Judge Denies MTD in FCRA Case Over Lack of Investigation

A District Court judge has denied a defendant’s motion to dismiss after it was sued for violating the Fair Credit Reporting Act because it did not perform a reasonable investigation into a dispute even though the plaintiff disputed the debt 42 times with three different credit bureaus.

A copy of the ruling in the case of Ardoin v. Citibank can be accessed by clicking here.

The plaintiff paid off the balance on a retail credit card managed by the defendant in 2017. But the plaintiff alleges that the defendant instead reported the debt to the credit bureaus as charged off, which negatively affected his credit rating. The plaintiff disputed the notation 42 times with the three major credit bureaus, each of which should have triggered a notification from the credit bureau to the creditor and then an investigation into the dispute by the furnisher. The plaintiff accused the credit bureaus and the furnisher of not performing a reasonable investigation.

The defendants attempted to claim the allegations were time-barred under the FCRA’s two-year statute of limitations. The first disputes were filed with the credit bureaus in 2017 and the plaintiff filed his lawsuit more than three years later. The defendant noted several precedents that determined filing additional reports regarding the same allegedly inaccurate information can not restart a statute of limitations clock under the FCRA.

But Judge James Cain, Jr., of the District Court for the Western District of Louisiana, Lake Charles Division, ruled that each new dispute filed by the plaintiff created a new duty by the defendants to investigate the debt and each failure to do so starts a new clock on the statute of limitations.

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