The U.S. Court of Appeals for the First Circuit recently held affirmed a district court's order granting summary judgment in favor of a credit card lender on a consumer's claims that the company failed to investigate a disputed credit card charge, in supposed violation of section 1681s-2(b)(1) of the Fair Credit Reporting Act ("FCRA").
A copy of the opinion is available at:
http://www.ca1.uscourts.gov/cgi-bin/getopn.pl?OPINION=09-2323P.01A
Plaintiff brought this lawsuit against a credit card company after the company made allegedly incorrect reports of delinquent payments that were disputed by plaintiff. Plaintiff claimed that the credit card lender violated section 1681s-2(b)(1) of the FCRA by failing to investigate the dispute. The district court granted summary judgment of the credit card lender and this appeal followed.
As you may recall, section 1681s-2 of the Fair Credit Reporting Act ("FCRA") imposes certain obligations on entities that furnish credit information to consumer credit reporting agencies ("CRAs"). Among other things, these duties include investigating disputes over the completeness or accuracy of the information furnished and then notifying the CRA of any corrections.
However, a furnisher's investigation and notification duties under § 1681s-2(b) are triggered if the CRA notifies the furnisher of a consumer's dispute, but, on the other hand, "[a] notice of disputed information provided directly by the consumer to a furnisher does not trigger a furnisher's duties under § 1681s-2(b)." In affirming the district court's decision, the First Circuit's opinion centered on this distinction, and the plaintiff did not raise a claim under section 312 of FACTA.
Ultimately, the Court based its decision on the fact that there was no evidence that a CRA, rather than just plaintiff himself, had ever contacted the credit card company concerning plaintiff's objections, noting that this is "exactly the same fatal hole in [plaintiff's] case as the district court found." In so doing, the Court rejected plaintiff's attempts to discredit the testimony of all three major CRAs and his attempts to introduce letters which he claimed supported his conclusion that a CRA had contacted the credit card company. Rather, the Court held that, based on the evidence, "the only reasonable inference is that no notice was ever sent" by a CRA and that the letters introduced by plaintiff "actually cut against the proposition that [plaintiff] believes them to support."
Ralph T. Wutscher
Kahrl Wutscher LLP
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