Judge Grants MTD in FCRA Case Over Discrepancy in Debt Amounts Furnished to CRA

A District Court judge in Maryland has granted a defendant’s motion to dismiss, ruling that a plaintiff lacked standing to claim the defendant violated the Fair Credit Reporting Act when it furnished information that the amount that was past due on a loan was less than the amount that had been written off.

A copy of the ruling in the case of Arriaza v. Experian Information Solutions can be accessed by clicking here.

The plaintiff defaulted on her auto loan. The creditor charged off the unpaid balance of the loan and furnished that information to the credit reporting agencies, including the defendant. The information that was included on the plaintiff’s credit report was, “Recent Balance: $7,035,” “$10,068 written off[,]”and “$7,035 past due.”

The plaintiff contacted the defendant and disputed the debt. The defendant notified the creditor of the dispute, which investigated the discrepancy and determined that the information was being reported accurately. The plaintiff filed suit, alleging the defendants violated Section 1681a of the FCRA by failing to report the amount of a debt accurately. The defendant sought to dismiss the suit, claiming the plaintiff lacked standing to sue. The plaintiff claimed she had standing because the inaccuracy is posing a risk of causing harm to her credit score and the debt will continue to be reported inaccurately as payments are made on it.

But Judge James Bredar of the District Court for the District of Maryland, could not get past how decreasing the amount that the plaintiff owed — comparing the past due amount with the amount that had been charged off — injured the plaintiff, who claimed the discrepancy violated the Metro 2 guidelines.

“In enacting the FCRA, Congress did not intend to preclude all inaccuracies in credit reporting, but only those inaccuracies that are either ‘patently incorrect’ or ‘misleading in such a way and to such an extent that [they] can be expected’ to adversely affect credit decisions,” Judge Bredar wrote. “… the alleged disparities in Arriaza’s Experian report cannot be ‘expected to adversely affect credit decisions,’ as correcting them would further harm, not improve, her creditworthiness.”

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