SCARBO v. WISDOM FINANCIAL
2:20-cv-05355
| E.D. Pa. | Feb 2, 2022Background
- Plaintiff Deanna Scarbo was denied three loans and disputed three tradelines on her credit reports: an auto loan (Wisdom Financial), a charged‑off Credit One/collection account (LVNV Funding/Resurgent), and federal student loans (Great Lakes).
- LVNV acquired the Credit One account in February 2020; Resurgent updated name/address, changed the high‑credit/original‑amount field, and flagged the account as disputed after Scarbo’s disputes; the disputed three‑day difference in dates was immaterial.
- Great Lakes reported Scarbo’s federal student loans as deferred and "in good standing" (reflecting in‑school deferments/forbearances); it investigated and left the tradeline unchanged; Scarbo alleged misleading "original balance," payment months marked "no data," and an abbreviated account number.
- Wisdom repossessed Scarbo’s vehicle in 2015, sold it, and internal records showed a deficiency of $2,374.20, yet Wisdom reported a $15,068 balance to Experian and TransUnion from 2015 until January 2021.
- After Scarbo disputed Wisdom’s tradeline, Wisdom’s agent initially reviewed records, verbally confirmed the $2,374.20 balance, but the bureaus continued to show $15,068; only after suit did Wisdom correct the reporting, explaining an unchecked software box prevented transmission of the correct balance.
- Legal posture: cross‑motions for summary judgment under the FCRA (15 U.S.C. § 1681s‑2(b)) for failure to reasonably investigate disputed information; court denied Wisdom’s motion and granted LVNV’s and Great Lakes’ motions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| LVNV furnished inaccurate or misleading information and failed to correct it | LVNV reported wrong balance, debt‑to‑credit ratio, and opening date; these caused loan denials | LVNV says reporting was accurate; changes were made after disputes; date difference is immaterial and ratio did not cause denials | Court: LVNV’s reporting was not materially inaccurate or misleading; no duty to correct; summary judgment for LVNV |
| Great Lakes furnished inaccurate or incomplete/misleading student‑loan data and failed to mark dispute | Great Lakes misreported "original balance," omitted payment data ("no data" entries), redacted account number, and failed to flag dispute | Great Lakes says it accurately reported aggregate original balance, correctly used "no data" for deferments, redaction is industry practice, and dispute was not potentially meritorious | Court: Scarbo failed to show material inaccuracy or misleading information; no duty to mark disputed; summary judgment for Great Lakes |
| Wisdom failed to conduct a reasonable investigation after disputes about auto‑loan balance | Wisdom knew internal records showed $2,374.20 but kept reporting $15,068 despite disputes and prior verbal assurances to Scarbo | Wisdom contends the discrepancy was human error (unchecked box) and its investigations reasonably relied on its systems and beliefs | Court: Wisdom furnished factually inaccurate information and a reasonable jury could find its investigations unreasonable; Wisdom’s motion denied |
| Threshold: must show inaccurate, misleading, or material reporting causing actual/concrete harm | Scarbo argues tradeline errors led to loan denials and thus concrete harm | Defendants argue either no material inaccuracy or no causal link to denials | Court: Plaintiff must prove material inaccuracy and causation; where none exists (LVNV, Great Lakes) summary judgment is appropriate; where material inaccuracy plus potentially unreasonable investigation exists (Wisdom) triable issue remains |
Key Cases Cited
- SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355 (3d Cir. 2011) (explains furnishers’ duties under FCRA)
- Seamans v. Temple Univ., 744 F.3d 853 (3d Cir. 2014) (furnisher liability for unreasonable reinvestigation)
- Spokeo Inc. v. Robins, 578 U.S. 330 (2016) (Article III requires concrete harm, not just procedural violation)
- Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010) (reasonableness standard for furnisher investigations)
- Rambarran v. Bank of Am., N.A., 609 F. Supp. 2d 1253 (S.D. Fla. 2009) (investigation must reconcile reporting with internal records)
- Krajewski v. Am. Honda Fin. Corp., 557 F. Supp. 2d 596 (E.D. Pa. 2008) (plaintiff must establish furnished information is inaccurate)
- Pittman v. Experian Info. Sols. Inc., 901 F.3d 619 (6th Cir. 2018) (accuracy requirement and Article III harm analysis)
- Saunders v. Branch Banking & Trust Co. of Va., 526 F.3d 142 (4th Cir. 2008) (literally correct information may be misleading and thus inaccurate)
- Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) (misleading reports must be likely to have an adverse effect)
- Schweitzer v. Equifax Info. Sols. LLC, [citation="441 F. App'x 896"] (3d Cir. 2011) (discusses misleading accuracy theory under FCRA)
- Erickson v. First Advantage Background Servs. Corp., 981 F.3d 1246 (11th Cir. 2020) (court must view credit report as a whole when assessing misleading nature)
- Celotex Corp. v. Catrett, 477 U.S. 317 (1986) (summary judgment standard)