A District Court judge in Massachusetts has denied a defendant’s motion to dismiss a Fair Credit Reporting Act lawsuit accusing a consumer reporting agency of falsely reporting that the plaintiff had sought treatment for alcohol abuse.
The background: The case grew out of a denied life insurance application.
- In 2023, the plaintiff, a New Jersey resident, applied for life insurance and was turned down. He traced the denial to a consumer report the defendant had prepared, which stated he sought or was seeking treatment for alcohol abuse. That was not true.
- The plaintiff disputed the report. Without ever contacting him, the defendant told him the information had been verified as accurate, pointing to a New York doctor’s visit in late 2022 to discuss alcohol abuse treatment. That visit had not happened either.
- He disputed a second time in writing, sending his driver’s license, Social Security card, and a copy of an identity theft report he had filed with the Federal Trade Commission. The defendant then deleted the information.
- The plaintiff said the ordeal cost him “postage paid, wasted ink and paper, and wasted time,” along with mental anguish and the loss of the life insurance he could not obtain.
- He later sued, claiming the defendant failed to follow reasonable procedures to ensure the report’s accuracy and failed to reasonably reinvestigate once he flagged the error.
The ruling: Judge Brian E. Murphy of the District Court for the District of Massachusetts denied the motion, finding the plaintiff had pleaded enough to proceed on both claims.
- On the accuracy claim, the defendant disputed only whether its procedures were reasonable. Judge Murphy found the allegations plausible and noted that reasonableness is usually a question of fact for a jury, not one to resolve on a motion to dismiss.
- On the reinvestigation claim, the plaintiff alleged the defendant never independently investigated, never contacted him or any witnesses, and simply relied on an outside furnisher to confirm the data. The judge flagged that the furnisher the defendant leaned on to verify the report was the very same one that had supplied the inaccurate information in the first place.
- The plaintiff also alleged the defendant prevents its agents from calling consumers or witnesses during the dispute process.
- The judge was unpersuaded by the defendant’s authorities, most of which were summary judgment decisions decided on full factual records. He said those citations only reinforced that the reasonableness questions were premature at the pleading stage.
