Third Circuit Upholds Ruling for Defense in FCRA Reasonable Investigation Case

The Court of Appeals for the Third Circuit has upheld a summary judgment ruling in favor of defendants that were sued for violating the Fair Credit Reporting Act because they allegedly reported false and inaccurate information and did not conduct a reasonable investigation of the plaintiff’s dispute.

A copy of the ruling in the case of Scarbo v. Wisdom Financial, TransUnion, Experian, Equifax, LVNV Funding, Major Financial Corp., Capital Bank, and the US Department of Education can be accessed by clicking here.

The plaintiff obtained a credit card, exceeded her credit limit, stopped making payments, and had the debt acquired by one of the defendants. The defendant reported the unpaid debt to the credit reporting agencies. The plaintiff submitted disputes to two of the CRAs, saying the account number on the debt was incomplete and unidentifiable, and there was no account status, among a list of other alleged inaccuracies. The defendant was notified of the disputes, and conducted an investigation, which revealed that the account status, payment history, current balance, amount past due, and account number were accurate, but the spelling of the plaintiff’s name and street address were wrong, and corrected them. It was only after filing her suit accusing the defendants of violating the FCRA that the plaintiff asserted that the defendant should have been aware of the existence of a credit protection program and was therefore liable for the original creditor’s failure to apply those benefits to her account.

Ultimately, the plaintiff “failed to introduce any direct or circumstantial evidence” that the defendants did not conduct reasonable investigations upon receiving the disputes, the Third Circuit determined. The disputes filed by the plaintiff “were vague at best and failed to specifically identify the alleged errors or otherwise explain or support why information was believed to be inaccurate or incomplete,” the Court wrote. “The discrepancies noted by Scarbo regarding account opening dates and updates to addresses are not material to and have no other bearing on the reasonableness of the investigations.”

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