10th Circuit Vacates $500k FCRA Verdict Because Debt Resulting from Identity Theft Was Not Objectively and Readily Verifiable

The U.S. Court of Appeals for the Tenth Circuit vacated a $500,000 jury verdict on a FCRA claim because the subject debt listed on the plaintiff’s credit report (which he claimed to be inaccurate as the result of identity theft) could not be objectively and readily verified.

The plaintiff’s daughter purportedly used his personal information without his permission to lease a residential property for her own use.  Subsequently, the daughter was evicted for not paying her rent on time, and the defendant–debt collector acquired the debt resulting from the unpaid rent.  When he saw this debt listed on his credit report, the plaintiff disputed the debt as fraudulent.  The debt collector’s investigation, however, determined that the information was accurate.

The plaintiff sued the debt collector in Colorado federal court, alleging that it had failed to conduct a reasonable investigation in violation of FCRA.  The case proceeded to trial, and the jury rendered a verdict in favor of the plaintiff and awarded $500,000 in damages.  The district court also denied the debt collector’s post-trial motion seeking to set aside the verdict.

The Tenth Circuit reversed.  Adopting the approach taken by several other Circuits, the Tenth Circuit held that “reported information is actionably ‘inaccurate’” under FCRA “‘only if that information is objectively and readily verifiable’ by the furnisher as containing a mistake or error.”  As the court further explained, “a dispute that involves complex fact-gathering and in-depth legal analysis of the sort that courts would typically perform is not objectively and readily verifiable.”

Given the frequently complex nature of fraudulent conduct, the Tenth Circuit concluded that the plaintiff’s identity theft claim did not involve a simple application of law to facts such that the debt collector could have objectively and readily verified his claim.  Accordingly, the Tenth Circuit vacated the judgment in favor of the plaintiff and remanded the case for the district court to enter judgment in favor of the debt collector.