Judge Grants MTD in FCRA Case Over Ownership of Debt

A District Court judge in Illinois has granted a defendant’s motion to dismiss after it was sued for violating the Fair Credit Reporting Act because it allegedly did not conduct a reasonable investigation into a dispute, among other claims.

A copy of the ruling in the case of Harris v. Equifax Information Service, LLC can be accessed by clicking here.

The plaintiff incurred a debt with Credit One Bank that was subsequently collected upon by LVNV Funding. The plaintiff sent two letters to LVNV seeking clarification on the debt. LVNV reported the debt to the defendant, but did not note that the account was being disputed. In the second letter to LVNV, the plaintiff asked for documentation to prove the validity of the debt. The documentation that was sent back to the plaintiff allegedly did not include any evidence to support that LVNV owned the debt.

The plaintiff sent a letter to the defendant, stating the inaccurate information was being reported on her credit report. The defendant did not respond to the letter and the plaintiff subsequently filed suit, alleging the defendant violated Section 1681i(a) of the FCRA by failing to conduct a reasonable investigation, Section 1691i(a)(5) by failing to delete inaccurate information, and Section 1682e(b) by failing to follow reasonable procedures to assure the maximum possible accuracy of the debt.

The defendant argued that the plaintiff failed to allege that her credit report contained inaccurate information and that she can not use the FCRA to attack the validity of the debt, which is where Judge Franklin Valderrama of the District Court for the Northern District of Illinois, Eastern Division, focused most of his ruling.

Judge Valderrama noted that the Seventh Circuit Court of Appeals had previously ruled in Denan v. TransUnion that the FCRA does not compel credit reporting agencies to determine the legal validity of a debt, whereas the plaintiff’s precedent was issued more than two decades ago and involved the ownership of a corporation and had nothing to do with the FCRA.

As such, the plaintiff can not pursue claims under Section 1681e(b) or 1681i(a) of the FCRA unless a court concludes that LVNV does not own the plaintiff’s debt, Judge Valderrama ruled.

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