Tag: FCRA Claim

Eleventh Circuit Reaffirms That Legal Disputes Do Not Raise Private Right of Action Under FCRA February 13, 2023 Florida recently confirmed an Eleventh Circuit's precedent. Doing so established that plaintiffs cannot conduct a lawsuit against furnishers under the Fair Credit Reporting Act (FCRA) with only a legal dispute. Instead, plaintiffs must present a factual dispute. The plaintiffs entered a contract to purchase a timeshare from a vacation ownership company in this FCRA case. This contract involved a promissory note requiring a monthly installment plan secured by a deed of trust. Later, the plaintiffs asked for a remission of the agreement, a cancellation of the loan, and a tradeline deletion to avoid the loan showing on their consumer reports. However, the company did not agree to these requests and recorded the timeshare's special warranty deed. The plaintiffs later failed to make the loan payments. They also alleged that the company reported the delinquent payments to a consumer reporting agency (CRA). The plaintiffs attempted to dispute this information with the CRA, but the agency continued reporting the delinquency. As a result, the plaintiff sued the vacation ownership company for violations of the FCRA and the Florida Consumer Collection Practices Act (FCCPA). The court's summary judgment solely addressed the FCRA claim. Accordingly, it held that the plaintiff's dispute proved inherently legal. As such, it declared the argument not actionable under section 1681s-2(b). The court rejected the plaintiff's argument that their credit dispute involved a financial issue. Instead, they based this on an unpublished decision by the Eleventh Circuit. This decision claimed plaintiffs must dispute a financial inaccuracy, not a legal matter, to establish a lawsuit against furnishers. The plaintiffs also cited non-binding, out-of-circuit authority and amicus briefs submitted by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB) to the Second and Ninth Circuit Courts of Appeals. In response, the court clarified that it did not contradict the unpublished precedent about furnishers' duty to investigate under the FCRA did not apply to legal disputes. Furthermore, the court reminded the plaintiffs that they had stopped making payments on the loan, which the vacation ownership company verified. As such, the court determined that the dispute of the company's accuracy in reporting and reasonableness of the investigation were not in question, not factual issues. Instead, the court emphasized that the debate became whether the contract proved legal and enforceable. However, these issues are not actionable in a claim analysis under the FCRA. The court also elaborated on its view: had the plaintiffs revealed a corroboration of an underlying debt's legitimacy, it might have become a factual issue. For example, if they underwent bankruptcy, they could prove that it discharged the debt. As such, the courts could consider whether a furnisher's credit investigation proved reasonable. In that case, the plaintiffs would have a right to sue the furnisher. Unfortunately, this issue is considered legal in nature, thus lacking a basis for an FCRA claim. The court based this decision on the Eleventh Court's interpretation. In summary, regardless of validity or the legal precedent, when parties and courts cannot agree on how to characterize the debt, it will acquire the label "legal in nature." Keep your business up to date on new laws and regulations with Pre-employ’s free news resources. Contact a sales rep today. Source

Tag: FCRA Claim

Eleventh Circuit Reaffirms That Legal Disputes Do Not Raise Private Right of Action Under FCRA

Court Rules that FCRA Claim Filed Before Investigation Period Was Not Ripe

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