A District Court judge in Mississippi has granted in part and denied in part a defendant’s motion to dismiss a Fair Credit Reporting Act lawsuit, allowing the plaintiff’s accuracy and reinvestigation claims to proceed to discovery while dismissing her claim that promotional inquiries on her credit report lacked a permissible purpose.
The background: Last year, the plaintiff, who is representing herself, sued the defendant in state court in Mississippi, alleging her credit report contained multiple inaccurate, outdated, and unverifiable accounts. The defendant removed the case to federal court.
- Late last year, the court dismissed the original complaint for falling below the pleading standard, but gave the plaintiff a chance to amend in light of her self-represented status.
- In her amended complaint, the plaintiff alleged that nine accounts, including charge-offs, late payments, and one account she claimed was fraudulent, remained on her report even after the defendant investigated her disputes, verified the accounts as accurate, and deleted two others.
- The plaintiff alleged she disputed the accounts over the course of a year without ever receiving documentation verifying the delinquencies, and that the defendant refused to share information about the procedures it used during its reinvestigation.
- She also alleged that once she served the summons in the lawsuit, the defendant removed all of the disputed accounts from her credit file.
- Separately, she claimed her report included unauthorized promotional inquiries from four companies with which she had no accounts, applications, or business relationships.
- The defendant argued the amended complaint failed to identify what exactly was inaccurate, why it was inaccurate, or how the accounts should have been reported, calling the allegations nothing more than the plaintiff’s subjective belief.
The ruling: Judge Sharion Aycock of the District Court for the Northern District of Mississippi denied the motion to dismiss with respect to the accuracy and reinvestigation claims, but granted it on the permissible purpose claim.
- Judge Aycock wrote that the case the defendant relied on to attack the sufficiency of the allegations was decided at the summary judgment stage, where “an entirely different standard of review” applies than on a motion to dismiss.
- While acknowledging the plaintiff’s allegations were “relatively sparse,” the judge found she had alleged enough to proceed, pointing to her claims that the report was inaccurate, that her request for information about the defendant’s procedures was denied, and that the disputed accounts were deleted only after she completed service of process. Discovery, the judge noted, will shed light on the veracity of the allegations.
- The permissible purpose claim was dismissed with prejudice because the FCRA allows a credit reporting agency to share limited consumer information without consent for firm offers of credit or insurance, and the plaintiff alleged no facts suggesting the defendant lacked a statutory basis for the promotional inquiries.
- The plaintiff’s willful and negligent noncompliance claims will proceed alongside the surviving claims.
- The judge closed with a warning, noting the court had extended leniency after the plaintiff missed the deadline to respond to the motion, but that she “should not expect leniency throughout this litigation.”
