A Florida consumer has filed a lawsuit against a major consumer reporting agency (CRA), accusing it of failing to conduct a reasonable investigation of a verified debt. The plaintiff argues how the CRA must perform an investigation of reported facts itself under the Fair Credit Reporting Act (FCRA), not depend upon a debt furnisher to report accurate information.

In this case, the plaintiff argued that the defendant failed to meet the FCRA’s requirement of CRAs maintaining policies and procedures that ensure “maximum possible accuracy.” The issue centers upon a mortgage loan the plaintiff acquired in 2012 for a property he rented out to other tenants. The plaintiff later declared bankruptcy, and because the rent earned from the property covered the payments for the mortgage, he initially reaffirmed the debt. However, the bankruptcy trustee sold the property later in the process, and with the judge’s approval, he rescinded the reaffirmation.

The plaintiff was no longer responsible for the mortgage debt. However, he later learned that the debt still appeared on his credit report with the defendant. The plaintiff disputed it, so the CRA contacted the furnisher, who verified the debt. Because of this, the defendant informed the plaintiff of the confirmation, and it remained on his record. As a result, the plaintiff filed a lawsuit against the CRA, arguing that these actions did not constitute a reasonable investigation of disputed material under the FCRA.

Initially, the trial court disagreed, deciding this was a stretch of the FCRA’s intent and granting summary judgment to the CRA. However, after an appeal, the Eleventh Circuit overruled the decision, sans the summary judgment. Instead, the Eleventh Circuit claimed the CRA “willfully” violated the FCRA. In addition, the Eleventh Circuit found the CRA’s investigation not “reasonable as a matter of law” because it did nothing except request verification from the furnisher. As a result, the Eleventh Circuit questioned whether the CRA conducted a reasonable investigation and revived the case, which is now proceeding before a Florida jury.

In opening statements, the plaintiff’s attorney began their case by arguing how the FCRA requires CRAs to conduct a reasonable investigation. However, in this case, the defendant instead trusted the furnisher. Currently, the CRA’s responsibilities rest on a jury to decide. The outcome of this case could significantly impact the obligations of CRAs and furnishers alike as it pertains to investigations of the disputed information.

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