A recent ruling by the U.S. Court of Appeals for the First Circuit should assist companies in defending claims brought under the Fair Credit Reporting Act that they failed to conduct a proper investigation when notified by a consumer reporting agency (CRA) that an individual has disputed information furnished by the company.
In its decision in Chiang v. Verizon New England Inc., issued on February 9, 2010, the First Circuit agreed with the Fourth Circuit in holding that an individual has a private right of action under the FCRA for a furnisher’s violations of its investigation obligations under 15 U.S.C. §1681s-2(b). More important, however, the First Circuit also held that the plaintiff has the burden to show that a furnisher’s investigation was unreasonable and that, to do so, the plaintiff must show that the disputed information contained factual inaccuracies that a reasonable investigation would have discovered.
The plaintiff alleged that Verizon, after being notified by several CRAs that he disputed the accuracy of information it had furnished about his account, failed to conduct an adequate investigation of his dispute. In affirming the lower court’s entry of summary judgment for Verizon, the First Circuit found that the plaintiff had not presented any evidence that Verizon’s investigation procedures were unreasonable. According to the First Circuit, the plaintiff’s attempt to rely solely on his own statements and assertions that information furnished by Verizon was inaccurate and that he had discussed his dispute with Verizon was insufficient to raise any genuine issue of material fact that Verizon’s investigation was unreasonable. The First Circuit also found that the plaintiff’s failure to show factual inaccuracies in the furnished information that could have been discovered in a reasonable investigation provided an independent basis for entry of summary judgment in Verizon’s favor.