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COURT HOLDS FAIR CREDIT REPORTING ACT (FCRA) PREEMPTS STATE STATUTORY & COMMON LAW CLAIMS

Grossman v. TRANS UNION, LLC – Dist. Court, ED Pennsylvania, 2014

In Grossman v. Trans Union, the court was faced with the issue of whether the consumer’s state law claims against the furnisher were preempted by the Fair Credit Reporting Act (“FCRA”).  In short, the court said yes, and dismissed the state law claims, including defamation, violation of the Pennsylvania CPL, negligence and invasion of privacy/false light.

Grossman filed suit against Ocwen and  the credit bureaus after disputing the status of a mortgage account.  Grossman disputed the reporting of a mortgage account by Ocwen.  Grossman alleged the reporting was incorrect because the mortgage should have been deleted because the forbearance agreement was terminated and he was current on his payments. He also alleged that Ocwen removed the account and repeatedly reinserted the account into his credit reports since 2005.  Grossman alleged that Ocwen violated the FCRA when it failed to perform a reasonable investigation of his disputes to the credit bureaus, and that Ocwen was liable under several state laws.

Ocwen moved to dismiss 4 of Grossman’s state law claims: defamation; violation of the Pennsylvania Unfair Trade Practices and Consumer Protection Law; Negligence; and invasion of privacy/false light.  Ocwen argued that these claims were preempted pursuant to 15 U.S.C. 1681t(b)(1)(F).  Ocwen argued the preemption provisions under 1681(h)(e) did not apply to it because it was not a consumer reporting agency.  Relying on Burrell v. DFS Services, LLC, 735 F.Supp. 2d 438, 450-451 (D.NJ 2010), the court agreed with Ocwen and dismissed the statutory and common law claims because they were preempted by the FCRA.

The FCRA is a complex consumer protection statute.  Indeed, as the Burrell court noted, “the almost incomprehensibly complex provisions of the FCRA” make it difficult for a layperson “to comply with the procedural requirements of the statute.”  This is exactly why consumers should retain an attorney to represent them against creditors and credit bureaus under the FCRA.  The FCRA includes a fee shifting provision, which enables most attorneys  to represent clients on a contingency basis.  For a free case review contact us at 1-800-263-9091.