In an unpublished decision, the U.S. Court of Appeals for the Ninth Circuit recently affirmed the decision of a California district court finding that the furnisher conducted a reasonable investigation under the Fair Credit Reporting Act (FCRA) when it updated its credit reporting to more accurately reflect the plaintiffs’ payment history.
In Harris v. Broker Solutions, Inc., the plaintiffs obtained a mortgage loan from the defendant in 2013. The plaintiffs paid off their loan in 2019, but in 2021 they submitted a credit dispute regarding the defendant’s reporting of their loan. The plaintiffs alleged that the defendant improperly furnished a “D” to the consumer reporting agencies (CRAs) in the payment history profile indicating “no payment history reported/available.” The district court granted summary judgment for the defendant holding that the “D” code was an acceptable option when reporting the account status as current.
On appeal, the Ninth Circuit conducted its analysis accepting the plaintiffs’ argument that the defendant erroneously reported a “D” to the CRAs for certain months in the payment history profile. As set forth in § 1681s-2(b) of the FCRA, the plaintiffs needed to, at a minimum, establish that the defendant furnished inaccurate information to the CRAs and show that it failed to reasonably investigate the inaccuracy after receiving notice of the dispute. In reviewing the facts, the appellate court noted that the defendant determined that it should have been reporting a “0” code for several months in the payment history profile, signifying that the account was “current or past due by not more than twenty-nine days.” Additionally, it noted that the defendant submitted corrections to the CRAs to update it reporting to reflect a “0” in the payment history profile.
Based on these facts, the Ninth Circuit held that the defendant’s updating of the payment history profile to report the loan as current for the disputed months proved that the defendant’s investigation into the plaintiffs’ disputes was reasonable and affirmed the district court’s ruling.
