Judge Grants MSJ for Defendant in FCRA Case Over Timing of Dispute

A District Court judge in South Carolina has accepted a Magistrate Judge’s Report and Recommendation and granted a motion for summary judgment in favor of a defendant that was accused of violating the Fair Credit Reporting Act related to how the defendant was furnishing payment information to the credit reporting agencies, because the suit was filed days after the plaintiff submitted his dispute, thereby not giving the defendant enough time to investigate and respond.

A copy of the ruling in the case of Shulman v. Lendmark Financial can be accessed by clicking here.

The plaintiff took out a loan with the defendant, stopped making payments, entered into a modification through a debt settlement program, made payments entered into a deferral program, and then paid off the loan. During the process, the defendant reported to the credit reporting agencies that the plaintiff’s account was delinquent. During the process, the plaintiff filed disputes with the CRAs, claiming the balance was being mis-stated. The defendant investigated the dispute and confirmed the balance was accurate.

A year later, the plaintiff filed his suit, accusing the company of violating the FCRA. Several months later, he filed another dispute with the CRAs. Two weeks after filing the second dispute, he filed an amended complaint.

The plaintiff accused the defendant of violating Section 1681s-2(b) of the FCRA, but both the Magistrate Judge and the District Court judge agreed that the claim “was not ripe” because the 30-day investigation period had not expired when the amended complaint was filed. The plaintiff also claimed the balance was being mis-stated, but that is a legal dispute, not a factual inaccuracy, the judges ruled. The plaintiff also failed to demonstrate that he is entitled to actual damages, which is required for a negligent violation of the FCRA.

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