7th Circuit says credit bureaus don’t need to dig into debt ownership

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The offices of the credit reporting company Equifax Inc. are pictured in Atlanta, Georgia, USA on September 8, 2017. REUTERS / Tami Chappell

  • The court ruled in favor of the credit organizations in the cases brought by the borrowers
  • The Fair Credit Reporting Act did not require them to review sales agreements to determine debt ownership

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(Reuters) – The 7th U.S. Court of Appeals has ruled that the Fair Credit Reporting Act does not require consumer credit bureaus to further investigate when a borrower disputes the property of a debt collector. his debt.

United States Circuit Court Judge Michael Brennan wrote for the court on Thursday that six consolidated appeals by borrowers in cases against Experian, TransUnion and Equifax implicated “the sometimes obscure line between ‘law’ and “Facts”.

“We believe that the plaintiffs’ claims that creditors did not own their debts are not factual inaccuracies that consumer news agencies are legally required to guard against and review, but primarily legal issues. beyond their jurisdiction, ”Brennan wrote for the three-judge panel. .

Lawyers for borrowers and credit bureaus did not immediately respond to requests for comment on Friday.

All six cases involved borrowers challenging ownership of their credit card debts in lawsuits against the Big Three consumer credit bureaus.

The borrowers alleged that the agencies failed to thoroughly investigate the ownership of the debts, which appeared on their credit reports, in violation of the FCRA.

The law requires agencies to conduct a “reasonable re-investigation” when borrowers complain of inaccuracies in their credit report.

In all six cases, Chicago federal judges dismissed or ruled in favor of the credit agencies, ruling that the law did not require them to investigate further after debt collectors, including Midland Credit Management, told the agencies that they owned the debts.

Brennan, joined by Circuit Court judges Diane Wood and Amy St. Eve, upheld the rulings on Thursday.

The court rejected the borrowers ‘argument that the issue was a question of fact because all the credit reporting agencies had to do was verify the debt collectors’ purchase and sale contract.

“An assignment is a creature of law: to have a valid assignment, the parties must meet certain legal requirements,” the court said.

The case is Chuluunbat v. Experian Information Solutions Inc. et al., 7th United States Court of Appeals, No. 20-2373.

For Chuluunbat: Celetha Chatman and Michael Wood from Community Lawyers Group and Daniel Brown from Main Street Attorney

For Trans Union: Camille Nicodemus of Schuckit & Associates

For Equifax Information Services: Rodney Lewis and Claire Brennan de Polsinelli

For Experian Information Solutions: Adam Wiers, Chris Hall and Jules Cantor from Jones Day

Jody godoy

Jody Godoy reports on banking and stock market law. Contact her at jody.godoy@thomsonreuters.com

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