We will continue to monitor these issues in the days and weeks ahead.Notes[1] See 15 U.S.C. § 1681s-2.[2] CORONAVIRUS AID, RELIEF, AND ECONOMIC SECURITY ACT, Pub. L. No. 116-136, 134 Stat. 281 (2020).

Fair Credit Reporting Act (“FCRA”) plaintiffs learned a hard lesson in procedure recently when the Second Circuit Court of Appeals affirmed the dismissal of their claim because they (presumably) failed to follow the notification process required by 15 U.S.C. § 1681s-2(b), which foreclosed their private right of action.The case is Sprague v. Salisbury Bank & Trust Co., No. 19-3241, 2020 WL 4577169, (2d Cir. Aug. 10, 2020).

Following the investigation, Plaintiff paid the account balance but alleged that Defendant refused to provide any details on its determination that Plaintiff was responsible for the account.Plaintiff brought claims under 15 U.S.C. §§ 1681s-2(a) and (b) against Defendant, but did not seek monetary relief, only an injunction requiring “Defendant to notify and delete errant information on the reports maintained by all major credit bureaus.” 2021 WL 4243406, *2 (cleaned up).

Among other things, subsection (a) prohibits furnishers from reporting information with knowledge of errors, requires furnishers to provide notice of delinquent or closed accounts, and obligates furnishers to have procedures in place to respond to notices of identity theft. 15 U.S.C. § 1681s-2(a)(1), (4)-(6).Conversely, subsection (b) of 1681s-2 addresses a second category of obligations on furnishers that are triggered “upon notice of a dispute” from a CRA.

Recent cases have decided claims against furnishers under 15 U.S.C. § 1681s-2 in a variety of factual circumstances. In Edwards v. Med-Trans Corporation, Case No. 2:20-CV-00114-CLM, 2021 WL 1087228 (N.D. Ala. Mar. 22, 2021), the Northern District of Alabama considered a claim that an air ambulance company (“Med-Trans”) violated § 1681s-2 by continuing to report a debt as delinquent even after the consumer disputed the validity of the underlying contract.

Appellants subsequently learned that Salisbury did not correct the erroneous information until several months later.Appellants filed a complaint alleging Salisbury violated FCRA by “negligently and willfully fail[ing] to perform a reasonable reinvestigation and correction of inaccurate information,” and by “engag[ing] in behavior prohibited by FCRA by failing to correct errors in the information that it provided to credit reporting agencies…after [Appellants] notified [Salisbury Bank] of the error.”The district court dismissed the complaint reasoning Appellants failed to state a claim under 15 U.S.C. § 1681s-2(b) because they (1) did not plead that they notified a CRA of the disputed accuracy of Salisbury’s reports and (2) did not allege that a CRA notified Salisbury of the dispute. Further, the court reasoned Appellants failed to state a claim under 15 U.S.C. § 1681s-2(a) because there is no private right of action under this subsection.

Yesterday, the U.S. Supreme Court agreed to decide a case that raises the issue of whether the United States government may be held liable as a data furnisher under the Fair Credit Reporting Act (FCRA) despite its invocation of the defense of sovereign immunity. The Supreme Court will hear Department of Agriculture Rural Development Rural Housing Service v. Reginald Kirtzas part of its October term of 2023.The applicability of the FCRA’s data furnisher liability provisions (15 U.S.C. § 1681s-2(b), §1681n, §1681o) to consumer finance companies that report consumer trade lines to consumer reporting agencies is uncontroversial in most instances, although numerous exceptions and defenses apply to such claims. In short, after receiving a trade line dispute from a consumer reporting agency, a data furnisher (called a “person” in the FCRA’s text) is required to investigate that dispute, and to then modify, delete, or suppress the reporting of any information it determined to be inaccurate after the investigation is complete. In general, the most common FCRA litigation claims against data furnishers center upon the reasonableness and the thoroughness of the data furnisher’s investigation of a trade line’s accuracy upon receiving a dispute from a consumer reporting agency. Litigants often seek actual damages and attorneys’ fees for “negligent” noncompliance with the provisions of 15 U.S.C. § 1681s-2(b), and additional punitive damages for “willful” noncompliance of this statute.As evid

When a furnisher receives notice of a credit dispute from a CRA, a furnisher has a duty to investigate and respond to the dispute. 15 U.S.C. 1681s-2(b).The Third Circuit found that the Schiano’s claims brought against the creditor as a furnisher under Section 1681s-2(b) of the FCRA for a failure to “fully and properly investigate” their dispute were mere conclusory statements.

A federal district court judge in Nevada recently denied competing motions for summary judgment in a Fair Credit Reporting Act (FCRA) furnisher investigation case, demonstrating the challenges FCRA litigants often face in convincing courts to decide cases on matters of law.In Land v. Allied Collection Services, Inc. (Allied), the defendant argued that since it had conducted an investigation before receiving the plaintiff’s formal dispute it did not need to conduct a duplicative investigation after receiving the dispute. Allied also argued that the one satisfaction rule barred the plaintiff’s recovery because he had already settled with other defendants. The court declined to decide either legal issue at the summary judgment stage.As background, the plaintiff alleged that Allied violated 15 U.S.C. § 1681s-2(b) by conducting an inadequate investigation. According to the plaintiff, although he disputed that he owed rent to an apartment complex, Allied continued to report the debt to consumer reporting agencies (CRAs) without reinvestigating. Allied responded that it directly contacted the apartment complex manager before receiving the plaintiff’s formal dispute and the complex manager verified the debt. Allied argued there was no indication in the dispute that anything had changed.The plaintiff moved for summary judgment on the issue of liability, arguing that Allied admitted that it did not reinvestigate the accuracy of the report after it received his dispute. Allied did not dispute that material fact, and the plaintiff did not dispute that Allied had called the complex manager. The only question remaining was whether § 1681s-2(b) was satisfied by an investigation conducted prior to the receipt of a formal dispute.The court decided that the accuracy of the underlying report was still unreso

Plaintiff filed suit against Monterey for failure to conduct a reasonable investigation under FCRA, which required that after receiving notice of Plaintiff's dispute, Monterey was to: “(A) conduct an investigation with respect to the disputed information; (B) review all relevant information provided by the consumer reporting agency [; and] (C) report the results of the investigation to the consumer reporting agency[.]” 15 U.S.C. § 1681s-2(b)(1). Plaintiff must also show that Monterey’s violation of this rule was negligent or willful.