Judge Grants MSJ For Defendant in FCRA Case Over Disputed Debt Investigation

A District Court judge in Arizona has granted a defendant’s motion for summary judgment in a Fair Credit Reporting Act case, ruling that any ambiguity in how debts are reported by the credit reporting agencies is not necessarily the fault of the furnisher as long as the information being furnished is accurate, and that the information supplied by the plaintiff when the tradeline was disputed was not comprehensive enough to support a claim that the defendant did not conduct a reasonable investigation.

A copy of the ruling in the case of Sanchez v. JPMorgan Chase Bank can be accessed by clicking here.

The plaintiff fell behind on credit card payments and worked out a settlement with the defendant for less than the full balance that was owed. The defendant then started reporting that the account was closed with a $0.00 balance, that it was 120 days delinquent, and that it was settled for less than the full balance. The issue for the plaintiff was the “pay status” notification on her credit report, which indicated that the account was delinquent. The plaintiff disputed the information, but the defendant continued to report the debt as delinquent after conducting its investigation.

Ultimately, ruled Judge James A. Teiborg of the District Court for the District of Arizona, tradelines have to be viewed as a whole and not as individual and separate items. While it is true that the pay status line indicated the debt was delinquent, the tradeline also listed a $0.00 balance, that the account was closed in 2018 when the last payment was made, and that it was settled for less than the full amount owed. There was no information after the account was closed and the tradeline indicated the months that the plaintiff was delinquent. “No reasonable reader could look at all of these facts and still believe that her Pay Status represents a current debt,” Judge Teibirg wrote. “Thus, the information reported is not patently inaccurate or materially misleading.”

While it is possible that the information for that particular piece of information could be reported more clearly, that is not what the statute requires, Judge Teiborg wrote.

The plaintiff also needed to provide more information about the nature of her dispute, Judge Teiborg ruled. “One of the most important factors in assessing reasonableness is the quality and type of information that the furnisher received from the CRA when it was notified of the dispute,” he wrote. “Chase only received two pieces of information relating to the dispute: 1. that it was incorrect to report a ‘Payment Status’ of ‘Late 120 Days[,]’ and 2. that the ‘Date of Last Payment’ in the Account Details section was not similar to the ‘information provided in the Payment History[,]’. The second piece of information has nothing to do with the reporting of her delinquency. Given the first piece of information, Chase could only have concluded that either something was factually inaccurate with the reporting that Plaintiff was at one time 120 days late or that the information was being reported improperly. Chase looked to its internal notes and verified the account status, the payment rating, and the account history. It also verified the accuracy of the date opened, the date of last payment, and the date the account was closed. Further, it validated a number of other pieces of information. It thus made sure that the information it was furnishing was technically accurate.”

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