New York Federal Court Finds Notation of Loan Suspension on Credit Report Insufficient to Demonstrate Concrete Injury under FCRA
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The United States District Court for the Eastern District of New York recently dismissed a consumer's claim under § 1681e(b) of the Fair Credit Reporting Act (the "FCRA"), finding that the notation of a loan suspension on the consumer's credit report and the resulting diminution in his credit score were insufficient, standing alone, to demonstrate a concrete reputational or financial injury., 2021 WL 3239865 (E.D.N.Y. July 16, 2021). In the case, the plaintiff's mortgage payments were suspended from April 15 to July 1, 2020 as a form of emergency COVID-19 relief offered by the plaintiff's lender. Despite the suspension, the plaintiff continued to make his monthly mortgage payments on time. However, the plaintiff's credit report from Equifax reflected a 16-point drop in his credit score, which the plaintiff attributed to what he believed to be the mortgage lender's improper reporting of his mortgage payment suspension. The following month, the plaintiff's credit report stated that a remark by the plaintiff's mortgage lender had been removed from his account, although his credit score was not restored to its prior higher level. The plaintiff then brought a putative class action under § 1681e(b) of the FCRA against Equifax and VantageScore (the "Defendants"), a company co-owned by Equifax that provides an algorithm used to generate consumers' credit scores, alleging that the reporting of plaintiff's mortgage loan suspension and his resulting credit score drop constituted a negligent and willful violation of FCRA's requirement that credit reporting agencies employ reasonable procedures to ensure the accuracy of consumer reports. The Defendants moved to dismiss.
The District Court granted the Defendants' motion to dismiss, finding that the plaintiff lacked standing to bring the FCRA claim. First, the Court noted that to establish standing, the plaintiff was required to prove by a preponderance that: (1) he has suffered an "injury in fact," that is "an invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical;" (2) "a causal connection between the injury and the conduct complained of"; and (3) it is "likely . . . that the injury will be redressed by a favorable decision." Although the Court acknowledged that Congress has statutorily conferred legal interests on consumers under the FCRA, the Court found that the plaintiff failed to allege concrete and particularized injury to that interest. Relying on the Supreme Court's decision in, 141 S. Ct. 2190 (2021), the Court found that the notation of the plaintiff's loan suspension on his credit report and the diminution in his credit score were insufficient, standing alone, to demonstrate concrete reputational or financial injury. Specifically, the inaccurate credit reports were never disseminated to a third party and plaintiff did not allege that he tried or was imminently planning to use his credit report to procure credit. Finally, the Court found that the plaintiff failed to allege a risk of future harm. Accordingly, the Court dismissed the complaint.
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