The U.S. Court of Appeals for the Fifth Circuit affirmed a lower court decision that found Equifax and Experian’s reinvestigation of the plaintiff’s dispute was reasonable when the companies used the Automated Consumer Dispute Verification (“ACDV”) system to report information back to the data furnisher, Citibank.

Guy Barron, the plaintiff, was denied a Best Buy credit card, supported by Citibank based in whole or in part on information provided by TransUnion.  Mr. Barron disputed a late payment to Citibank with Equifax, Experian, and TransUnion.  Citibank confirmed the late payment and noted that the adverse information was accurate.  Following the confirmation by Citibank to Equifax and Experian, the two credit bureaus notified Mr. Barron of the accuracy.  After this, Best Buy sent Mr. Barron a separate letter noting that it was “unable to change the information reported to the credit reporting agencies” because the information was accurate.  Mr. Barron sued Equifax and Experian.

Barron argued that the reinvestigations by these credit bureaus were unreasonable because “they did not contact Best Buy directly. He claims that if they had, Best Buy would have informed them Barron did not owe the debt.”  The very terms of the FCRA require CRAs to “implement an automated system through which furnishers of information to [CRAs] may report results of a reinvestigation that finds incomplete or inaccurate information in a consumer’s file to other such consumer reporting agencies.”  The Court said that “[t]he district court held that a reporting agency’s reliance on the ACDV system is generally acceptable…We agree with the district court that Barron has offered no reasonable factual basis for finding the defendants should have been on notice of a need to go beyond the ACDV system as to this dispute.”

As noted in a posting by Katherine A. Spicer at Squire Patton Boggs,

Mr. Barron also tried to shoehorn an allegation under 15 U.S.C. § 1681e(b) against Equifax and Experian, which requires CRAs to ‘follow reasonable procedures to assure maximum possible accuracy’ in preparing consumer reports.  But neither Equifax nor Experian ‘prepared’ the consumer report that formed the basis of the credit denial, TransUnion did.

Barron v. Equifax Info. Servs., L.L.C, No. 19-60817, 2020 U.S. App. LEXIS 13026 (5th Cir. Apr. 22, 2020).