Must Prove that the CRA Sent Notice of Dispute to Furnisher!

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Must Prove that the CRA Sent Notice of Dispute to Furnisher!

Postby Administrator » Tue Sep 30, 2014 12:34 am

Must Prove that the CRA Sent Notice of Dispute to Furnisher!
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Redmond v. Brotherhood Bank and Trust Co.
Not Reported in F.Supp.2d, 2004 WL 956023
D.Kan.,2004.

Federal Fair Credit Reporting Act Claims
In Counts I and II of his complaint, Redmond alleges that BBT both willfully and negligently violated the FCRA. BBT has moved to dismiss both Counts I and II of Redmond's complaint, arguing that 1) Redmond does not have standing to bring a claim under the FCRA, 2) even if Redmond has standing to bring such a claim, he has not demonstrated that a CRA gave BBT notice that Redmond disputed an entry on his credit report as is required to maintain a private claim under the FCRA, and 3) Redmond's claims are barred by the two-year statute of limitations under the FCRA.

The FCRA was enacted to "require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit ... in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information." 15 U.S.C. § 1681(b). The FCRA places distinct obligations on three different groups: 1) consumer reporting agencies, 2) users of consumer reports; and 3) furnishers of information to consumer reporting agencies. Aklagi v. Nationscredit Fin., 196 F.Supp.2d 1186, 1192 (D.Kan.2002). In this case, it is undisputed that BBT is a furnisher of credit information. As such, BBT's obligations arise under 15 U.S.C. § 1681s-2.

Section 1681s-2 has four subsections that can be broken into two components--one component comprised of subsections (a), (c) and (d), and one component comprised of only subsection (b). Subsection (a) of § 1681s-2 generally imposes a duty on furnishers of credit information to provide CRAs with accurate information. Subsections (c) and (d) limit the remedies for violation of subsection (a). Subsection (c) eliminates remedies to consumers for violations of subsection (a), and subsection (d) provides that the duties imposed under subsection (a) can be enforced only by government agencies and officials. Therefore, because of subsections (c) and (d), Redmond has no private cause of action for BBT's alleged violations of subsection (a). See Aklagi, 196 F.Supp.2d at 1192.

However, subsection (b) of § 1681s-2 creates a private cause of action by a consumer against a furnisher of credit information. Id. at 1193. Subsection (b) requires a furnisher of credit information to conduct an investigation "[a]fter receiving notice pursuant to section 1681i(a)(2) of this title of a dispute" regarding the accuracy of information provided to a CRA. 15 U.S.C. § 1681s-2(b)(1). Section 1681i(a)(2) requires a CRA to provide a furnisher of credit information with prompt notice of a dispute from any consumer.

Therefore, the duty of a furnisher of credit information to investigate a credit dispute is triggered only after the furnisher is notified about the dispute by the CRA. Notification of the dispute by the consumer alone does not trigger the duty to investigate. 15 U.S.C. § 1681s-2(b); see e.g., Aklagi, 196 F.Supp.2d at 1193 (holding defendant furnisher of credit information entitled to summary judgment on plaintiff's FCRA claim where plaintiff failed to produce admissible evidence to demonstrate that CRA notified furnisher of credit information that plaintiff was disputing the report); Hasvold v. First USA Bank, N.A., 194 F.Supp.2d 1228, 1236 (D.Wyo.2002) (similar holding); Jaramillo v. Experian Info. Solutions, Inc., 155 F.Supp.2d 356, 363 (E.D.Pa.2001) (similar holding); Yelder v. Credit Bureau of Montgomery, L.L.C, 131 F.Supp.2d 1275, 1289 (M.D.Ala.2001) (similar holding).

In its motion for summary judgment, BBT asserted that it received no notice from a CRA of a problem with Redmond's credit report or a dispute of the information BBT furnished to CRAs that would have triggered BBT's duty to investigate the disputed information. Redmond purports to deny BBT's assertions that it was never notified by a CRA that Redmond was disputing his credit report, but provides no evidence or testimony in support. Redmond's unsupported denials are insufficient to controvert BBT's assertions. See D. Kan. Rule 56.1(b).

In this case, while Redmond has produced evidence that he directly notified CRAs that he disputed the information on his credit report from BBT, Redmond has produced no evidence that any CRA subsequently notified BBT regarding the dispute. Redmond also has failed to establish that BBT received notice from a CRA of a problem with Redmond's credit report or that a CRA requested that BBT investigate Redmond's dispute of the information BBT furnished to the CRAs--a crucial element of his FCRA claims. The court therefore concludes that Redmond has failed to raise an issue of material fact regarding whether BBT received notice of a dispute from any CRA as is required for Redmond to maintain a private claim under the FCRA. BBT is thus entitled to summary judgment on Redmond's FCRA claims. [FN4] Counts I and II of Redmond's amended complaint are therefore dismissed.

FN4. Because the court finds that BBT is entitled to summary judgment on Redmond's FCRA claims on this ground, the court declines to analyze BBT's statute of limitations argument.
David A. Szwak
Bodenheimer, Jones & Szwak, LLC
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