Reporting Debt Under the FCRA: How an Amended Date May Lead to Liability

The Fair Credit Reporting Act (“FCRA”) permits consumers to dispute the details of their credit reports. Upon receipt of a dispute, the credit reporting agency (“agency”) must notify the party that furnished the disputed information, which then has a duty to investigate. 15 U.S.C. § 1681i(a)(2). The FCRA provides a private right of action to enforce those duties. A recent case illuminates what could happen when the date that a consumer’s debt is recorded as uncollectible is amended and reported to an agency.

In Johnson v. Us Bank Home Mortg., et al., No. 20-cv-3433, 2020 U.S. Dist. LEXIS 216894 (N.D. Ill. Nov. 19, 2020), the plaintiff filed suit when its mortgagor reported two different dates for when part of its mortgage debt was “deemed uncollectible.” Under the FCRA, once the party that furnished disputed information receives notice of a consumer dispute, a number of duties are triggered, which include:

  • An investigation of the disputed information;

  • Reviewing all relevant information provided by the consumer reporting agency;

  • Reporting the results of the investigation to the consumer reporting agency;

  • If the information is inaccurate, then reporting the inaccuracies to all other reporting agencies to which the person furnished the information; and

  • If the information proves inaccurate or unverified, either modifying, deleting, or permanently blocking the report of the information.

Id. § 1681s-2(b)(1).

The plaintiff received a mortgage loan from U.S. Bank. Once the plaintiff began to fall behind on her payments, U.S. Bank reported that the mortgage was partially “charged off” because some of the debt had been “deemed uncollectible.” The dispute arose regarding how U.S. Bank, as the furnisher of information concerning the plaintiff’s mortgage, allegedly furnished that information and failed to perform a reasonable investigation. FULL ARTICLE