a consumer may sue a furnisher under the FCRA, the consumer must first
dispute allegedly incorrect information with the consumer reporting agency
that disseminated that information. Of note, the activity at issue
occurred before July 1, 2010, and the Court did not have reason to address
the FACTA amendments on the subject.
A copy of the opinion is available at:
Plaintiff borrower noticed that defendant Countrywide Home Loans
("Servicer") had furnished negative credit information to credit reporting
agencies in 2007 and 2008. In response, she caused the law firm in which
she was a partner, and which also occasionally functioned in a manner that
met the definition of a consumer reporting agency, to inform the Servicer
that it had furnished allegedly false information. The Servicer did not
alter the information provided.
Plaintiff brought suit, seeking recovery for various tort claims and
violations of the FCRA. The District Court ruled that a private litigant
seeking to recover against a furnisher of information under the FCRA must
first complain to a consumer reporting agency before the furnisher can
face liability, and granted summary judgment in favor of the Servicer.
Affirming the lower court's ruling in favor of the Servicer, the Third
Circuit first noted that several portions of the FCRA "cannot be used by a
private individual to assert a claim… as such claims are available only to
the Government" and thus, "[t]his leaves 15 U.S.C. § 1681s-2(b) as the
only section that can be enforced by a private citizen seeking to recover
damages caused by a furnisher of information."
Further, even "this cause of action is not without limitations," as a
furnisher of information may suffer liability only "[a]fter receiving
notice… of a dispute… provided by a person to a consumer reporting
agency." The Court also specifically ruled that "[n]otice… must be given
by a consumer reporting agency, and cannot come directly from the
Plaintiff argued that appropriate notice could be provided by any consumer
reporting agency, including, in her case, the law firm in which she was a
partner, rather than the specific agency to which the furnisher provided
However, the Court rejected that contention, for two reasons.
First, looking to the text of the statute, the Third Circuit concluded
that "[t]he notice required in order to trigger the furnisher's duties…
does not come from 'any' consumer reporting agency or 'an' agency, but,
rather, must come from 'the' agency." Thus, the Court ruled, the statute
can only have been referring to the "consumer reporting agency [that]
receive[d] notice of a dispute from any consumer."
Second, the Third Circuit observed that the FCRA "sets forth a framework
under which the consumer reporting agency is the central focus of any
private litigation" such that a furnisher faces liability under FCRA only
after it has received notification that a dispute exists from the consumer
reporting agency. Allowing a consumer to "bypass this structural
framework by hiring a law firm [to provide notice] would interfere with
this congressionally chosen path for creating liability," would cause
furnishers to have to respond directly to consumers rather than to
reporting agencies, and would perversely make the consumer's ability to
bring suit dependent on whether the law firm was itself a consumer
Because Plaintiff did not provide notice of the dispute to the consumer
reporting agency that reported the allegedly objectionable information,
that agency could not have given notice of the dispute to the Servicer.
Accordingly, the Court held that the defendant Servicer was not obligated
under the FCRA to undertake any investigation, and affirmed the District
Court's ruling of summary judgment in favor of the Servicer.
Ralph T. Wutscher
McGinnis Tessitore Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct: (312) 551-9320
Fax: (312) 284-4751
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