Reyes v. EquifaxReyes v. Equifax
Before ELROD, Chief Judge, and CLEMENT and RAMIREZ, Circuit Judges.
IRMA CARRILLO RAMIREZ, Circuit Judge:
Mary Reyes sued Equifax Information Services, L.L.C., alleging that it violated the Fair Credit Reporting Act (FCRA) by continuing to report a delinquent Citibank credit card account in her consumer file after she disputed the underlying charges as fraudulent. The district court granted summary judgment in favor of Equifax and dismissed all her claims. We affirm.
No. 24-40415
I
A
On August 18, 2019, at approximately 3:30 a.m., Reyes received text messages flagging suspicious charges on her Citibank credit card account. That same day, she called Citibank, which immediately canceled her credit card and issued her a
Over the next few weeks, Reyes contacted Citibank to dispute the allegedly fraudulent charges, but Citibank contended they were valid. In September 2019, Reyes sent Citibank a letter requesting, among other things, reconsideration of her fraud claim. She also filed a complaint with the Consumer Finance Protection Bureau (CFPB).
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After October 2019, Reyes stopped making payments on the new Citibank account, maintaining that the outstanding charges were fraudulent. At some point, Citibank charged off the account and reported the unpaid balance of over $3,200 (including fees and accrued interest) to all three major credit reporting agencies, including Equifax.
On April 15, 2020, Reyes‘s attorney mailed Equifax a letter that states, in its entirety:
My client, Mary Reyes wishes to dispute the following item: Citibank Advantage Mastercard [old account number], with an approximate balance of $3122.
Upon information and belief, Client is a victim of Identity Theft. These are not her charges! Nor are they those of her husband Juan. Ms. Reyes has made multiple attempts to resolve this issue with no help from Citibank. See the attached documentation: Ms (sic) Reyes has filed police [reports] with The Fort Worth Police Department, The Dallas Police Department, and The Frisco Police Department. She has also made a complaint with the Consumer Finance Protection Bureau, as well as generated a Federal Trade Commission Identity Theft Affidavit. By law she has done more than enough to get this inaccurate tradeline corrected or deleted.
On behalf of my client, I demand an immediate correction or atleast (sic) a deletion of this account.
Pursuant to the Fair Credit Reporting Act, Please (sic) forward this dispute to the credit furnishers. If you are not going to forward them, please inform me so I may do so myself.
Even though Reyes‘s unpaid balance from the alleged fraud carried over to the new Citibank account and had been reported on her Equifax credit file as a “valid portion of [her] account balance,” the dispute letter identified a Citibank account number no longer in existence and that did not appear in her file.
On April 29, 2020, Equifax responded to Reyes by letter, explaining that the disputed item, her old “Citi Advantage Mastercard Account,” was not reported in her Equifax credit file at the time.
On May 1, 2020, Equifax received a fraud referral from another credit reporting agency regarding Reyes‘s new Citibank account number. The next day, Equifax
On June 18, 2020, Citibank sent Reyes a letter regarding her CFPB complaint, stating:
We respectfully decline your request to issue credit for the $2,535.72 in fraud charges billed on your prior account . . . that you identified as unauthorized. Our records reflect the transactions were processed using the embedded chip, which cannot be duplicated. Because valid purchases were made before the disputed charges using the same Chip card, which you confirmed was in your possession, we consider the transactions to be a valid portion of your account balance.
Because you disagree with the resolution of your claim, we previously requested the reporting agencies add a note to your credit profile stating that the information is “disputed by the consumer“. Should you wish to have the “disputed by the consumer” note removed from your credit profile, it will be necessary for you to contact us at the address listed above.2
On July 6, 2020, Reyes‘s attorney sent Equifax a second dispute letter, which continued to request the deletion of the old Citibank account. Equifax again responded to the letter, explaining the old account was not showing in her credit file.
On July 18, 2020, Equifax received another fraud referral from the same credit reporting agency about the new Citibank account. Equifax sent an ACDV request to Citibank, which again confirmed that the reported account information was accurate.
In August 2020, Reyes‘s application for a home improvement loan was denied. Reyes‘s Equifax credit report, which the lender considered in its decision, identified the following negative credit factors: (1) serious delinquency; (2) time since delinquency is too recent or unknown; (3) amount owed on delinquent accounts; and (4) number of accounts with delinquency.
Reyes‘s attorney sent Equifax a third dispute letter on October 5, 2020. The letter again only referenced the old Citibank account, but Equifax sent Citibank an ACDV request to verify information on the new account, and included the dispute letter. Citibank later verified that the information Equifax reported on the new account was accurate.
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On October 21, 2020, Equifax sent Reyes a letter explaining it had researched the new Citibank account and “verified that this item belongs to you.” It also provided the account information reported in her file: the new Citibank account was a charged-off account with an outstanding balance of $3,312, the last payment was made in October 2019, and the account was closed at the consumer‘s request.3
B
Reyes sued Equifax alleging it negligently and willfully violated
A magistrate judge recommended that the FCRA claims be dismissed because
The district judge adopted the magistrate judge‘s recommendation over Reyes‘s objections and granted Equifax‘s motion for summary judgment. The district court agreed that Reyes could not prevail on her FCRA claims because she failed to provide evidence that Equifax‘s consumer file contained factually inaccurate information and because she could not collaterally attack her Citibank debt by suing Equifax.
Reyes appeals the district court‘s dismissal of her
II
We review a summary judgment dismissal de novo, under the same standards used in the district court. See Hernandez v. Yellow Transp., Inc., 670 F.3d 644, 650 (5th Cir. 2012). Summary judgment is proper “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
III
“Concerned by ‘abuses in the credit reporting industry,’ Congress enacted the FCRA to ensure fair and accurate credit reporting that protects consumers while meeting the needs of commerce.” Hammer v. Equifax Info. Servs., L.L.C., 974 F.3d 564, 567 (5th Cir. 2020) (citation omitted). “To achieve those goals, the Act regulates the consumer reporting agencies that compile and disseminate personal information about consumers.” TransUnion LLC v. Ramirez, 594 U.S. 413, 418 (2021); see
A
Reyes argues the district court erred in concluding that the Citibank account information that Equifax reported in her consumer file was accurate.
Section 1681i sets forth the procedures a consumer reporting agency must follow when a consumer disputes the accuracy of information in the consumer‘s file. A consumer file is composed of “all of the information on that consumer recorded and retained by a consumer reporting agency regardless of how the information is stored.”
Section 1681i provides that, upon receiving notice that a consumer disputes “the completeness or accuracy of any item of information” in her file, the consumer reporting agency must “conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate.” Id. at
1
The district court found, and Reyes does not dispute, that she had to prove that the disputed information in her consumer file was inaccurate to prevail on her § 1681i claim.5 We have never addressed
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Although
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We join the other circuits in concluding that inaccuracy is a threshold requirement for § 1681i claims.
2
Here, the undisputed summary judgment evidence shows that the new Citibank account belonged to Reyes, over $2,500 in charges were incurred on the account, the charges had been made before Reyes reported them as fraudulent to Citibank, Reyes did not make any payments for those charges, the account was closed at Reyes‘s request, the account‘s outstanding balance of $3,312 (including fees and accrued interest) was charged off, and Citibank reported this information to Equifax. This information was correctly reported in her consumer file at the time Reyes filed a dispute with Equifax.7 Because the
B
Reyes argues that there was a genuine issue of material fact as to the accuracy of the Citibank account reported by Equifax because she did not make the underlying charges and is not liable for charges that are fraudulent. She contends that the reported Citibank account information was inaccurate because whether she “owed the debt” (i.e., the outstanding balance) was contested and unresolved. The district court rejected Reyes‘s argument, explaining that because her alleged inaccuracy was “based on a not-yet-adjudicated position that the debt is not legally valid,”8 it was not inaccurate for purposes of a § 1681i claim. The court concluded that “the FCRA does not provide a vehicle for Reyes to challenge the legal validity of her debt to Citibank by suing Equifax for accurately reporting that debt.”
Several circuit courts, including district courts within our circuit, agree that a consumer may not use § 1681i‘s reinvestigation procedures to collaterally attack the validity of a reported debt. See, e.g., DeAndrade, 523 F.3d at 68 (affirming summary judgment dismissal of § 1681i claim because consumer was “launching an impermissible collateral attack against a lender by bringing an FCRA claim against a consumer reporting agency“); Carvalho, 629 F.3d at 892 (“We agree that reinvestigation claims are not the proper vehicle for collaterally attacking the legal validity of consumer debts.“).9 These courts have found that credit reporting agencies are not tribunals and “are neither qualified nor obligated to resolve legal issues.”
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Denan v. Trans Union LLC, 959 F.3d 290, 296 (7th Cir. 2020); Chaitoff, 79 F.4th at 814 (“We have long held that [consumer reporting agencies] are not well suited to adjudicate legal defenses to a debt, so they are not liable for reporting information that may be legally inaccurate.“); Wright, 805 F.3d at 1242 (explaining that a reasonable reinvestigation “does not require [consumer reporting agencies] to resolve legal disputes about the validity of the underlying debts they report“). Because consumer reporting agencies lack the authority to adjudicate legal disputes, “courts have been loath to allow consumers to mount collateral attacks on the legal validity of their debts in the guise of FCRA reinvestigation claims.” Carvalho, 629 F.3d at 891. Instead, they recognize that “[t]he FCRA expects consumers to dispute the validity of a debt with the furnisher of the information or append a note to their credit report to show the claim is disputed.” Wright, 805 F.3d at 1244; see Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1156 (9th Cir. 2009) (noting that “the furnisher of credit information stands in a far better position to make a thorough investigation of a disputed debt than the [consumer reporting agency]“).
1
Reyes argues that we should not follow what she refers to as the “Collateral Attack
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Section 1681i(a)(5) states, in relevant part, that “[i]f, after any reinvestigation under paragraph (1) of any information disputed by a consumer, an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall [] promptly delete that item of information from the file of the consumer, or modify that item of information, as appropriate, based on the results of the reinvestigation . . . .” Because “inaccurate” and “verified” are not defined in the FCRA, we look to the ordinary meaning of those terms. See Gross v. FBL Financial Services, Inc., 557 U.S. 167, 175 (2009) (“Statutory construction must begin with the language employed by Congress and the assumption that the ordinary meaning of that language accurately expresses the legislative purpose.” (internal quotation marks omitted)); United States v. Santos, 553 U.S. 507, 511 (2008) (“When a term is undefined, we give it its ordinary meaning.“). The ordinary meaning of “verify” is: “1 To prove to be true; confirm; substantiate. 2 To confirm the truth or truthfulness of. 3 To authenticate.” Webster‘s Collegiate Dictionary 1064 (3d ed. 1919). As discussed, we previously defined “inaccurate” as applied in the FCRA context as “patently incorrect” or “misleading.” See Sepulvado, 158 F.3d at 895.
In Mader v. Experian Info. Sols., Inc., 56 F.4th 264, 267 (2d Cir. 2023), the consumer alleged that Experian was inaccurately reporting his student loan debt because it was discharged following his bankruptcy. Although he claimed that the debt was a private loan and not subject to the discharge exemption for education loans, the bankruptcy decree did not explicitly discharge this debt and had noted that student loan debts are not discharged. Id. at 268. The court explained that if an alleged inaccuracy “evades objective verification“—like inaccuracies that turn on legal disputes—it is not cognizable under the FCRA. Id. at 269–70. Because there was an unresolved legal question regarding whether the consumer owed the debt, its reporting by Experian, as found by the court, was “not sufficiently objectively verifiable to render [his] credit report ‘inaccurate’ under the FCRA.” Id. at 270. We find the Second Circuit‘s reasoning persuasive and apply it in this case.
Although § 1681i “requires the prompt deletion if the disputed information is inaccurate or unverifiable,” the alleged inaccuracy reported by the consumer reporting agency must first be “sufficiently objectively verifiable” to be actionable under the FCRA. See id.; see also Sessa v. Trans Union, LLC, 74 F.4th 38, 40 (2d Cir. 2023) (“[A]n FCRA claim alleges an ‘inaccuracy’ so long as the challenged information is objectively and readily verifiable.“); cf. Roberts v. Carter-Young, Inc., 131 F.4th 241, 251 (4th Cir. 2025) (“Inaccuracies that are objectively and readily verifiable do not include claims of tortious conduct that require a furnisher to evaluate the subjective nature of the parties’ actions—such as claims of fraud or retaliation.“). This reading is faithful to the statutory text and the legislative purposes behind the FCRA. See S. REP. NO. 108-166, at 7 (“Achieving the accuracy in consumer report information was a main goal of the FCRA when it was enacted in 1970.“); see also United States v. Marshall, 798 F.3d 296, 309 (5th Cir. 2015) (“Where possible, statutes must be read in harmony with one another so as to give meaning to each provision.” (citation omitted)). In contrast, reading
2
Reyes contends that several years before the Collateral Attack Cases were decided, this court “correctly applied the deletion requirement of Section 1681i(a)(5)(A) to the ‘cannot be verified’ condition” in Pinner v. Schmidt, 805 F.2d 1258, 1262 (5th Cir. 1986) and Stevenson v. TRW Inc., 987 F.2d 288, 293 (5th Cir. 1993). In Pinner, we held that it was unreasonable for the consumer reporting agency that, despite receiving evidence of a contentious, personal dispute between the plaintiff and the manager of his ex-employer, contacted only the manager to verify the debt (which was later found inaccurate). 805 F.2d at 1260-62. In Stevenson, we held that the consumer reporting agency was liable for failing to promptly delete disputed information, where there was evidence that it had determined that certain reported accounts were either confirmed inaccurate by the furnisher or unverifiable because the furnisher did not respond to its verification requests. 987 F.2d at 293. Reyes‘s reliance on these cases is misplaced.
Although both cases recognized that a consumer reporting agency can be liable for not deleting “unverifiable” information in certain circumstances, they did not address a claimed inaccuracy that would require the consumer reporting agency to adjudicate a legal dispute like the validity of debt. Additionally, unlike here, the disputed information in Pinner and Stevenson were confirmed to be factually inaccurate, and the liability of the consumer reporting agencies ultimately turned on the reasonableness of their investigations.
We find persuasive the reasoning of the Collateral Attack Cases and join the other circuits in holding that consumer reporting agencies are not required to investigate the legal validity of disputed debts under the FCRA.10
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The judgment of the district court is AFFIRMED.