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4TH CIRCUIT REINFORCES FCRA RULE – NO PRIVATE CAUSE OF ACTION AGAINST FURNISHERS FOR REPORTING FALSE INFORMATION UNDER FCRA

4TH CIRCUIT REINFORCES RULE – NO PRIVATE CAUSE OF ACTION AGAINST FURNISHERS FOR REPORTING FALSE INFORMATION UNDER FCRA

In Lovegrove v. Ocwen, the Fourth Circuit Court of Appeals reinforced a well-settled FCRA rule.  There is no private cause of action against furnishers for reporting false information.  See 15 U.S.C. § 1681s-2(a).  In Lovegrove, the plaintiff sued Ocwen under a couple of federal consumer protection statutes, the Fair Credit Reporting Act (FCRA) and Fair Debt Collection Practices Act (FDCPA).  With respect to the FCRA claim, the plaintiff alleged Ocwen violated the FCRA when it reported false information about his mortgage, which was included in bankruptcy.

Analysis – The FCRA prohibits data furnishers “from providing inaccurate information ‘relating to a consumer to any consumer reporting agency if the person knows or has reasonable cause to believe that the information is inaccurate.'” 15 U.S.C. § 1681s-2(a)(1)(A). Further, the FCRA requires data furnishers “to correct and update information provided to CRAs so that the information is ‘complete and accurate.'” § 1681s-2(a)(2). The FCRA does not provide for a private right of action under § 1681s-2(a).  § 1681s-2(c), (d); Saunders v. Branch Banking & Trust Co., 526 F.3d 142, 149 (4th Cir. 2008).

However, a private right of action does exist under 15 U.S.C. § 1681s-2(b), which requires a “creditor who has been notified by a [CRA] that a consumer has disputed information furnished by that creditor” to investigate the dispute, “`report the results of the investigation to the consumer reporting agency,'” and, if any information was inaccurate, report the results of the investigation to the other CRAs. Johnson v. MBNA Am. Bank, NA, 357 F.3d 426, 429-30 (4th Cir. 2004) (quoting 15 U.S.C. § 1681s-2(b)).

I have blogged about this issue before.  Unless and until a consumer makes a dispute to the consumer reporting agencies, and the furnisher verifies the false information as a result of its unreasonable investigation, consumers cannot successfully sue furnishers under the FCRA.  Accordingly, the Court of Appeals agreed with the trial court that Ocwen complied with this requirement, and it “immediately corrected the credit reporting error once notified by a CRA of the dispute.”

Is a creditor or debt collector reporting false information about you or one of your clients?  Have you or your client disputed the false information to Equifax, Experian or Trans Union, and the data furnisher “verified” the false information? If you answered yes to any of these questions, then you should contact The Adkins Firm.

The Adkins Firm represents consumers with credit report errors.  We represent clients under the federal Fair Credit reporting Act (FCRA) in federal court.  We accept FCRA referrals from lawyers across the country.  Mr. Adkins is admitted to all federal district courts in Alabama, Colorado and Texas.  He has also been admitted on motion into federal  courts in the following districts: California; Florida; Georgia; Illinois; Indiana; Kentucky; Mississippi; New Jersey; Oregon; Pennsylvania and the District of Columbia.

If you or your clients have discovered credit report errors and need help with the dispute process with the consumer reporting agencies, contact us for a free case review or referral.