Seventh Circuit will determine meaning of FCRA reinvestigation requirement

Recently, we flagged an excellent segment from John Oliver on credit reporting. In light of that piece, consider this case, now on appeal to the Seventh Circuit:

Toyota Motor Credit Corp. believed Jeffrey Brill owed Toyota an outstanding debt on a car lease. Toyota reported that debt to Trans Union. In fact, Brill’s name on the lease paper had been forged and Brill himself did not authorize the lease. Brill disputed the debt with Trans Union and provided a sample of his real signature (from a prior lease with Toyota that no one disputed) to back up his claim about the forgery. Trans Union did no more than send an automated query to Toyota asking it for confirmation of the debt. Toyota provided the confirmation, and Trans Union refused to remove the debt from Brill’s file. As a result, Brill struggled with the fallout from his damaged credit for more than a year.

Brill sued Trans Union for failing to conduct a reasonable reinvestigation of his dispute as required by the Fair Credit Reporting Act. For that requirement to be meaningful, several courts have held, a reinvestigation generally must mean more than parroting the creditor’s information. Here, however, the district court dismissed the case at the pleading stage, holding that Trans Union need not have done more than it did because Trans Union had no power to cancel Brill’s debt and expert handwriting analysis would have been too expensive.

On Brill’s behalf, Public Citizen filed the opening brief today. Our brief argues that the power to modify a debt is irrelevant to Trans Union’s statutory duty to reinvestigate and that, when Congress imposed a duty to reinvestigate, it meant for that reinvestigation to be meaningful, not pro forma. We point out that there is no categorical rule against requiring expert analysis, but in any event Trans Union could have taken a number of other steps, including asking Toyota about its identity-verification procedures, speaking with the employees involved in executing the disputed lease, or even just looking at the documents itself. (The genuine and phony signatures are obviously different.) Additionally, the question of a reinvestigation's "reasonableness" is a question for the jury, so the district court erred in resolving that question as a matter of law on a motion to dismiss.

Here's our brief. Here's our press release.

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