Ciment v. TransUnion, LLC

Background

Fradel Ciment sued JPMorgan Chase Bank, N.A. (Chase), and TransUnion, LLC, Equifax Information Services, LLC, and Experian Information Solutions, Inc. (the credit-reporting agencies). She alleged that the defendants violated the Fair Credit Reporting Act, a federal law governing the accuracy of consumer credit information.

The lawsuit concerned two Chase credit-card accounts that had been charged off in 2019. A charge-off is an accounting treatment for a debt that a creditor considers unlikely to collect; it does not forgive the debt or eliminate the creditor’s legal right to collect it. Chase reported the accounts as charged off through July 2021. According to the amended complaint, Chase then stopped furnishing information about the accounts, and the agencies stopped reporting the charge-off notations for about two years. In August 2023, Chase began reporting the accounts as charged off again, and the agencies resumed reporting them.

Ciment argued that the renewed reporting made the accounts appear to have been charged off in 2023 rather than 2019. She disputed the accounts with the agencies in September 2023. TransUnion and Experian responded that the disputes did not appear to have come from Ciment or an authorized person, while Equifax said the account had been updated without substantively changing the disputed information. Ciment alleged that the defendants’ reporting contributed to the denial of three personal-loan applications in November 2023 and caused other credit-related and emotional harms. The opinion notes that she did not allege a credit-score drop after the accounts were reported again.

Claims Against Chase

Ciment alleged that Chase violated 15 U.S.C. § 1681s-2 by willfully or negligently failing to meet its duties as a furnisher of information to credit-reporting agencies. The court explained that some duties under § 1681s-2(a), including the duty to provide accurate information, cannot be privately enforced by an individual. To the extent Ciment asserted claims under that subsection, the court dismissed them.

The court then considered the privately enforceable claims under § 1681s-2(b). Those claims require, among other things, that the information reported by the furnisher be inaccurate or materially misleading. The court held that Ciment had not plausibly alleged that Chase’s reporting was inaccurate or misleading. The credit reports showed charge-off notations beginning in 2019, a period showing no data, and resumed charge-off reporting in 2023. Because an account can be charged off only once, and because the reports identified the 2019 charge-off in several ways, the court concluded that a reasonable reader would not understand the reports to show a second charge-off or a first charge-off in 2023. The court therefore dismissed Ciment’s claims against Chase without reaching the remaining elements of the § 1681s-2(b) claims.

Claims Against the Credit-Reporting Agencies

Ciment alleged that TransUnion, Equifax, and Experian failed to use reasonable procedures to ensure accuracy under 15 U.S.C. § 1681e(b), and failed to delete inaccurate information after receiving notice of a dispute under § 1681i(a). The court held that both types of claims require a threshold showing that the disputed information was inaccurate or incomplete.

For the same reasons it rejected the claims against Chase, the court held that Ciment had not plausibly alleged that the agencies’ reports were inaccurate or misleading. Because the threshold accuracy requirement was not met, the court dismissed the claims against the three agencies without examining whether their procedures or investigations were reasonable.

Leave to Amend and Disposition

Ciment had already amended her complaint once after receiving notice of the defendants’ anticipated arguments. She did not ask to amend again or identify additional facts that would cure the problems in the amended complaint. The court therefore declined to grant permission for another amendment on its own initiative.

The court granted the defendants’ motions to dismiss, directed the Clerk of Court to terminate the pending motions, and directed that the case be closed. The opinion does not state the dismissal disposition using the words “with prejudice” or “without prejudice.”