What determines whether an investigation into a disputed debt is reasonable or not? A District Court judge in Indiana has granted a defendant’s motion for summary judgment in a Fair Credit Reporting Act and Fair Debt Collection Practices Act case, saying that its policies and procedures were “beyond question” in making sure a debt was valid when it reported it to a credit bureau.
A copy of the ruling in the case of Woods v. LVNV Funding and Resurgent Capital Services can be accessed by clicking here.
There is a lot of backstory to this case that you can get by looking at the ruling, but the long-and-short of it is that a credit card was opened and used to purchase a one-way airline ticket. A payment on the debt was never made and it was purchased by the defendant and placed for collection with Resurgent. Resurgent sent the plaintiff a letter that included the FDCPA’s validation notice.
The plaintiff contacted Resurgent and disputed the debt. That set off a back-and-forth between the parties with respect to whether the plaintiff incurred the debt. He claimed to be the victim of identity theft but never provided enough documentation to convince the defendant that transaction was fraudulent. On a handful of different occasions, the defendant investigated and reinvestigated the disputes, each time ruling they were valid and each time asking the plaintiff to submit additional documentation to prove his claim. Months later, the plaintiff received notification from the airline that he was not responsible for the account, at which point the defendant requested that the tradelines be deleted from the plaintiff’s credit report.
The plaintiff claims that the defendants did not do enough to investigate his disputes, such as contacting the creditor, contacting the police department where a report was filed, and never figured out that the account statements were being sent to an address where the plaintiff hadn’t lived in six years.
The defendant, meanwhile, argued that it did everything it could to help the plaintiff and to investigate whether the debt was valid or not. Chief Judge Tanya Walton Pratt of the District Court for the Southern District of Indiana, sided with the defendant. “By verifying Woods’ account details and inviting him to provide additional information to investigate the claim Resurgent satisfied its obligation to conduct a reasonable investigation under the FCRA,” Judge Walton Pratt wrote. “Because Woods has alleged nothing to suggest that the multiple investigations (conducted both before and after Woods challenged his responsibility for the Account to the CRAs) were unreasonable, and, if anything, has provided evidence to the contrary, his FCRA claims against Resurgent fail as a matter of law.”
The plaintiff also accused the defendants of violating Sections 1692d, 1692e(10), 1692g(a)(3), and 1692f of the FDCPA, but there was nothing in the account to prove that the transaction — and subsequent debt — related to a consumer purchase. Even if the debt was for a consumer purchase, Judge Walton Pratt noted, the claims still would have failed and she goes into great detail to explain why in her ruling.