In a case that demonstrates the importance of having solid policies and procedures, a District Court judge in New York has granted a defendant’s motion for summary judgment after it was accused of violating the Fair Credit Reporting Act and the Fair Debt Collection Practices Act by allegedly furnishing inaccurate information to the credit reporting agencies and then failing to conduct a reasonable investigation, and using false or deceptive means in connection with the collection of the debt.
A copy of the ruling in the case of Hart v. Simon’s Agency can be accessed by clicking here.
Background: The plaintiff noticed that the defendant had allegedly communicated incorrect information about a debt to the credit reporting agencies. The plaintiff began disputing the debt via e-OSCAR and the defendant confirmed that the tradeline was accurate and that the account had been paid in full. What followed was a series of disputes and letters from the plaintiff, sent to the different credit reporting agencies, the original creditor, and the defendant, complaining that the information being communicated was inaccurate. Each time, the response back to the plaintiff was that the information being reported was accurate and that the account had been paid in full. Then, the plaintiff was denied for a credit card on the basis of negative information that was on his credit report.
FCRA Claim: The plaintiff claimed the defendant violated Section 1681s-2(b) of the FCRA by failing to conduct a reasonable investigation, failing to review information provided by the credit reporting agencies, and failing to modify or delete information it could not verify as accurate. Ultimately, the defendant’s investigations were “reasonable under the circumstances,” ruled Judge Norman A. Mordue of the District Court for the Northern District of New York, with the “circumstances” being “various misleading descriptions that indicated” the debt was not the plaintiff’s or that he was not liable for it.
“At most, Plaintiff has shown some minor confusion and delay in Defendant’s investigation and response, which was due to the multitude of different disputes he submitted,” Judge Mordue wrote. “Simply put, no jury could find that Defendant acted unreasonably under the circumstances.”
FDCPA Claim: Judge Mordue made even shorter work of the plaintiff’s FDCPA claim, because, if any inaccurate information was sent to the credit reporting agencies by the defendant, it was not a communication in connection with the collection of a debt, the judge noted.