Judge Partially Denies Defendant’s Motion for Judgment in FCRA, FDCPA Case Over Removal of Dispute Notification

Navigating the rough waters of credit reporting is tough sailing oftentimes. Even when a company tries to do the right thing, problems can arise. One defendant is learning that after a District Court judge in Missouri partially granted and partially denied its motion for judgment on the pleadings in a Fair Credit Reporting Act and Fair Debt Collection Practices Act case because it allegedly did not update the information it was furnishing to the credit bureaus when the plaintiff notified the bureau that she was no longer disputing the debt in question.

A copy of the ruling in the case of Green v. Americollect can be accessed by clicking here.

The plaintiff disputed a debt being reported by the defendant and the defendant noted the dispute in the information it furnished to the credit reporting agencies. The plaintiff then notified a credit reporting agency that she was no longer disputing the debt and the agency forwarded the information to the defendant. A month later, the plaintiff checked her credit report and saw that the account in question was still being reported as disputed. The plaintiff filed suit, alleging the defendant violated Section 1681s-2(b) of the FCRA for failing to conduct a proper investigation after being notified that the plaintiff was no longer disputing the debt and Section 1692(e) of the FDCPA for reporting information it knew to be false.

The defendant argued that it can not be held liable under the FCRA because there was no new information to investigate when it received the letter that was sent by the plaintiff to the credit bureau. But Judge Stephen Clark of the District Court for the Eastern District of Missouri ruled that it was too early for him to decide “whether it would have been reasonable for Americollect to rely solely on its own files when performing its investigation after receiving Green’s letter stating that she no longer disputed her tradeline” and denied the motion related to the plaintiff’s FCRA claims.

With respect to the FDCPA claim, a defendant’s responsibility to report that a consumer is no longer disputing a debt is just as material as it is to report that the consumer disputed the debt in the first place, Judge Clark ruled. But Judge Clark also found that the plaintiff failed to state a claim pursuant to the alleged FDCPA violation because she did not allege any facts demonstrating that the defendant continued to report false information after it received the notice from the credit reporting agency and granted her leave to file an amended complaint.

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