Consumer Reporting Agency Wasn’t Unreasonable to Rely on Third-Party Information on Sixth Income – Pre-Employment | So Good News


November 25, 2022

The US Sixth Circuit Court of Appeals has rejected an attempt by a Michigan man to reopen the case. The man said the consumer reporting agency (CRA) broke the rules Fair Credit Reporting Act (FCRA). However, the court found that the CRA’s failure to recognize the misrepresentation, which was provided by a third party, was unreasonable.

According to the court’s latest release, the three judges affirmed the district court’s decision to grant summary judgment to the CRA. The decision came despite the agreement that the plaintiff had suffered injury from the CRA’s actions. However, the appeals court found it unreasonable to expect the CRA to see what was wrongly reported without being told.

After the complainant reported the error in August 2019, the CRA resolved the error within that month. According to the group, the CRA’s quick fix also confirms that it has maintained measures to ensure that reporting is as accurate as possible.

The issue at the heart of this case stems from two bankruptcy petitions filed by the plaintiff and his father. According to the court’s opinion, the petition filed by the plaintiff’s father incorrectly listed the plaintiff’s Social Security number.

Even if it was later resolved, the third-party information provider had already reported the errors to the CRA. Unfortunately, this meant that the plaintiff’s credit report had an unresolved bankruptcy for the next nine years.

When the complainant discovered this error, he sent a letter to the CRA asking them to correct it. The company corrected the error. However, according to the group, the mistake had already cost him the opportunity to renovate his home.

The plaintiff filed suit against the defendant and another CRA for violating the FCRA. The defendant received summary judgment while the other CRA settled. Ultimately, the court dismissed the case with prejudice.

On appeal, the plaintiff alleged that the defendant failed to maintain due process under the FCRA. The appellant emphasized the failure to rely on a third party rather than having a review process in place. However, the Sixth Circuit disagreed, finding that it would place a heavy burden on CRAs to require an independent review of each bankruptcy discharge.

Further, the CRA’s reliance on the third party was not misplaced. This decision came about because the CRA regularly audits the provider, and therefore believes that the provider will provide accurate and reliable information. Accordingly, the Sixth Circuit affirmed the summary judgment motion.

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