New FCRA case - Josey v. Sallie Mae, Inc.

A new case came out of the United States District Court for the Southern District of New York (which I am happy to say I have had a case or two in) on August 17, 2009. The case is styled Yolanda Josey v. Sallie Mae, Inc. and U.S. Dept of Education. The case is yet another attempt by a pro se plaintiff that fails miserably. When will people learn not to try to represent themselves.

Josey believed that Sallie Mae imposed an improper interest rate under the Higher Education Act, failed to properly credit Josey's account for payments she has made, falsely and inaccurately reported the loan balance to the big 3 credit bureaus, and violated her rights under the Debt Collection Improvement Act of 1996, her constitutional Due Process rights, right to notice of debtor's rights, and congressionally mandated consumer protections notice of student loan borrowers rights to different payment options and exemptions. I will focus only on the attempt at alleging an FCRA claim but, suffice it say, all the claims failed thanks in part to the lack of legal training of the plaintiff.

Josey would have been well served had she carefully read 15 U.S.C. 1681s-2(b), which requires notice of a dispute to a consumer reporting agency that is then relayed to the furnisher before any duty of the furnisher is triggered under the FCRA.

The Court found that "Josey, however, lacks standing under § 1681s-2(b) because she did not plead in her complaint (or even in her opposition to the instant motion) that Sallie Mae received notification from a consumer reporting agency regarding the accuracy of information furnished by Sallie Mae, as required under the FCRA. See, e.g., Ostrander v. Unifund Corp., 2008 WL 850329 at *3-4 (“[T]he court finds that plaintiff has failed to allege facts to state a plausible claim for relief under FCRA § 1681s-2(b)” because plaintiff did not plead that defendant data furnisher “received notice of the disputed information from a consumer reporting agency.”); Prakash v. Homecomings Fin., 2006 WL 2570900 at *3, 4-5 (“[P]laintiff lacks standing to bring his claims under the Fair Credit Reporting Act” where “nowhere in the complaint or opposition to the instant motion does plaintiff allege that defendant [data furnisher] received notice of the dispute from a credit reporting agency.”).

Furthermore, although Josey alleges that she “sent several notices” and “made phone calls” to Sallie Mae demanding it provide “several copies of documents including the original promissory note, terms and conditions of agreement, payment history and invoices” ... such actions, even if interpreted to constitute receipt of notice of disputed credit information by Sallie Mae, do not establish standing under the FCRA. In order to establish a private right of action under § 1681s-2(b), Josey must allege, which she has not, that a consumer reporting agency notified Sallie Mae."

Josey never disputed the error directly to the credit bureau or, if she had taken this step, she failed to allege that she had taken this step. All it took was an allegation that she had disputed the alleged error to one or more of the credit bureaus (who then would have relayed the dispute to Sallie Mae) to trigger Sallie Mae's duty to perform a reasonable investigation of the dispute pursuant to 15 U.S.C. 1681s-2(b).

Once again, this bad result could have been avoided by some competent representation by an attorney. People, please, if you need representation, send me an e-mail. If you have a decent case, either I will take it or refer you to a consumer attorney in your state who can represent you. I pretty much know a good consumer lawyer in every state, even Hawaii (but not Alaska, at least not yet).