Santos v. Experian Information Solutions, Inc.

Background

Charito Santos alleged that Experian violated the Fair Credit Reporting Act, a federal law governing consumer credit reports. Her claims concerned an updated credit report dated December 8, 2020, which listed a joint NewRez mortgage held by Santos and her spouse, Lester Santos.

Santos alleged that she had remained current on the mortgage payments, that she was not a party to Lester Santos’s Chapter 13 bankruptcy case, and that the mortgage was not included or discharged in that case. She claimed the updated report was inaccurate or incomplete because it showed “No data” for mortgage-payment history from June through October 2020 and listed the recent balance as “Not reported.” She alleged that the report therefore indicated that the mortgage had no balance and that no payments had been made since June 2020.

Santos asserted three claims: that Experian failed to reasonably reinvestigate her dispute, failed to use reasonable procedures to ensure maximum possible accuracy, and failed to modify inaccurate or incomplete information. Experian moved to dismiss the amended complaint under Federal Rule of Civil Procedure 12(b)(6), which permits dismissal when a complaint does not allege enough facts to state a legally valid claim.

Court’s analysis

The court explained that each of Santos’s claims required her to plausibly allege that information in her credit file was inaccurate. A report can be inaccurate because it contains a plainly false statement. The court also explained that an omission or technically accurate entry may be actionable if it is materially misleading—that is, misleading in a way that could reasonably be expected to harm the consumer.

The court found that Santos had not met that standard. The updated report described the mortgage as “Open/Never late.” It separately showed the account balance, scheduled payment, paid amount, and payment-receipt date for each month from July 2019 through May 2020. Thus, the court found that the report expressly showed that Santos had made payments and that the mortgage had a balance as of May 2020.

The court also found it implausible that a reader would understand “No data” or “Not reported” to mean that the mortgage was closed, had no balance, or had no payments. Instead, those entries indicated that Experian did not possess the information. Santos alleged that the report prevented her from refinancing and caused other harm, but she did not allege facts explaining how a potential lender reasonably reached an adverse conclusion about her credit history or creditworthiness from those entries.

Ruling

The court granted Experian Information Solutions, Inc.’s motion to dismiss. It dismissed Charito Santos’s amended complaint with prejudice and directed that judgment be entered. Judge Eric C. Tostrud’s ruling was based on the conclusion that Santos had not plausibly alleged the inaccurate information required for any of her three Fair Credit Reporting Act claims.