Varlack v. TransUnion

Background

Tynearia A. Varlack, appearing without a lawyer, brought claims under the Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, against TransUnion, Experian, Equifax, and Discover Bank. She also invoked various provisions of the Uniform Commercial Code. Varlack alleged that she found information on her credit reports resulting from a “billing error” on October 20, 2021. She said that, after she sent several disputes, a consumer reporting agency determined that the information had been verified as correct. She also alleged that she did not consent to sharing her personal information with third parties and sought a “forward flow agreement.”

The court had previously allowed Varlack to proceed without prepaying filing fees. Because the action was filed without prepayment, the court screened the complaint under 28 U.S.C. § 1915(e)(2)(B), which requires dismissal of claims that are frivolous, malicious, fail to state a claim, or seek money from an immune defendant. The court also considered whether it had subject-matter jurisdiction and applied the requirement that a complaint contain enough facts to make a claim plausible.

Claims against the consumer reporting agencies

The court considered whether Varlack’s allegations could support claims under two FCRA provisions governing consumer reporting agencies: Section 1681e(b), which requires reasonable procedures to ensure the maximum possible accuracy of credit-report information, and Section 1681i(a)(1)(A), which requires a reasonable reinvestigation when a consumer disputes reported information.

For a Section 1681e(b) claim, the court explained that a plaintiff must allege, among other things, that the agency failed to use reasonable procedures, reported inaccurate information, caused an injury, and proximately caused that injury. The court found Varlack’s allegations insufficient because she did not identify what information on her reports was inaccurate, explain how it was inaccurate, or describe how any agency failed to use reasonable procedures.

The court likewise found that Varlack had not stated a Section 1681i(a)(1)(A) claim. Her allegations showed that she disputed information, the agencies investigated, and the information was verified as accurate. But she did not provide enough facts to show that any of the three agencies failed to conduct a reasonable reinvestigation. The court therefore concluded that she failed to state FCRA claims against Experian, TransUnion, and Equifax as pleaded.

Claim against Discover Bank

The court treated Discover Bank as a possible furnisher of information to the consumer reporting agencies rather than as a consumer reporting agency. It explained that the FCRA imposes duties on furnishers under Sections 1681s-2(a) and 1681s-2(b), but that an individual consumer may sue under Section 1681s-2(b), not Section 1681s-2(a), under the authorities discussed in the order.

A Section 1681s-2(b) claim requires allegations that the furnisher received notice of a dispute from a consumer reporting agency and then negligently or willfully failed to conduct a reasonable investigation. The court found Varlack’s allegations insufficient because she did not allege facts supporting an inference that Discover Bank negligently or willfully failed to conduct a reasonable investigation. The order therefore concluded that she failed to state an FCRA claim against Discover Bank as pleaded.

Leave to amend and disposition

Because Varlack was representing herself and might be able to state a valid FCRA claim by alleging additional facts, the court granted her 60 days to file an amended complaint. The amended complaint must replace, rather than supplement, the original complaint. The court directed her to identify the relevant people, describe what each defendant did or failed to do and when and where it happened, describe her injuries, and state the relief sought.

The court ordered that the amended complaint be submitted to the Pro Se Intake Unit, labeled “Amended Complaint,” and include docket number 23-CV-6760 (LTS). No summons would issue at that time. The court stated that if Varlack failed to comply within the permitted time and could not show good cause, the complaint would be dismissed for failure to state a claim. The court also certified that an appeal would not be taken in good faith and denied permission to proceed without prepaying fees for purposes of an appeal.