The Fair Credit Reporting Act ("FCRA") permits consumers to dispute the details of their credit reports. In Johnson v. US Bank Mortg., et al., No. 20-cv-3433, 2020 U.S. Dist. LEXIS 216894 (N.D. Ill. Nov. 19, 2020), the Plaintiff, Tonya L. Johnson ("Johnson"), brought suit against US Bank Home Mortgage ("US Bank") and a national credit reporting agency, under the FCRA, alleging that US Bank failed to conduct a reasonable investigation into her claims that US Bank improperly changed the dates it reported in the "Date of Status" field and "First Reported Date" field of the trade line for her mortgage, in violation of 15 U.S.C. §1681s2-(b)(a)(A). Id., *5.
Johnson obtained a mortgage from US Bank and, upon her subsequent default, US Bank reported that her loan was partially "charged off", meaning it is "deemed uncollectible." Id., *3 Johnson's credit report originally listed the "Date of Status" and "First Reported Date" for her mortgage as August 2015. On June 15, 2018, she noticed that both entries had been changed to reflect a more recent date furnished by US Bank to the credit agency, June 2016. Id. Johnson initiated a dispute with the credit agency, which forwarded the dispute to US Bank, but US Bank continued to furnish the June 2016 date to the credit agency. Johnson asserted that the charge-off date entered into the "Date of Status" field should remain static no matter what happens later and that the "First Reported Date" field likewise should not change because it reflects "the date in which the debt had its first major delinquency." Id. US Bank filed a Motion to Dismiss, contending that Johnson failed to state a claim because there are circumstances in which a furnisher could properly amend the fields to reflect more recent events. US Bank also argued that Johnson failed to adequately plead a willful violation of the FCRA.
As a threshold matter, in denying US Bank's Motion, the Court held that whether a change to the "Date of Status" or "First Reported Date" field undermines the accuracy of information furnished by a creditor "depends, in part, on how furnishers and consumer reporting agencies use those two terms." Id. The Court denied US Bank's Motion to Dismiss, holding that changing the date in these fields can undermine the accuracy of the information reported and that Johnson had adequately pled that US Bank would have uncovered the error had it conducted a reasonable investigation. Id., *6.
The Court also held that Johnson sufficiently alleged that US Bank knowingly ran a greater than careless risk, thereby "willfully" violating the FCRA, enabling her to seek statutory and punitive damages under §1681n(a). Id., *7 (citing Killingsworth v. HSBC Bank Nevada, N.A., 507 F.3d 614 (7th Cir. 2007). The Court held that US Bank could not argue that it held a reasonable belief that its conduct was legal, "because it knew or should have known that amending the charge-off date was legally perilous given Seventh Circuit precedent holding that '[t]he recording of multiple dates in the 'Date of Last Activity' can cause significant confusion and uncertainty for the consumer. Id., *8 (quoting Gillespie, 484 F.3d 938, 941 (7th Cir. 2007)). Thus, the Court refused to dismiss Johnson's claims that US Bank willfully violated the FCRA by reporting changed dates to the credit agency. Troutman Pepper is monitoring the case and will report on any new developments.
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