Severini v. Pennsylvania Higher Education Assistance Agency

Background

Hunter Severini brought this action without a lawyer under § 1681s-2(b) of the Fair Credit Reporting Act (FCRA). He alleged that PHEAA, which serviced his private student loan, failed to reasonably investigate disputes about information PHEAA supplied to credit-reporting agencies. Severini’s father, Walter Henry Severini, co-signed the loan.

Severini applied for economic-hardship payment forbearance in April 2015 and again in August 2015. PHEAA denied both applications because the income documents were insufficient. PHEAA’s application forms stated that borrowers had to continue making regular payments until a forbearance request was approved. PHEAA reported Severini’s account as delinquent for several months in 2015.

In November 2016, Severini disputed the reported delinquencies through several credit-reporting agencies. The disputes asserted that PHEAA had told him payments were not due while his forbearance applications were pending. PHEAA reviewed the disputes, the documents submitted with them, its account records, and records of telephone communications. PHEAA reported back that the information was accurate.

Legal standard

The court applied the summary-judgment standard under Federal Rule of Civil Procedure 56. Summary judgment is appropriate when the evidence shows no genuine dispute over a fact that could affect the outcome and a reasonable jury could not decide for the nonmoving party. Although courts give special consideration to people representing themselves, such a party still must present evidence supporting the claim.

For an FCRA claim under § 1681s-2(b), a furnisher of credit information must reasonably investigate a dispute after receiving notice from a credit-reporting agency, review relevant information, report the investigation’s results, and correct information found to be incomplete or inaccurate. The reasonableness of the investigation depends on the nature and scope of the dispute.

Discussion

The court held that the evidence did not support Severini’s allegation that PHEAA told him he could stop making payments while his applications were pending. PHEAA’s records did not corroborate that allegation, and the signed applications expressly required continued payments until approval. The court also noted that the applications were pending for a total of 14 days, while the reported nonpayments covered months outside those periods.

Based on this record, the court concluded that no reasonable factfinder could find PHEAA’s investigation objectively unreasonable. The court further explained that, even if Severini had shown an unreasonable investigation, he had not established damages. For a negligent FCRA violation, he needed evidence of actual harm caused by the violation. For a willful violation, he needed evidence that PHEAA knowingly and intentionally disregarded consumers’ rights.

Severini alleged that PHEAA’s actions drastically affected his and his father’s credit reports, but he did not produce evidence that he applied for credit, was denied credit, received less favorable credit terms, or suffered another proven loss. He also provided no evidence that PHEAA intentionally misrepresented or concealed information.

Disposition

Judge Edgardo Ramos granted PHEAA’s motion for summary judgment. The court directed the Clerk of Court to terminate the motion, mail a copy of it to Severini, and close the case.