ATLANTA – The U.S. Court of Appeals for the 11th Circuit has affirmed a lower court’s dismissal of a case against credit-reporting agencies.
Plaintiff Kathleen Pedro has accused TransUnion and Equifax of willfully violating the Fair Credit Reporting Act (FCRA) after the companies listed on her credit report a credit card account for which she was an authorized user and not liable for the payments. Pedro removed Equifax from her appeal, so it concerns only her complaint against TransUnion.
In a decision filed Aug. 24, the appellate court affirmed a district court’s dismissal for Pedro’s failure to allege a plausible claim for relief.
Pedro had been added as an authorized user to her parents’ credit card account, and when they died in 2014, the account went into default. Upon discovering that her credit score had dropped dramatically, Pedro had Capital One remove her from the account, but TransUnion and Equifax did not remove the account from her credit report until Capital One eventually made the request.
As a result of the issues, Pedro filed a complaint against the two agencies, alleging that they “had willfully violated the Fair Credit Reporting Act … by failing to ‘follow reasonable procedures to assure maximum possible accuracy’ of the credit reports of authorized users of credit card accounts,” according to the appellate court’s decision, penned by Judge William Pryor. In response, the companies filed a motion to dismiss the complaint, arguing that the plaintiff would not be able to show that the act had been willfully violated.
The agencies argued that they had followed an objectively reasonable interpretation of the Act, an argument with which the appellate court concurred. According to Pryor’s decision, “TransUnion adopted an interpretation of the Act that was objectively reasonable. TransUnion could have reasonably interpreted the Act to permit it to report that Pedro was an authorized user on her parents’ credit card account because it could have understood the standard of ‘maximum possible accuracy,’ to require only that TransUnion report information that is technically accurate.”
Pryor conceded that an interpretation of the act that calls for information to be both accurate and not misleading would be better, but as TransUnion’s reading was objectively reasonable, it cannot be found to have willfully violated the FCRA.