Collateral Legal Disputes Not Appropriate for FCRA Action

Bornstein v. Trans Union LLC, et al, CV-18-04773-PHX-JJT


June 5, 2019


The doctor’s office failed to bill the insurance on time and did not get reimbursed.  A healthcare collection company assumed the debt and debt showed up on the Plaintiff’s credit report. The 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.


The Court grants Defendants’ Motion to Dismiss the FCRA claims. As to 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 legal issue Defendant could not resolve on its reinvestigation. The Plaintiff’s proper course of action is to bring a suit directly against the original creditor (presumably a declaratory action).


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