Appeals Court Affirms Dismissal of FCRA Suit Over No-Longer-Disputed Debt

This is a case that should look familiar to anyone who has ever played a game of telephone and learned why firsthand if you need to pass on a message, it’s best delivered to the source, instead of an intermediary. The Ninth Circuit Court of Appeals has affirmed a lower court’s dismissal of a Fair Credit Reporting Act case in which a furnisher was accused of failing to investigate a dispute, when in fact it was being notified by two credit reporting agencies that the account was no longer being disputed.

A copy of the ruling in the case of White v. Equifax Information Services and TransUnion LLC can be accessed by clicking here.

The plaintiff accessed her credit report and saw that a tradeline was noted as being in dispute. So she sent a letter to the defendants asking that the dispute notification be removed because the account in question was no longer being disputed. Why she didn’t notify the furnisher directly isn’t clear. Nonetheless, the defendants forwarded the letter to the furnisher. The furnisher conducted an investigation and notified the defendant that, according to its records, the account was still being disputed, meaning the information being supplied to the defendants and the information in the plaintiff’s credit report was accurate.

After accessing her credit report and seeing the account was still noted as being disputed, the plaintiff filed suit, accusing the defendants of violating the FCRA because the furnisher failed to investigate the dispute and the defendants failed to remove the notation from the account.

A District Court judge granted the defendant’s motion to dismiss on the grounds that the plaintiff failed to state a claim.

The plaintiff attempted to argue that her statement in the letter to the defendants that she no longer disputed the account and wanted the inaccurate dispute notation removed was all she needed to say for the furnisher to conduct its investigation.

While the furnisher could have looked at the letter and chosen to contact the plaintiff to resolve the situation, the FCRA does not require the furnisher to do so, the Appeals Court noted. “What Ms. White wants Wells Fargo to do — either (1) to intuit that she no longer disputed the tradeline from her report to the CRAs or (2) to reach out to her directly to clarify and confirm that she no longer wished to dispute the tradeline — goes beyond what FCRA reasonableness requires,” the Appeals Court wrote in its ruling.

Secondly, the letter itself was contradictory and failed “to make anything clear” to the furnisher, including that the plaintiff wanted the dispute notification removed. The plaintiff “could have written a better letter: one that made clear that she was attempting to revoke her dispute for the first time or, better yet, one addressed to the bank itself. But that is not the letter on which she premised her lawsuit,” the Appeals Court wrote.

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