SW Legal studies in Business

Violation of Fair Credit Reporting Act May Give Rise to Common Law Claims Too
Description

Federal court held that a consumer who provided evidence that a bank provided false information about credit activity to consumer reporting agencies, and then failed to investigate the dispute raised by the consumer, provided a cause of action for violation of the Fair Credit Reporting Act and, under state law, claims for negligence and libel.

Topic

Consumer Protection

Key Words

Fair Credit Reporting Act, Credit Reporting Agencies, Dispute, Negligence, Libel

C A S E   S U M M A R Y
Facts

Ori sued Fifth Third Bank and Fiserv for violations of the Fair Credit Reporting Act (FCRA). He contended that Fifth held mortgages on many homes, including his, and that it hired Fiserv to process information about mortgages. Through Fiserv, Fifth provided information to consumer reporting agencies (CRAs), which would make both Fiserv and Fifth liable for any violations of the FCRA. Based on their information, CRAs incorrectly reported that Ori was delinquent in mortgage payments. That information damaged his credit rating. He claimed that he notified the CRAs about the incorrect information, and that the information was provided to Fifth and Fiserv, but they did not investigate or correct the alleged error, which would be a violation of the FCRA. Ori sued for negligence and libel. Defendants moved for the claims to be dismissed.

Decision

Motion denied. The consumer's allegations that he informed the CRAs about disputed information in their reports required Fifth and Fiserv to investigate the issue. Failure to do so violates the FCRA, so the case may proceed. Further, the FCRA does not preempt the consumer's state common law negligence and libel claims about the consequences of furnishing false information to CRAs, so those claims may also proceed.

Citation

Ori v. Fifth Third Bank, ---F.Supp.2d--- (2009 WL 4895667, E.D. Wisc., 2009)

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