Plaintiff Cheryl Davis alleged that Experian violated sections of the Fair Credit Reporting Act ("FCRA") by failing to report the timely payments made to her mortgage company and failing to reasonably reinvestigate the status of the account following her dispute. Davis filed for bankruptcy in 2011 and ultimately received a discharge in 2013. Davis' Experian consumer disclosure indicated that her mortgage account was "discharged through Chapter 13 bankruptcy/never late" in 2017. It was Davis' contention that the mortgage account was exempt from discharge because it was not discharged in bankruptcy. Upon receiving the 2017 disclosure, Davis sent Experian a letter identifying the disputed mortgage debt accompanied by documents related to her position.

The FCRA indicates that in the event a consumer disputes the accuracy of information reported, a credit reporting agency ("CRA") is required to perform a reasonable investigation within thirty days. Originally, the Nevada District Court determined that Davis did not notify Experian of the inaccuracy, which was the foundation of her dispute. As such, the district court determined that Experian had no obligation to reinvestigate how the mortgage account was discharged as related to her bankruptcy.

In overturning this decision, the Ninth Circuit noted that "a notice of dispute does not require precise language and an inadequate notice does not eliminate the duty to reinvestigate altogether." The court further reasoned that "one could plausibly infer from the documents Plaintiff provided that she disputed whether Experian had mischaracterized her mortgage debt as discharged."

Employers are encouraged to review protocols in place with any CRA partnerships to ensure workflows support compliance with the FCRA as it relates to disputes and reinvestigations.

Posted: June 22, 2021