A federal appeals court Monday partially overturned a lower court ruling and reinstated a lawsuit filed by a consumer who charged a credit reporting agency with violating the Fair Credit Reporting Act by not correcting an error.
Jeffrey Chaitoff fell behind on his mortgage payments in 2016 after he lost his job, according to the ruling by the 7th U.S. Circuit Court of Appeals in Chicago in Jeffrey Chaitoff v. Experian Information Solutions Inc.
He made three reduced payments under his loan agency’s Trial Period Plan and his loan was modified accordingly, but Costa Mesa, California-based Experian continued to report him as delinquent, which led to his being denied a mortgage based on his credit report.
Mr. Chaitoff sued Experian in U.S. District Court in Chicago, charging it did not follow reasonable procedures to ensure its reports’ “maximum possible accuracy” and to reasonably reinvestigate their accuracy after his letters alerted it to potential errors.
The district court granted Experian summary judgment dismissing the case. In largely overturning the lower court, a three-judge appeals court panel ruled that Experian was not immune from liability under the Fair Credit Reporting Act.
“Experian’s initial reporting efforts were reasonable beyond any doubt, so it earned summary judgment” on the related claim, it said.
“But we disagree with the district court as to Experian’s investigations after Chaitoff alerted it to the discrepancy,” it said.
“A reasonable jury could find that there was a cost-effective step Experian could have taken that would have discovered” the Trial Period Plan’s] existence, it said, in reversing in part the lower court and remanding the case for further proceedings.
Mr. Chaitoff’s attorney, Daniel Zemel, of Zemel Law LLC in Clifton, New Jersey, said in a statement that Mr. Chaitoff “is pleased with the fact that the Court held Experian must publish accurate and complete credit reports, and must reasonably investigate the disputes once they’re brought to their attention.”
Experian’s attorneys did not respond to a request for comment.
