FCRA Hassel – A Defense Roadmap for Furnisher Victory
Another furnisher victory on the pleadings, which again highlights the importance of an aggressive defense mindset from a case’s inception. Winning a case on a motion to dismiss is one of the quickest and most cost-efficient ways to end a lawsuit; and below is how Centric Bank’s (“Centric”) defense team did just that in Hassel v. Centric Bank, No., 2020 U.S. Dist. LEXIS 65883 (M.D. Pa. Apr. 13, 2020).
Mr. Hassel claimed that Centric violated the Fair Credit Reporting Act (“FCRA”) because Centric inaccurately reported his late mortgage payment to the credit reporting agency, Trans Union, LLC, and that Centric’s failed to perform an adequate investigation of the disputed inaccuracy when it received notice of dispute from Trans Union. But instead of pleading provable allegations, the complaint screamed, “I have defenses!”
In the fall of 2019, Centric reported Mr. Hassel’s “30 day delinquency” on his August 2019 mortgage payment to Trans Union. Mr. Hassel disputed the accuracy of Centric’s report with both Trans Union and Centric. After receiving the investigations results, Mr. Hassel filed an FCRA action against Centric and Trans Union and attached written communications between him and Centric to the complaint. It was this proof that actually won the day for Centric.
First defense: Mr. Hassel cannot assert a private cause of action against Centric (a furnisher) under FCRA because Centric is not a consumer reporting agency (i.e., Trans Union). FCRA section 1681i only applies to consumer reporting agencies and does not extend to a private cause of action against a furnisher. In the complaint, Mr. Hassel conceded that Centric was a furnisher, which left no fact in dispute on the question of whether Centric was a furnisher or consumer reporting agency. The Court agreed.
Next defense: Attachments to complaint demonstrated that Centric’s investigation was reasonable. Just because there is no private cause of action against a furnisher, does not mean that a furnisher escapes legal duties under the statute. The FCRA imposes certain duties on a furnisher once it receives notice of a consumer dispute from a consumer reporting agency to include, in part, conducting an investigation and reporting the results of that investigation to the consumer reporting agency. See 15 U.S.C. § 1681s-2(b). And that is what Centric did.
The very documents Mr. Hassel’s attached to the complaint proved that Centric did indeed conduct a reasonable investigation. Mr. Hassel’s documents showed that Centric investigated the dispute. In response to Mr. Hassel’s dispute, Centric provided Mr. Hassel proof that his August 9, 2019 mortgage payment was instead paid on September 9, 2019, which was thirty days late. Moreover, an August payment was returned due to insufficient funds, and was not fully satisfied until September 10, 2019. Hard to change those black-and-white facts. Therefore, these documents proved that Mr. Hassel’s payment was in fact thirty days late and Centric’s report to Trans Union was accurate. The court held that it would be “absurd” to require Centric to continue an investigation after the information it reported to a consumer reporting agency is proven accurate and that information was reported to the consumer. As a result, the Court dismissed the FCRA allegations against Centric because Mr. Hassel’s documents made clear that the information Centric’s reported to Trans Union was accurate, which left nothing to dispute against Centric.
To boot, the Court did not give Mr. Hassel an opportunity to amend the complaint because it would be “futile” since there was no way Mr. Hassel could otherwise allege that the information was inaccurate in light the documents before the Court. And that is music to any defendant’s/defense team’s ears.
Now we will just have to see what happens with the allegations against Trans Union. Stay tuned.