The U.S. Court of Appeals for the Seventh Circuit recently opined that consumers are barred from asserting state common law claims based on inaccurate information furnished to a consumer reporting agency. The Court held that state law causes of action for wrongful furnishing are preempted by the federal Fair Credit Reporting Act (FCRA), and claims for wrongful furnishing under FCRA may be brought only by federal and state enforcement agencies and not by the consumer.
In this case, Purcell v. Bank of America, Kristine Purcell filed a complaint in Indiana state court, alleging that Bank of America (B of A) had furnished information of Purcell's alleged delinquency in loan payments to consumer reporting agencies when B of A knew that was not the case. B of A removed the case to U.S. District Court for the Northern District of Indiana. The District Court dismissed Purcell's claims under FCRA because FCRA does not permit a private action for damages for violation of FCRA's prohibition on wrongful furnishing. The District Court also dismissed Purcell's state common law claims without prejudice to refiling in state court.
B of A appealed, asserting that the state common law claims are expressly preempted by FCRA and that the District Court's dismissal of those claims should have been with prejudice, On appeal, the Court of Appeals agreed with B of A's position and remanded the case to the District Court with instructions to enter judgment for B of A on both federal and state law claims.