Consumer Finance Litigation

A federal court in Washington last week declined to grant summary judgment in favor of OneWest Bank on a Fair Credit Reporting Act ("FCRA") claim where OneWest did not fully investigate account disputes received directly from the consumer and not from a consumer reporting agency. In McDonald v. OneWest Bank, FSB, Case No. C-10-1952RSL, 2013 WL 858187 (W.D. Wash. Mar. 7, 2013), the plaintiff/consumer notified three consumer reporting agencies ("CRAs") he disputed a debt OneWest was reporting on his credit report. He also sent letters directly to OneWest outlining the specific nature of his dispute. The CRAs gave OneWest notice of the dispute, but the notices were in the form of "dispute codes," stating only that the charge was "Not his/hers. Provide or confirm complete ID." OneWest confirmed the consumer's identity as the debtor but took no other action. OneWest did not specifically investigate the disputes received directly from the consumer. The Court ruled that OneWest's failure to investigate the disputes received from the consumer created an issue of fact regarding whether its investigation was "reasonable" as required under FCRA. "There is no statutory, policy, or case law justification for allowing a furnisher to ignore what it knows about a consumer's complaint simply because it was not included in the notice from the CRA," the Court opined. The key take away from this case is that, at least in the Ninth Circuit, notice of the dispute from the CRA triggers the duty to investigate, but a furnisher may not ignore any additional information received directly from the consumer. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.