The Court of Appeals for the Second Circuit has vacated a ruling and remanded a Fair Credit Reporting Act case back to the District Court, determining that there is no difference whether an alleged inaccuracy in a consumer’s credit report was “legal” and therefore not within the court’s jurisdiction — if an inaccuracy is objectively and readily verifiable, it is subject to the statute.
A copy of the ruling in the case of Sessa v. TransUnion can be accessed by clicking here.
The plaintiff leased a vehicle and information about the lease was included on the plaintiff’s credit report. The defendant reported that the plaintiff owed a “balloon payment” at the end of the lease term, which the lease did not require. What was being reported was the amount the plaintiff would have to pay if she wanted to purchase the vehicle at the end of the lease term. The plaintiff sued the defendant for violating Section 1681e(b) of the FCRA, which requires credit reporting agencies to follow reasonable procedures to assure maximum possible accuracy of the information in a consumer’s credit report. A District Court judge granted summary judgment for the defendant, ruling that the question of whether the plaintiff owed a balloon payment at the end of the lease amounted to a legal, rather than factual, dispute. The defendant could not be held liable when the accuracy at issue requires a legal determination as to the validity of the debt and credit reporting agencies can only be held liable for FCRA claims when the information reported does not match the information furnished, the District Court judge ruled.
“… the accuracy of the information reported, and whether that information is objectively and readily verifiable, are not the only inquiries under section 1681e(b),” the Appeals Court wrote. “Section 1681e(b) is violated only when a CRA has failed to ‘follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.’ “
Because the District Court judge never addressed that question, the Appeals Court remanded the case back to permit the judge to conduct the analysis in the first instance.
