The Southern District of New York dismissed an action under the Fair Credit Reporting Act (FCRA), finding that there was no private right of action under section 1681s-2(a) for purportedly inaccurate reporting by a furnisher.
Background
In Wendy Marie Drews v. Goldollar Real Estate Investments, et al. (S.D.N.Y., July 28, 2025, No. 24-CV-6697 (LLS)) 2025 WL 2144728, Plaintiff moved into an apartment owned or managed by defendants. While Plaintiff was gone, the property manager “unlocked [the] door . . . and allowed the police without a warrant to abduct [her] 16-year-old son.” The son was then placed in foster care for 142 days. Plaintiff contended that defendants violated her rights under multiple Constitutional Amendments and multiple federal statutes, including a claim that defendants reported a debt to a Credit Reporting Agency (CRA), causing her credit to drop 22 points. Plaintiff specifically alleged that defendants violated the FCRA because the CRA report was improper.
Court’s Decision
The Southern District of New York analyzed whether Plaintiff properly stated a claim under FCRA. Under the FCRA, there is no private right of action unless it is under Section 1681s-2(b)(1). To state a claim under Sec. 1681s-2(b)(1), a consumer must show that (1) a furnisher received notice of a credit dispute from a CRA and (2) the furnisher negligently or willfully failed to conduct a reasonable investigation. The reasonableness of a furnisher’s investigation depends upon the nature and scope of the consumer’s dispute.
The Court discussed that an individual plaintiff cannot sue for a violation of Sec. 1681s-2(a) because the subsection of the FCRA is enforced exclusively by the federal agencies and the state officials identified in Sec. 1681s. Thus, there is a limited scope of what the Court can review when it comes to a violation of the FCRA, specifically the violations falling under Sec. 1681s-2(b)(1).
Here, Plaintiff failed to state a claim under Sec 1681s-2(b)(1) as she did not allege facts suggesting that any defendant received notice of a dispute regarding her information from CRA, nor does she say that the CRA failed to conduct a reasonable investigation. Thus, Plaintiff’s FCRA claims did not fall under Sec. 1681s2(b)(1). Plaintiff was found not to have a private right of action under the FCRA, and therefore any FCRA claim she asserted was dismissed for failure to state a claim on which relief may be granted.
Key Takeaway
This case serves as a reminder that the only cause of action against a furnisher under the FCRA is for failure to conduct a reasonable investigation upon receipt of a dispute.
