Accurate adverse reporting not a violation of FCRA, says 3rd Circuit

Courts FCRA Appellate Third Circuit Credit Reporting Agency Credit Report

On August 15, the U.S. Court of Appeals for the 3rd Circuit affirmed summary judgment in favor of a credit reporting agency (CRA), concluding that the CRA did not violate the Fair Credit Reporting Act (FCRA) by reporting past negative incidents. According to the opinion, after struggling financially, a married couple missed payments on at least five credit accounts. The consumers allegedly resolved the late payments and filed complaints with the CRA arguing the continued presence of the late payments misrepresented the “real status of their credit.” Additionally, the consumers argued some of the “key factors” the CRA discloses to credit providers, “such as ‘[s]erious delinquency’ or ‘[a]mount owed on revolving [a]ccounts is too high,’ are misleading.” The consumers filed suit against the CRA, alleging a variety of federal and state law claims, including violations of the FCRA for failing to maintain reasonable procedures and failing to conduct a reasonable investigation into disputes. The district court granted summary judgment in favor of the CRA and the consumers appealed their FCRA claims.

On appeal, the 3rd Circuit agreed with the district court, concluding the consumers must show their credit report contains inaccurate information to prevail on their claims, which the consumers failed to do. The panel noted the consumers admitted they made the late payments and did not allege the adverse information is more than seven years old. The panel concluded the consumers’ claim “is not that the information in their credit reports and disclosures is inaccurate, but rather that it is irrelevant,” which does not support their claims for a violation under the FCRA.