Summary:

Eric Keller initiated a lawsuit against Experian Information Solutions, Inc. ("Experian"), alleging willful and negligent violations of the Fair Credit Reporting Act (FCRA). The dispute arose after Keller financed a vehicle and later refinanced it through Truist Bank, which first sent duplicate payments to the original lienholder,  and,  after receiving a refund for one of those payments,   mistakenly credited his account and released the lien and refused to accept further payments.  Truist Bank  reported the loan as paid off, but then reported him as delinquent when the error was discovered. Mr.  Keller's attempts to correct his credit report,  including by sending dispute letters through his attorney,  were unsuccessful, leading to his filing a dispute with Experian.

When that dispute also proved  unavailing,  Mr.  Keller  brought suit against Experian  alleging that it failed to conduct a reinvestigation ( or that any reinvestigation was unreasonable) and that it reported information it could not verify under the FCRA.  The district court  found that under its Suspicious Mail Policy (SMP),  Experian  may terminate a reinvestigation if a dispute letter appears to come from a third party.   In assessing the sufficiency of the complaint,  the district court held,  however,  that  Mr.  Keller's factual allegations, including sending a dispute letter authorized by him but through his attorney, support a reasonable inference that Experian's policy could lead to failure to comply with the FCRA.  

As to the allegations that it had conducted an unreasonable Reinvestigation and reported unverifiable information,  the district court dismissed those causes of action,  holding  that FCRA only required Experian to conduct reasonable investigations regarding factual disputes.  Because  the Fourth Circuit "has  articulated its 'concern' about collateral attacks" against the underlying debt, see Saunders v. Branch Banking & Tr. Co. off Va., 526 F.3d 142 (4th Cir. 2008), the district court dismissed these causes of action as a legal and not factual dispute.  See also,  Perry. v. Toyota Motor Credit Corp.,  where the district court in the Western District of Virginia  held that inaccurate credit reporting of a debt discharged in bankruptcy  failed to state a claim under FCRA.  

Still pending is Experian's motion for judgment on the pleadings,  as it argues that with the dismissal of the latter two causes of action,  the first cannot survive.

Commentary:

It also seems surprising in this case that Mr. Keller had completely separate and apparently unrelated attorneys than in his parallel case filed against Truist Bank and Equifax,  even though both were filed the same day.  Following a successful mediation,  however,  Truist,  Equifax and Mr.  Keller appears to have resolved their disputes,  with the case being dismissed after payment by Truist and/or Equifax of an undisclosed amount.  

What is not surprising is that Experian seems to be primarily interested in either minimizing its own obligations (including and probably especially ignoring disputes filed through the assistance of an attorney) regarding reinvestigations or not questioning creditors,  rather than providing truly accurate credit reports,  let alone providing any protection to  consumers.  Perhaps this is why the federal government has found that one in five people have an error on at least one of their credit reports.  This may also be why it makes sense to bring FCRA suits first against the creditor for providing inaccurate  information and then only then (and with caution) against the CRA.

It should be  noted that  Perry v.  Toyota Motor Credit Corp.  involved the rather complicated and arcane  bankruptcy question of whether the assumption of a lease   in a bankruptcy case also  reestablished personal liability for that debt without a separate reaffirmation agreement.  (There Perry would have likely benefited from first seeking a clarifying order of judgment from the bankruptcy court and then including such in the FCRA dispute.)  The question here of whether Truist  accurately reported  a delinquency, after its own mistakes led it to refuse to accept payments,  certainly appears less complicated and completely factual.   

Also not surprising is that , while courts and Congress overwhelmingly prefer that most disputes  be handled through the less judicial avenue of arbitration rather than lawsuits,  the non-judicial mechanism for resolving credit report  errors under the FCRA is so disfavored that only the most patently factual disputes are covered,  leaving consumers with the slower and more expensive course of first seeking judicial findings of fact such that Experian and other recalcitrant credit reporting agencies must even perform the slightest of reinvestigations.

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