Thanks are owed to SPB summer associate Gabby Martin for her contributions to this article.

Last month, a Florida federal jury found in favor of a credit reporting agency (“CRA”) in a trial centering on whether the CRA took “reasonable” steps to assure the accuracy of a consumer’s credit report after a consumer dispute.  The result is a valuable glimpse into how juries view the burdens of the statutory obligations placed on reporting agencies by the Fair Credit Reporting Act (“FCRA”).

In Losch, No. 2:18-cv-00809-MRM (M.D. Fla.), the plaintiff was a consumer who discharged a debt in bankruptcy.  After the consumer’s bankruptcy, however, he received his own credit report from a CRA and saw that the discharged debt was inaccurately included as a delinquent debt.  The consumer then wrote a letter to the CRA disputing the inclusion of the discharged debt and requesting that the CRA correct the credit report.

After the CRA received the consumer’s letter, the CRA then forwarded it to the creditor of consumer’s discharged debt.  The creditor confirmed to the CRA that the consumer’s debt was outstanding.  The CRA then relayed the creditor’s response back to the consumer and took no additional steps to verify the accuracy of the credit report.

Notwithstanding the above, in 2018, the consumer brought FCRA claims against the CRA and the creditor (who settled with the consumer before trial) in Florida federal court.  After the Eleventh Circuit reversed a grant of summary judgment in favor of the CRA in April 2021 (995 F.3d 937), two main issues were left for the jury to decide: (1) whether the CRA used “reasonable procedures to assure maximum possible accuracy” of consumer’s credit report, 15 U.S.C. § 1681e(b), and (2) whether the CRA “conduct[ed] a reasonable reinvestigation” into the disputed information in the consumer’s credit file, 15 U.S.C. § 1681i(a).

At the June trial, as reported elsewhere, the two sides gave contrasting stories on the importance of the role of the creditor who furnished and confirmed the inaccurate data to the CRA.  The consumer argued that the FCRA did not allow the CRA to shift its reinvestigation duties to a third party, while the CRA emphasized that the statute only requires “reasonable” efforts.  The CRA also referred to the consumer’s testimony at his deposition, where he expressed that, at the time he sent his letter, he hoped that the CRA would have contacted the creditor.

On July 1, the jury returned its verdict in favor of the CRA.  The jury found that the consumer failed meet his burden to prove by a preponderance of the evidence that the CRA “fail[ed] to follow reasonable procedures to assure maximum possible accuracy” or that Experian “fail[ed] to conduct a reasonable reinvestigation after it received [consumer’s] dispute letter.”  The consumer has since filed a notice of appeal to the Eleventh Circuit.

The jury verdict in this case gives a glimpse into how juries view the reasonableness of credit reporting agencies’ efforts to confirm credit report accuracy.  Going forward, credit report agencies may be on safer footing whenever inaccurate information is confirmed by a data furnisher (at least when the underlying debt stems from a bankruptcy discharge).  You can be sure that CPW will be following developments in this appeal and will keep you in the loop.