Appeals Court Reverses Summary Judgment in Favor of CRA in FCRA Lawsuit

Fair Credit Reporting Act (FCRA)

Written By ESR News Blog Editor Thomas Ahearn

On April 28, 2021, the Eleventh Circuit Court of Appeals reversed a summary judgment in favor of a nationwide credit reporting agency (CRA) in the lawsuit titled LOSCH v. NATIONSTAR MORTGAGE LLC and EXPERIAN INFORMATION SOLUTIONS, INC. that claimed the CRA violated the federal Fair Credit Reporting Act (FCRA).

In 2017, Plaintiff Henry Losch filed for Chapter 7 bankruptcy and discharged debts including the mortgage on his home. When his credit report still showed he was delinquent on the mortgage, Losch contacted Experian to correct the error but the CRA continued to report the outstanding mortgage so he filed a lawsuit under the FCRA.

Under the FCRA § 1681e(b) and § 1681i(a), a CRA is required to employ “reasonable procedures to assure maximum possible accuracy of the information concerning the individual” when preparing a credit report, and also to conduct a “reasonable reinvestigation” of disputed information when notified of a potential inaccuracy.

The United States District Court for the Middle District of Florida held that Experian did not violate the FCRA and granted the CRA summary judgment. The Appeals Court disagreed that the measures Experian took after being notified of the inaccurate credit report were “reasonable” and vacated the district court’s judgment and remand.

“In sum, we conclude that Losch’s claims that Experian negligently violated § 1681e and § 1681i by failing to undertake reasonable procedures to ensure maximal accuracy in its credit reports, and to conduct a reasonable reinvestigation of disputed information, survive summary judgment,” the Appeals Court concluded.

Enacted by Congress in 1970, the FCRA 15 U.S.C § 1681 promotes the accuracy, fairness, and privacy of consumer information contained in the files of CRAs and protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, including consumer credit information.

Employment Screening Resources® (ESR) – a leading global background check provider named the number one background screening firm by HRO Today in 2020 – offers white papers on how employers may avoid FCRA lawsuits and how CRAs may avoid FCRA lawsuits. To learn more about ESR, visit www.esrcheck.com.

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