Appeals Court Affirms Ruling for Defendant in FCRA Case Over Disputed Debt

The Court of Appeals for the Fourth Circuit has affirmed a lower court’s ruling in favor of a defendant that was accused of violating the Fair Credit Reporting Act for how the pay status notifications were being displayed for a number of plaintiffs, determining that while the reports could have been clearer, that does not mean they were not clear enough.

A copy of the ruling in the case of Bibbs v. TransUnion can be accessed by clicking here.

The Appeals Court consolidated three similar cases into this ruling, after TransUnion was sued for allegedly violating the FCRA. Each of the plaintiffs defaulted on their student loan payment and each contained a “Pay Status” notation stating “>Account 120 Days Past Due<” and that the loans were closed, transferred, and had a balance of $0. The plaintiffs filed disputes with the defendant, arguing that if no money was owed and no payments were needed, then the accounts could not be considered to be late. The defendant responded to each dispute, explaining the notation. The plaintiffs filed suit, accusing the defendant of issuing credit reports that contained misleading or inaccurate information, and for refusing to revise the reports after the plaintiffs had filed their disputes. A District Court judge granted a motion for judgment on the pleadings filed by the defendant.

The plaintiffs appealed, arguing that the District Court misapplied the “reasonable creditor” standard (similar to the Fair Debt Collection Practices Act’s least sophisticated consumer), and that the credit reports did not meet the FCRA’s “maximum possible accuracy” requirement.

Regarding the accuracy of the information, the Appeals Court noted that the reports could have been clearer, but did include enough “conspicuous statements” to reflect the status of the account. “The possibility of further clarity is not an indication of vagueness; just because a report could potentially be a bit clearer does not mean that it is not very clear at present,” the panel wrote in its ruling.

The plaintiffs also claimed the defendant failed to conduct a reasonable investigation of their dispute, but having already ruled the “Pay Status” entry was neither misleading nor inaccurate, there was no need to continue with the investigation.

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