Unreported / Non-Citable
Background
Mary Jane Newcomb obtained a mortgage that Nationstar Mortgage LLC later acquired. She filed for Chapter 13 bankruptcy in 2018 and received a discharge in 2023, but the Nationstar mortgage was excepted from discharge. Newcomb alleged that she made timely and regular mortgage payments during the bankruptcy.
In July 2024, Newcomb obtained a credit report in which Trans Union allegedly reported the Nationstar account as closed, with a zero balance, a derogatory rating, and bankruptcy remarks. After she disputed that reporting, Trans Union removed the Nationstar tradeline. Newcomb then sued under Sections 1681e(b) and 1681i of the Fair Credit Reporting Act, alleging inaccurate reporting and an inadequate reinvestigation. Trans Union moved for judgment on the pleadings under Federal Rule of Civil Procedure 12(c).
The Court’s Holding
The court granted Trans Union judgment on the pleadings. It held that removing the single Nationstar mortgage from Newcomb’s post-dispute credit report amounted to an omission, which did not make the report inaccurate under governing Fifth Circuit law. The court distinguished precedent involving the deletion of 92 accounts and concluded that the deletion of Newcomb’s single mortgage could not support an FCRA claim.
As to the pre-dispute report, the court assumed without deciding that Newcomb had alleged a factual inaccuracy rather than a legal dispute about the effect of bankruptcy. Her Section 1681e(b) claim nevertheless failed because she offered only conclusory assertions that Trans Union did not follow reasonable procedures. Her Section 1681i claim likewise failed because her allegations that Trans Union verified false information, deleted the tradeline, and disregarded her evidence did not plausibly show an unreasonable reinvestigation. The court dismissed both claims but allowed Newcomb 28 days to amend her complaint.
Key Takeaways
- Deleting one mortgage tradeline from a credit report is an omission that, without more, does not constitute an actionable inaccuracy under the FCRA.
- A Section 1681e(b) plaintiff must plead facts connecting an alleged inaccuracy to the credit reporting agency’s failure to use reasonable procedures; formulaic allegations are insufficient.
- A Section 1681i plaintiff must allege concrete facts showing an unreasonable reinvestigation, not merely assert that the agency verified false information, ignored evidence, or deleted the disputed tradeline.
Why It Matters
The decision underscores that an inaccurate entry and an omitted account are treated differently under the FCRA, particularly when only one tradeline is missing. Consumers generally cannot transform the deletion of a single disputed account into an actionable reporting inaccuracy.
The opinion also illustrates the factual specificity required at the pleading stage. Even where a report may contain inaccurate information, plaintiffs must plausibly explain how the reporting agency’s original procedures or subsequent reinvestigation were unreasonable.