CFPB and FTC File Amicus Brief Urging Second Circuit to Find FCRA Requires Unverified Information to be Deleted from Consumer Report

On September 28, 2023, the Consumer Financial Protection Bureau (CFPB) and Federal Trade Commission (FTC) (collectively, the agencies) filed an amici curiae brief urging the U.S. Court of Appeals for the Second Circuit to reverse a district court’s decision finding a furnisher’s investigation of a consumer’s dispute and subsequent furnishing of the disputed information to be reasonable under the Fair Credit Reporting Act (FCRA).

As discussed here, in Suluki v. Credit One Bank, N.A., a New York federal district court granted summary judgment for the defendant holding that the plaintiff was unable to prove that a reasonable investigation of her dispute alleging identity theft would have shown that information in her credit report was inaccurate. “The evidence shows at most that [the plaintiff’s] mother opened the account in [the plaintiff’s] name. There is no alternative investigation that would have allowed [the defendant] to determine that [the plaintiff] did not give her mother permission to open the account, short of relying on a police or FTC report to that effect which [the plaintiff] never provided.” Because the plaintiff did not allege any additional steps the defendant could have taken, the court granted summary judgment in the defendant’s favor.

But the agencies argue in their brief that the district court’s holding overlooks the fact that furnishers are required to remove disputed information when it is unverifiable. Section 1681s-2(b)(1)(E) of the FCRA states that when disputed information “is found to be inaccurate or incomplete or cannot be verified,” the furnisher must delete, modify, or permanently cease reporting the disputed information. Thus, the agencies argue that the plaintiff should not have been required to make a showing that the reporting was inaccurate. Instead, “if [the defendant] did not have sufficient evidence to show that the disputed information was true yet reported that its investigation verified the accuracy of the disputed information and continued to report that information, then [the plaintiff] could have sustained damages as a result of its improper continued reporting of the disputed information.”

In the press release announcing the filing of the agencies’ brief, the FTC stated, “[i]naccurate information on a consumer report can hamper people’s ability to get housing, employment, and credit. The FTC and CFPB maintain that the lower court’s decision could impact consumers’ rights under the FCRA to dispute the completeness or accuracy of information and have it removed if a furnisher cannot verify that it is accurate.”