FTC Joins CFPB Amicus Filing Alleging Second Circuit’s Misinterpretation of FCRA Requirement

Last month the FTC and CFPB (the Agencies) filed a joint Amicus Brief in the Second Circuit urging the Court of Appeals to reverse a recent decision by the Court in which the Agencies allege the Court disregarded the FCRA requirement that credit reporters delete disputed consumer information that cannot be verified.

The plaintiff in the underlying case reportedly notified the Credit Reporting Agencies (CRAs) that a particular line of credit appearing on her credit report was opened by plaintiff’s mother without plaintiff’s permission.  When the credit card company investigated plaintiff’s claim regarding the line of credit, the company concluded the account belonged to the plaintiff.  Plaintiff subsequently sued the company, alleging the company’s investigation to be insufficient in light of what is required under FCRA when a consumer contests the accuracy of their information.  In response to the company’s motion for summary judgment, the district court concluded plaintiff could not show any harm that stemmed from the company’s alleged failure to, “conduct a reasonable investigation” and did not demonstrate that a reasonable investigation would have yielded evidence to support plaintiff’s claim that the line of credit was opened without her permission.  Plaintiff has appealed to the Second Circuit.

In the Amicus Brief, the Agencies argue that the Court’s interpretation of FCRA in favor of the company to be incorrect.  According to the Agencies, under FCRA, a furnisher of credit information that is unable to confirm information contested by a consumer is required to a) report to CRAs that the contested information could not be confirmed; and b) must delete the contested information from the consumer information reported to the CRAs.

The Agencies’ brief further argues that the Court’s decision ignored the possibility that the company was not able to verify the debt in question as belonging to the plaintiff and therefore should have removed the information from plaintiff’s credit report as required under Section 1681-2(b)((1)(E) of FCRA. 

The case is Khalilah Suluki v. Credit One Bank, NA, 23-721 (2nd Cir. 2023).