Shaunfield v. Experian
(N.D. Texas, Dallas Division, Dec. 2013)
John Shaunfield sued Experian, Radiology Associates of North Texas, American Honda Finance Corp., and Credit Systems International under the Fair Credit Reporting Act (FCRA) and various state law claims. Shaunfield alleged Experian violated the FCRA when it provided companies with two different credit reports under his name. One of Shaunfield’s Experian reports included an incorrect date of birth and had limited or no credit history. Experian provided companies with a second report, which purportedly related to Shaunfield. The second report contained incorrect accounts, including accounts related to the other named defendants.
Shaunfield disputed the credit report errors several times to Experian, in writing, and included legal documents in support of his credit report disputes. Experian corrected some of the incorrect items, but refused to admit that Shaunfield’s documents were legitimate. Experian continued to report the inaccurate information.
Experian, Radiology Associates, American Honda and Credit Systems filed motions to dismiss Shaunfield’s claims. Here is how the court ruled on the FCRA claims:
Experian – Section 1681i: Reasonable Reinvestigation
Experian moved to dismiss Shaunfield’s claims under 1681i. First, Experian argues that Shaunfield’s claim should be dismissed because other than the incorrect date of birth, Shaunfield’s complaint doesn’t articulate any other facts as to his inaccurate credit information that caused his damages. Second, Experian argued that Shaunfield’s complaint demonstrates that it’s reinvestigation satisfied its duties under the FCRA “because Plaintiff concedes ‘that Experian conducted a reinvestigation into his dispute.'”
The court rejected both of Experian’s arguments. First, the court acknowledged the FCRA does not require a consumer to dispute “credit information” to trigger a consumer reporting agency’s duty to perform to a reasonable reinvestigation. The FCRA requires consumer reporting agencies to perform a reasonable reinvestigation of any information disputed by a consumer. 15 U.S.C. Section 1681i(a); see also Pinner v. Schmidt, 805 F.2d 1258, 1262 (5th Cir. 1986).
Once a consumer reporting agency receives a dispute, the consumer reporting agency must determine whether the disputed information is inaccurate, incomplete or unverifiable. Cousin v. Trans Union Corp., 246 F.3d 359, 367 n. 11 (5th Cir. 2001). The consumer reporting agency must also notify the furnisher of the information within 5 days of receipt of the consumer’s dispute and review and consider all relevant information submitted by the consumer. 15 U.S.C. 1681i(a). Further, “any item of information” includes any items in a consumer file and is not limited to credit items. Thus, Shaunfield made a claim under 1681i when he disputed date of birth information in his Experian file.
Second, the court acknowledged that Shaunfield adequately alleged a violation of the FCRA when he alleged that he had been denied credit and forced to pay higher interest rates because of his Experian report. Thus, Shaunfield did make a plausible claim that Experian violated the FCRA and that he suffered actual damages.
Section 1681e(b): Reasonable Procedures to Assure Maximum Possible Accuracy
Next, Experian unsuccessfully argued that Shaunfield’s claim should be dismissed because he did not identify any inaccurate information in his credit report. The court rejected this argument because Shaunfield alleged that Experian disseminated two different credit reports relating to him, including one report which included limited or no credit history. Thus, the court held the allegation raised the inference that Experian included inaccuracies in his credit report.
Experian also argued that Shaunfield did not state any facts in support of his 1681e(b) claim that Experian did not have or follow reasonable procedures when it sold his credit report. “The standard of conduct by which the trier of fact must judge the adequacy of agency procedures is what a reasonably prudent person would do under the circumstances.” Thompson v. San Antonio Retail Merchs. Ass’n, 682 F.2d 509, 513 (5th Cir. 1982). The court again rejected Experian’s argument stating that Shaunfield’s allegations raised a reasonable inference that Experian did not adopt or use reasonable procedures to assure maximum possible accuracy of the information in Shaunfield’s credit report because the reports included inaccurate information.
FCRA Claim Against Radiology, AHFC & CSI
§1681s-2(b): Reasonable Investigation
Collectively, the furnisher defendants moved to dismiss Shaunfield’s FCRA claim for failure to state a claim. When a consumer makes a dispute to a consumer reporting agency, and the consumer reporting agency notifies a furnisher that the consumer has disputed information, “the furnisher must conduct its own investigation with respect to the disputed item, correct any inaccuracy, and notify the agency of the results of its investigation. 15 U.S.C. § 1681s-2(b).” The “plaintiff must show that: (1) he disputed the accuracy or completeness of information with a consumer reporting agency; (2) the agency notified the furnisher of the consumer’s dispute; (3) and the furnisher failed to conduct an investigation, correct any inaccuracies, or notify the agency of the results of the investigation. Smith, 2010 WL 3338537, at *15; see also 15 U .S.C. §§ 1681s-2(b); 1681i(a)(2).
The defendants argued that Shaunfield merely recited the statute and did not plead facts with specificity that they violated the FCRA. “Plaintiff fails to specify, and nothing in the complaint indicates, the false, negative information that Radiology, AHFC, and CSI allegedly supplied Experian and that they failed to correct or delete from his credit report. His assertions read more like a recitation of the elements of a § 1681s-2(b) claim than specific allegations of wrongdoing.” The court agreed with the defendants stating that Plaintiff failed to plead with specificity and that his allegations sounded like a recitation of elements. Defendants’ motion to dismiss this claim was granted by the court.