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June 04, 2011

Horrible decision on s-2(b) claim

A bad decision was rendered recently, dismissing a consumer's claim against a furnisher who failed to perform a reasonable investigation of the consumer's dispute of the collection of a fraudulently opened account.

In Healey v. Trans Union, a decision rendered May 18, 2011, by the United States District Court for the Western District of Washington threw out a consumer's 15 U.S.C. 1681s-2(b) claim against a furnisher because the Court found that the furnisher's investigation, which was non-existent as best as I can tell, was sufficient.

Healey was the victim of identity theft.  The impostor opened an account with Sprint, which eventually resulted in the fraud Sprint account being sold to DRS, a collection agency.  Despite numerous disputes made by Healey to DRS regarding the fraudulent nature of the collection account, DRS continued to report the account to the credit bureaus for inclusion on Healey's credit reports.

Healey then disputed the DRS collection account to the credit bureaus, including Trans Union and Experian, pursuant to 15 U.S.C. 1681i.  Apparently, Healey did not possess evidence that Trans Union forwarded the 1681i dispute to Trans Union and thus could not establish that DRS's requirement to perform a reasonable investigation of the dispute pursuant to 15 U.S.C. 1681s-2(b) was ever triggered.  Thus, dismissal of the s-2(b) claim against DRS relating to the Trans Union dispute was proper.

However, the dismissal of the s-2(b) claim related to the Experian dispute is another matter.  There was proof that Experian complied with 1681i and forwarded the dispute to DRS.  However, the Court found that summary judgment was appropriate because there was no evidence regarding what exactly DRS did to investigate and it was Healey's duty to establish that DRS' investigation was not reasonable.  DRS obviously failed to include in its "investigation" a review of its own files regarding Healey's previous disputes.  As a result, it is clear that DRS did not perform even the most elementary investigation of Healey's dispute to Experian regarding the DRS collection.  However, the Court did not think so and, as a result, wrongly (in my opinion) granted summary judgment.

Unfortunately for Healey, it was a sad day for justice in the western district of Washington.

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