Evantash v. G.E. Capital Mortg. Services, Inc.,
Not Reported in F.Supp.2d, 2003 WL 22844198, E.D.Pa., Nov 25, 2003
Debtor, a co-obligor on a mortgage loan, sued the mortgagor and a credit reporting agency, asserting violations of the Fair Credit Reporting Act (FCRA). On defense motions for summary judgment, the District Court, Davis, J., held that: (1) genuine issues of material fact existed as to whether a bankruptcy reference in the debtor's credit report misled potential creditors into believing that she had filed for bankruptcy; (2) genuine issues of material fact existed as to whether the agency adequately reinvestigated the disputed bankruptcy reference; (3) genuine issues of material fact existed as to whether the mortgagor negligently failed to conduct an investigation; (4) debtor's claim fell within the Fair Credit Reporting Act (FCRA) section addressing duties of furnishers of information upon notice of dispute; and (5) genuine issues of material fact existed as to whether the credit reporting agency acted with conscious or reckless disregard to the debtor's rights.
Under Section 1681i(a) of the Act, if a consumer notifies a consumer reporting agency of a dispute regarding the completeness or accuracy of information contained in the consumer's credit report, the agency is required to reinvestigate the disputed information. 15 U.S.C. § 1681i(a). The agency must do more than "merely parrot[ ] information received from other sources; [ ] a 'reinvestigation' that merely shifts the burden back to the consumer and the credit grantor cannot fulfill the obligations contemplated by the statute." Cushman v. Trans Union Corp., 114 F.3d 220, 225 (3d Cir.1997). In order to fulfill its obligation under Section 1681i(a), "a credit reporting agency may be required in certain circumstances, to verify the accuracy of its initial source of information." Id. The scope of an agency's duty to go beyond the original source depends on a number of factors, including:
(1) whether the consumer has alerted the reporting agency to the possibility that the source may be unreliable or the reporting agency knows or should know that the source is unreliable; and (2) the cost of verifying the accuracy of the source versus the possible harm inaccurately reported information may cause the consumer.
Sheffer, 2003 WL 21710573, at *2 (citing Cushman, 114 F.3d at 225). "Whatever considerations exist, it is for 'the trier of fact [to] weigh the[se] factors in deciding whether [an agency] violated the provisions of section 1681i." Id. at 225-26 (quoting Henson v. CSC Credit Services, 29 F.3d 280, 287 (7th Cir.1994)); see also Cousin, 246 F.3d at 368 (noting that the question of weather a consumer reporting agency followed reasonable procedures is typically a question of fact reserved for the jury); Cahlin v. Gen. Motors Acceptance Corp., 936 F.2d 1151, 1156 (11th Cir.1991) (same).
In Stevenson v. TRW Inc., 987 F.2d 288 (5th Cir.1993), the Fifth Circuit held that the defendant credit reporting agency's contacting subscribers only through Consumer Dispute Verification Forms despite the complexity of Plaintiff's dispute violated Section 1681i. Id. at 293; see also Cushman, 115 F.3d at 225 (agreeing with the conclusions reached in Stevenson ). The court also noted that "[a]llowing inaccurate information back onto a credit report after deleting it because it is inaccurate is negligent." Stevenson, 987 F.2d at 293. Here, Trans Union contacted G.E. Capital only through ACDVs, despite Plaintiff's disputing the "INCLUDED IN BANKRUPTCY" notation at least five times. Moreover, Trans Union may have reinserted inaccurate information on Plaintiff's credit report. [FN8] Therefore, a reasonable jury could find that Trans Union violated Section 1681i.
FN8. Trans Union argues that although it reinserted the "INCLUDED IN BANKRUPTCY" remark after receiving reporting tapes from G.E. Capital which described the Account's status as "BNKRPTCY 7/11," it was not negligent because Section 1681i only punishes the " 'allowing [of] in accurate information back onto a credit report...." Trans Union's Mem. 18 (emphasis in original). As previously discussed, however, there is a factual question as to whether the bankruptcy reference in Plaintiff's credit report was so misleading as to be inaccurate within the meaning of Section 1681e(b).
Information that should and should not be reported where there is a bankruptcy.
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