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Inconsistent Disputes Lead to Poor Results

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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 on the account and change the status to “120 days past due,” as well as the remark from “CBL: Chapter 7 Bankruptcy” to “Foreclosure Collateral Sold.”

In October of 2013, the Plaintiff sent a dispute to TransUnion, disputing the reporting and stating that the Chase account was discharged in his 2009 bankruptcy. But it was not being reported as such. TransUnion manually updated the account to reflect that the account was included in the bankruptcy

In February of 2014, the Plaintiff mailed another dispute to TransUnion claiming that the Chase account was a duplicate of his Homeward mortgage account. Chase was sent an ACDV to which it responded by changing the reporting back to 120 days late.

Then, in August of 2014, the Plaintiff submitted another dispute, claiming that the Chase account should be reported as discharged in bankruptcy and the status should not be 120 days past due.

At this point, you know that the Court is going to rule against the Plaintiff because of how unreasonable the Plaintiff’s actions already sound: the Plaintiff is being completely inconsistent.

The Court analyzes two different claims against TransUnion; the first is a claim under 15 U.S.C. 1681e(b). To prevail on a claim for violation of Section 1681e(b), a plaintiff must prove that: (1) his consumer report contains inaccurate information; (2) the CRA did not follow reasonable procedures to assure maximum possible accuracy of that consumer report; and (3) damages. See Dalton v. Capital Associated Indus., 257 F.3d 409, 415 (4th Cir. 2001).

Regarding “accuracy,” the Court notes that “a report is inaccurate when it is ‘patently incorrect’ or when it is ‘misleading in such a way and to such an extent that it can be expected to have an adverse effect.” (Citing Dalton, 257 F.3d at 415). The Plaintiff’s own contradictions throughout the life of his disputes and then, even in his deposition, allow the Court to find for the Defendant. Additionally, the Court notes that the Plaintiff repeatedly calls for TransUnion to prove that the Plaintiff was liable to Chase.  However, TransUnion does not bear this burden; the Plaintiff must show that the reporting is inaccurate. Because of all this, the Court fails to credit the Plaintiff with creating a disputed material fact as to accuracy.

Turning to “causation,” the Court held that “there cannot be a consumer report without disclosure to a third party.” Citing Jackson v. Warning, No. CV PJM 15-1233, 2016 WL 7228866, at *6 (D. Md. Dec. 13, 2016)(citing Wantz v. Experian Information Solutions, 386 F.3d 829, 834 (7th Cir. 2004)). “To make out a violation under Section 1681e(b), a consumer must present evidence tending to show that a credit reporting agency prepared a report containing inaccurate information.” Dalton v. Capital Associated Indus., Inc., 257 F.3d 409, 418-19 (4th Cir. 2001).

The Court, however, continues to make the following leap in logic, stating “if inaccurate information is never disclosed to a third party, the plaintiff cannot claim injury under this section.”  The facts, in this case, are bad on this point, but one can easily imagine an individual suffering stress, anxiety, sleepless nights, etc. simply by knowing inaccurate information is on their credit report, being unable to fix it, and anticipating the embarrassment they will feel the next time they need to attempt to get credit.  The person would likely even change their behavior to their detriment and to avoid this embarrassment – all without the credit report ever having been pulled by a third party.

In any event, in this case, the Court held that the Plaintiff generated no evidence that the Defendant communicated any information to a third party, and therefore, the Plaintiff was unable to sustain his burden under Section 1681e(b).

Finally, the Court examined the “reasonableness” prong. The Court citing FTC Commentary, which provided: “This section does not hold a consumer reporting agency responsible where an item of information that it receives from a source that it reasonably believed to be reputable appears credible on its face, and is transcribed, stored and communicated as provided by that source.” The FTC commentary goes on to say “Requirements are more stringent where the information furnished appears implausible or inconsistent, where procedures for furnishing it seem likely to result in inaccuracies, or where the consumer reporting agency has had numerous problems regarding information from a particular source.”

Judge Xinis notes that “once the accuracy of the information is actually challenged by a consumer, the sufficiency of a CRA’s conduct relative to its duty of care will be evaluated under a “balancing test” that weighs the cost of verifying the accuracy of the information versus the possible harm of reporting inaccurate information. At this juncture, the “balancing test” becomes markedly more favorable to a plaintiff who has disputed the accuracy of the information in his credit report.” Citing Johnson v. MBNA Am. Bank, N.A., 357 F.3d 426, 432-33(4th Cir. 2004).

The Court noted the factual inconsistency in all of the Plaintiff’s disputes and held that the Plaintiff simply did not demonstrate any genuine issue of material fact concerning the reasonableness of the Defendant’s procedures under Section 1681e(b).

Examining the Plaintiff’s 15 U.S.C. 1681i claim, the Court noted that the 4th Circuit has not specifically addressed whether Plaintiff must demonstrate inaccuracy of the report to sustain a Section 1681i claim but did note that a number of Courts had read that requirement into that section that that Judge Xinis agreed with that reasoning.  Additionally, the Court noted that “to prevail on a section 1681i claim, a plaintiff must show (1.) that he disputed the accuracy on an item in her or her credit file; (2.) the CRA failed to conduct a reasonable investigation; and (3.) that a reasonable investigation by the CRA could have uncovered the inaccuracy.”

In determining what constitutes a “reasonable investigation,” the Court noted that the 4th Circuit has weighed in on an analogous provision of the FCRA and held that to determine reasonableness, “the cost of verifying the accuracy of the information” should be weighed against “the possible harm of reporting inaccurate information.” The Court went on to hold that, though reasonableness is normally a jury question, summary judgment may be appropriate where a plaintiff fails to adduce evidence that would tend to prove that CRA’s reinvestigation was unreasonable.”

In this particular case, the Plaintiff complained to TransUnion about the reporting. TransUnion sent the disputes to Chase, which verified the account and consistently reported it at 120 days past due.

The Plaintiff’s problem, in this case, is that he provided no information to Trans Union, which would have enabled them to independently verify what he was saying was true.  Without a way to independently verify, how can Trans Union be accused of not conducting a reasonable reinvestigation? A Court simply is not going to require Trans Union to dig into the source documents of every dispute – the Plaintiff will lose the balancing test every time based on the costs that would be necessary for Trans Union to conduct those types of investigation for every dispute.

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