NC Federal Court Holds That Lack of Evidence of Liability on Disputed Account Precluded Summary Judgment on FCRA Claims

The U.S. District Court for the Western District of North Carolina held that a national bank’s lack of evidence showing a customer’s liability on a credit card account — which the customer consistently disputed — and failure to report to CRAs such dispute precluded summary judgment on the customer’s FCRA claims.

The defendant–national bank furnished information to CRAs showing that the plaintiff-customer “was obligated to pay the alleged debt [on a credit card] and [that] she was delinquent on the payments of the alleged debt.”  After the customer disputed the accuracy of the reporting, the bank investigated but determined the reporting to be accurate, even though it could not locate the original credit application.  The plaintiff then sued the bank, alleging that it did not conduct a reasonable investigation and furnished inaccurate information to CRAs in violation of FCRA and the North Carolina Debt Collection Act (NCDCA).

The court denied the bank’s subsequent motion for summary judgment as to claims for emotional distress damages resulting from negligent and willful violations of FCRA.  According to the court, the bank corroborated only identifying information, and not information indicating the plaintiff’s liability on the account (such as a signed original application).  Thus, the court determined that a genuine dispute of material fact existed as to whether the bank negligently violated FCRA by failing to conduct a reasonable investigation.  And because the bank did not report the ongoing dispute to CRAs, the court determined that a genuine dispute of material fact existed as to whether the bank willfully violated FCRA.  Further, the court determined that, under prevailing precedent, the plaintiff’s testimony by itself could serve as sufficient evidence of emotional distress.

The court, however, granted summary judgment in favor of the bank as to claims for economic damages under FCRA and claims under the NCDCA.  Finally, the court denied the plaintiff’s cross-motion for summary judgment because the motion did not rely on specific evidence in the record.