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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
Here is a situation that should make every furnisher’s compliance team sit up a little straighter. A debt buyer is facing a lawsuit in the South Carolina federal court alleging violations of the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and South Carolina common law, all stemming from two credit card accounts the plaintiff says were opened by an identity thief. The twist that gives this case its teeth: the defendant allegedly dismissed its own collection lawsuit against the plaintiff with prejudice after being presented with a police report, yet kept reporting and verifying the accounts as belonging to the plaintiff for months afterward.
The background: In December 2025, the defendant sued the plaintiff in an effort to collect on two credit card accounts that originated with a bank before being sold to the defendant.
- The accounts did not belong to the plaintiff, who never applied for or received a card from the original creditor, according to the complaint.
- After being served, the plaintiff checked his credit reports and discovered he was the victim of identity theft, finding unfamiliar accounts, addresses, and phone numbers.
- The plaintiff sent dispute letters to all three major credit reporting agencies, specifically identifying the defendant’s tradelines and the defendant’s unauthorized hard inquiries as fraudulent.
- He filed an answer to the collection suit denying liability and attached a copy of the police report he filed about the theft of his identity.
- The same day, the defendant agreed to dismiss its collection lawsuit with prejudice, and the court entered the dismissal the following month.
- Despite that, the defendant allegedly verified the accounts as accurate when the disputes were forwarded to it, and the tradelines continued to appear as derogatory collection accounts.
- The plaintiff sent multiple rounds of follow-up disputes between February and May 2026, attaching the police report, the stipulation of dismissal, and identity documents. The complaint alleges that the plaintiff’s reports were viewed by more than two dozen creditors and other companies during that time.
The claims: The complaint accuses the defendant of both negligently and willfully violating Sections 1681s-2(b)(1)(A) through (E) of the FCRA by failing to conduct a reasonable investigation of the disputes, failing to review the information provided by the credit reporting agencies, reporting inaccurate investigation results, failing to notify all of the agencies that the reporting was inaccurate, and failing to delete or block the disputed information.
- The complaint also accuses the defendant of violating Sections 1692e(2)(A), 1692e(8), 1692e(10), and 1692f of the FDCPA by misrepresenting the character, amount, and legal status of the debt, communicating information it knew or should have known was false, and using deceptive and unfair means to collect, even after dismissing its collection suit with prejudice.
- Rounding out the complaint are state common law claims for defamation and for negligent and reckless training and supervision.
