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Report Must Contain an Inaccuracy to be Actionable Against Credit Bureaus


D. Maryland; 4/27/2017; Case No. TDC-14-1180 Ms. Alston filed a case against two credit bureaus for violations of 15 U.S.C. § 1681e and 1681i, failure to maintain procedures to assure maximum possible accuracy and failure to conduct a reinvestigation into dispute information, respectively. Unfortunately, this is one of many cases litigated by Ms. Alston involving the reporting of her Wells Fargo mortgage.  In a prior case against Wells Fargo, the Court decided that Wells Fargo’s reporting of her account as delinquent was accurate because the evidence established that Wells Fargo was entitled to collect payments from her during the period of reported delinquency and because, during that period, Alston made no legal payments on the mortgage. This is significant in the present case against the credit bureaus in that Ms. Alston was collaterally estopped from arguing that the reporting was inaccurate.  Collateral estoppel provides that a party may not relitigate…Read More

Failure to Mark Tradeline “Disputed” is a Violation of the FCRA


Hrebal v. Nationstar Mortgage LLC Case No. 17-cv-1815; D. Minn., June 14, 2019 The U.S. District Court granted summary judgment for the Plaintiff on a motion for reconsideration on the ground that the mortgage company negligently violated the Fair Credit Reporting Act when it repeatedly failed to report the consumer’s account as “disputed” in responses to the at-issue ACDV’s. The Court determined that there are no material factual disputes for a jury to resolve with respect to liability: the FCRA imposes liability on “furnishers” of consumer credit information, like Mr. Cooper, who fail to report that a loan delinquency is “disputed,” is a “reasonable investigation” could have uncovered that a borrower’s dispute with that delinquency was “bona fide” or ‘potentially meritorious.” This is so because reporting that a delinquency is, in fact, disputed may be necessary to prevent the dissemination of “materially misleading” consumer credit information. In this case, it…Read More

Duty to Investigate Dispute Remains Whether or Not Consumer Responds to Request for Information


Sponer v. Wells Fargo, et al. 3:17-cv-02035-HZ D. Ore – Portland Consumer/Plaintiff was victim of identity fraud – his ID was used to purchase a vehicle when he was out of the country.  Police arrested the man who used the Plaintiff’s identity, confiscated the stolen vehicle, and obtained a confession from thief.  Wells Fargo was notified of this by letter from the Plaintiff.  Wells Fargo contacted the police on multiple occasions who confirmed the underlying facts and who returned the vehicle to Wells Fargo. Despite this, Wells Fargo refused to remove the loan off of the Plaintiff’s credit report claiming that it’s obligation to conduct a reasonable investigation was extinguished when the Plaintiff failed to provide the specific documents requested. The Court didn’t buy this reasoning and noted that Wells Fargo had access to all, or nearly all, of the information it was requesting. The Court also noted that Wells…Read More

Post-Filing Modification Prevents Student Loans From Being Discharged in Bankruptcy


Naffis v. Xerox Education Services, LLC AP No. 15-0078 February 6, 2019 Consumer sought to discharge student loans but after filing the bankruptcy, the consumer consolidated his loans, which made them a “post-petition” debt and therefore not dischargeable. The consumer then Amended his Complaint to add violations of the Fair Debt Collection Practices Act (“FDCPA”) and the Maryland Consumer Debt Collection Act (“MCDCA”) because the servicer persuaded him to consolidate his loans, causing him to lose the opportunity for discharge. The servicer, Xerox Education Services, LLC (“XES”) filed a motion for summary judgment. The Court held that because the student loans were not in default at the time XES became the servicer, the FDCPA does not apply to them in this case.  The FDCPA states that “the term debt collector does not include any person collecting or attempting to collect any debt owed or due or asserted to be owed…Read More

Collateral Legal Disputes Not Appropriate For FCRA Action


Bornstein v. Trans Union LLC, et al, CV-18-04773-PHX-JJT June 5, 2019 Doctor’s office failed to bill insurance on time and did not get reimbursed.  A healthcare collection company assumed the debt and debt showed up on Plaintiff’s credit report.  Plaintiff sued under the FDCPA and FCRA stating a claim of negligence and willfulness for failing to remove the tradeline since she didn’t owe the debt, her insurance should have paid. Court grants Defendants’ Motion to Dismiss the FCRA claims as whether or not she owed the money is a legal question, not a factual question.  Therefore the report is not factually inaccurate.  Citing Carvalho, the Court said “because CRA’s are ill equipped to adjudicate contract disputes, courts have been loath to allow consumers to mount collateral attacks on the legal validity of their debts in the guise of FCRA reinvestigation claims.” The Court held that the Plaintiff’s Complaint raises a…Read More

Scales Tipped in Favor of Article III Standing Based on Harm Already Suffered Being Fairly Traceable to Defendant


Hutton, et al. v. National Board of Examiners in Optometry, Inc. 4th Circuit June 12, 2018 Case No. 17-1508 Class action on behalf of a group of individuals who registered to take the professional optometry licensure exam.  Groups of optometrists began to notice that fraudulent Chase credit card accounts began being opened in their names. The group determined that it was the National Board of Examiners in Optometry, Inc. (NBEO), instead of American Optometric Association or other similar groups, because only the NBEO stored their social security numbers. Additionally, several of the credit cards were opened with individual class members maiden names, names that they had not used since applying with the NBEO. The Maryland District Court dismissed the complaint ruling that it did not possess subject matter jurisdiction due to the Plaintiffs’ lack of standing. The District Court concluded that the Plaintiffs had failed to sufficiently allege that they…Read More

Inconsistent Disputes Lead to Poor Results


Letren v. Trans Union, LLC, 2017 WL 445237 (D. Md. February 2, 2017) – Judge Xinis In September of 2008, the Plaintiff’s property was foreclosed on. In December of 2009, the Plaintiff filed a Ch. 7 bankruptcy.  Beginning in March of 2010, after Trans Union received notice of the bankruptcy, it began reporting the Chase mortgage account as having been included in the bankruptcy. In 2013, the Plaintiff received a copy of his TransUnion credit report which was reporting the amount owed at “$0.00” with former terms of “$4,222 per month”. The status of the accounts as listed as “CBL: Chapter 7 Bankruptcy”. The Plaintiff disputed the reporting stating that the Chase account should be deleted because “Chase could not adequately demonstrate that they were the holder of the note.” TransUnion contacted Chase through the Automated Consumer Dispute Verification process. Chase responded by instructing TransUnion to remove the bankruptcy notations…Read More

TILA, RESPA and FCRA . . . Oh my!


Cole v. Federal National Mortgage Association, et al., 2017 WL 623465 (D. Md. February 13, 2017) The Plaintiff, Ms. Cole, brought a case against Fannie Mae and Severus alleging a number of claims under the Truth in Lending Act(TILA), the Real Estate Settlement Procedures Act(RESPA), the Maryland Consumer Debt Collection Act(MCDCA), the Maryland Consumer Protection Act(MCPA), and the Fair Credit Reporting Act(FCRA). Unlike most pro se Plaintiffs, who generally strike out when throwing a bunch of these claims against the wall, Ms. Cole hits a home run on every one and it is impressive to see. In 2007, the Plaintiff and her late husband obtained a mortgage loan on the property from a non-party, Bank of America. Mr. Cole passed away in 2013 and Ms. Cole became the sole mortgagor of the property. Severus declared the loan in default in February of 2014 and mailed Ms. Cole a Notice of…Read More

Sovereign immunity applies to claims against the Government . . . Sometimes


Robinson v. Pennsylvania Higher Education Assistance Agency, et al. 2017 WL 1277429 (D. Md. April 3, 2017) Plaintiff alleged that government student loans were fraudulently opened in his name and that he had only permitted Direct Loan to perform a credit check, not to open a loan account in his name. The parties dispute whether or not a “government or governmental subdivision or agency” in the definition of “person” includes the Department of Education, which is a federal agency. Under the doctrine of “sovereign immunities,” the United States is shielded from suit absent consent to be sued that is “unequivocally expressed.” United States v. Bormes, 133 S.Ct. 12, 16 (2012). A waiver of sovereign immunity cannot be implied and all ambiguities are resolved in favor of the Government. To date, neither the Supreme Court nor the Fourth Circuit has squarely ruled upon whether the FCRA waives sovereign immunity though the…Read More

Previous case establishing not inaccurate reporting by furnisher bars claim against CRA


Alston v. TransUnion, LLC, 2017 WL 1628420 (D. Md. April 27, 2017) The Plaintiff, acting pro se, alleges that the CRA’s violated two provisions of the Fair Credit Reporting Act, 15 U.S.C. 1681e(b) and 15 U.S.C. 1681i(a)(1). The Plaintiff alleges that the CRA’s erroneously relied on the bare, unsupported statements of the furnisher to report that the Plaintiff’s account was delinquent and continued to rely solely on the reporting by the furnisher, in this case, Wells Fargo. The court, citing Dalton v. Capital Assoc. Indus., Inc., 257 F.3d 409 (4th Cir. 2001), pointed out that the Fourth Circuit has interpreted Section 1681e to include an inaccuracy requirement, such that in order to establish a violation of Section 1681e, a plaintiff must show both (1) the consumer report contained in accurate information and (2) the reporting agency did not follow reasonable procedures to assure maximum possible accuracy. Additionally, the Court noted…Read More

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