonable investigation, without factual allegations supporting that assertion.
- The plaintiff’s CFPA claim was also dismissed after the judge explained the statute does not provide a private right of action and can only be enforced by the Consumer Financial Protection Bureau and certain government officials.
- The ruling also addressed a breach of contract claim tied to allegedly improper late fees. The judge found the plaintiff failed to identify any actual provision of the cardholder agreement that was breached, even assuming the fees themselves may have been imposed incorrectly.
- Another important operational takeaway in the ruling involved the court’s treatment of the plaintiff’s defamation claim. Judge Kelly found the claim was preempted by the FCRA because the allegations centered on furnishing information to credit reporting agencies, and the plaintiff failed to plausibly allege malice or willful intent to injure.
