FCRA Suit Alleges Impermissible Purpose, Failure to Investigate Disputed Debt

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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.

A defendant has removed a Fair Credit Reporting Act lawsuit to federal court in South Carolina, after it was sued for allegedly obtaining a plaintiff’s credit file without a permissible purpose and allegedly failing to conduct a reasonable investigation after a dispute was filed.

A copy of the complaint, now in the District Court for the District of South Carolina, can be accessed via case number 22-cv-03684 or by clicking here.

The plaintiffs visited a auto dealer and sought to purchase a vehicle. The plaintiffs submitted an application and were told they had been approved for financing by the defendant. But, according to the complaint, the defendant either did not approve the financing application or told the dealer it had not been approved. The plaintiffs ultimately financed the vehicle through another lender. Shortly after purchasing the vehicle and making payments, the defendant began to contact the plaintiffs and inquire about payments that were now late. The plaintiffs informed the defendant that they had secured funding from another lender and did not borrow any money from the defendant. The defendant allegedly “ignored” the claims being made by the plaintiffs and continued to make “automated” collection calls on a daily basis, and began reporting the debt as delinquent and then in default to the credit reporting agencies, according to the complaint.

Months later, the defendant is still allegedly reporting information about the debt to the credit reporting agencies.

The complaint accuses the defendant of obtaining the plaintiffs’ credit files without having a permissible purpose to do so and for failing to reinvestigate disputes filed by the plaintiffs with the credit reporting agencies. The complaint also accuses the defendant of violating state law in South Carolina regarding unfair or deceptive acts and practices.

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