For purposes of FCRA litigation, a plaintiff cannot strategically withhold arguments about the accuracy of information provided to a CRA when these arguments were not raised in the plaintiff’s original dispute with reporting agencies.  This principle was made clear in Garcia v. Specialized Loan Servicing LLC, although the procedural history of the case is somewhat unusual.  In Garcia, the court reversed an earlier denial of defendant’s motion for summary judgment on a FCRA claim on a motion for reconsideration and entered summary judgment for defendant – which is extremely uncommon.  Case No. 2:17-cv-01721-RFB-VCF, 2020 U.S. Dist. LEXIS 68499 (D. Nev. Apr. 20, 2020).

The plaintiff had filed suit against defendant under the FCRA for information the defendant furnished to a CRA concerning the reporting of a balloon payment amount of $53,419.  Before the litigation commenced, the defendant had updated its reporting information to correctly report other disputes plaintiff had raised but continued to report an account status of “charge-off” and the balloon payment amount of $53,419.  The court concluded in ruling upon defendant’s motion for summary judgment that there was a genuine dispute of material fact regarding whether the continued reporting of the $53,419 was inaccurate or misleading and denied defendant’s motion.

In arguing for reconsideration, the defendant argued that the court’s reliance on the “charge-off” notation was error, as the charge-off dispute was first raised in the litigation rather than in the dispute notice the plaintiff initially provided.

The court agreed.  To put it simply, because plaintiff did not contest the charge-off notation in the original dispute, defendant was never provided notice and therefore had no duty under the FCRA as to the balloon payment.  Therefore, in the context of summary judgment, the plaintiff failed to put forth admissible evidence that the balloon amount would have been misleading in such a way and to such an extent that it could be expected to adversely affect credit decisions, or that it was otherwise patently inaccurate.

As shown by Garcia, a plaintiff’s failure to contest a charge-off notation in the underlying dispute can doom a FCRA claim – even if the notation is later “disputed” in litigation.