- Furnisher May Have a Duty to Go Beyond Its Own Records in Investigation
- March 10, 2009
- Law Firm: Strasburger & Price, LLP - Dallas Office
Watson v. Citi Corp., 2009 U.S. Dist. LEXIS 4187 (S.D. Ohio 2009)
Facts: Citibank referred Plaintiff’s account to a collection agency. The collection agency settled with Plaintiff but failed to notify Citibank. Citibank continued to report the debt as in default with a balance due. Plaintiff claimed that the inaccuracy on her credit report delayed her security clearance for a job. Plaintiff filed suit against Citibank and Experian, alleging breach of contract and violations of the FCRA. Experian settled with Plaintiff, but Plaintiff’s claims against Citibank were tried to the Court. The Court found Citibank to have violated its investigation duty under the FCRA and entered judgment against Citibank for the sum of $1.00 and costs.
- Furnisher’s Duties. Section 1681s-2(a) places a duty on furnishers of credit information to provide accurate information to CRA and a duty to correct and update information that is inaccurate.
- Furnisher’s Investigation. After receiving notice of a dispute from a CRA, the furnisher must, under 1681s-2(b), conduct a reasonable investigation concerning the disputed information, review all relevant information provided by the CRA, report the results of its investigation to the CRA, and correct any item of information found to be inaccurate or incomplete.
- Furnisher’s Investigation. To prevail on a claim against a furnisher for violation of its duty to investigate, a consumer must prove that: (1) a credit reporting agency notified the furnisher about the consumer’s dispute; (2) the furnisher failed to comply with one or more of its duties after receiving the notice of dispute; and (3) that such non-compliance was either negligent or willful.
- Furnisher’s Investigation. Given the nature of Plaintiff’s dispute (that she had settled with the collection agency), in the course of a reasonable investigation, Citibank should have contacted the collection agency to obtain the details of the settlement as opposed to relying on its own incomplete records. Citibank negligently failed to comply with its investigation duty, but there was no evidence to support a willful violation.
- Damages. To recover actual damages, a consumer must prove that the furnisher’s violation of the FCRA caused injury. Actual damages will not be presumed.
- Damages. The fact that Plaintiff’s security clearance was delayed, without proof that this delay was caused by Citibank’s non-compliance, is insufficient to establish actual damages.
- Attorney’s Fees. Plaintiff could not recover attorney’s fees under the FCRA, even though she is a lawyer, because she represented herself.