A District Court judge in Pennsylvania has granted a defendant’s motion to dismiss a Fair Credit Reporting Act lawsuit filed by a married couple over allegedly inaccurate reporting of late payments, ruling the claim was filed too late.
The background: One of the plaintiffs opened a credit card account with the defendant in 2015 and paid his bills on time for years.
- In June 2022, the defendant inaccurately informed him that he had missed a monthly minimum payment and then reported to the credit reporting agencies that he had paid late, dropping his credit score from 850 to 711. His account was closed shortly after.
- His wife had her own credit card with the defendant. After switching banks, she made a $1,250 payment on her account, was told she was late, and made another $750 payment. The defendant posted both payments to her husband’s account, which by then had been closed for nearly two years.
- The defendant acknowledged the mistake and said it would move the money to the correct account, but still told her she was late and reported her payments as untimely, lowering her credit score as well.
- In September 2022, the wife disputed the reporting with Experian, alleging the defendant had mishandled both accounts. The defendant was allegedly made aware of the dispute but failed to investigate or resolve it.
- Last August, the plaintiffs filed suit, originally asserting claims under the Fair Debt Collection Practices Act and the FCRA. They amended their complaint three times, eventually dropping the first claim, and the defendant moved to dismiss the third amended complaint, arguing the FCRA claim was time-barred.
The ruling: Judge John F. Murphy of the District Court for the Eastern District of Pennsylvania granted the motion and dismissed the case with prejudice.
- Judge Murphy wrote that FCRA claims must be filed within two years of when the plaintiff discovers the violation or five years of when the violation occurs, whichever comes first.
- The FCRA does not allow consumers to sue a furnisher simply for reporting inaccurate information. Liability attaches only when the furnisher fails to reasonably investigate after being notified of a dispute by a credit reporting agency, and that notice cannot come directly from the consumer.
- The plaintiffs never alleged when Experian notified the defendant of their dispute. Instead, they argued they did not know when the defendant failed to investigate and therefore should not be held to the two-year limit. Judge Murphy disagreed, writing that crediting that claimed ignorance “would render the two-year statute of limitations so easily avoided as to be meaningless.”
- A reasonably diligent investigation before filing suit, the judge noted, would have revealed when, if ever, Experian notified the defendant.
- The allegedly inaccurate reporting of the wife’s payments in 2024 did not save the claim. That episode was separated from the original violation by nearly two years, making it an independent event that required its own dispute through a credit reporting agency, which the plaintiffs never alleged they filed.
- Having given the plaintiffs four opportunities to adequately plead their claim, the judge ruled that further amendment would be futile and dismissed the case with prejudice.
