Stefan Ingram v. Experian Information Solutions ( 2023 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_________________
No. 21-2430
_________________
STEFAN INGRAM,
Appellant
v.
EXPERIAN INFORMATION SOLUTIONS, INC.;
EQUIFAX INFORMATION SERVICES, LLC;
WAYPOINT RESOURCE GROUP, LLC;
COMCAST CABLE COMMUNICATIONS, LLC
_________________
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(District Court No.: 2-18-cv-03776)
District Judge: Honorable Mitchell S. Goldberg
_________________
Argued March 22, 2023
Before RESTREPO, PHIPPS and ROTH, Circuit Judges
(October 2, 2023)
Cary L. Flitter [ARGUED]
Andrew M. Milz
Jody T. López-Jacobs
Flitter Milz
450 N Narberth Avenue, Suite 101
Narberth, PA 19072
Brent F. Vullings
Vullings Law Group, LLC
3953 Ridge Pike, Suite 102
Collegeville, PA 19426
Counsel for Appellants
Ryan Cooper [ARGUED]
Consumer Financial Protection Bureau
1700 G Street NW
Washington, DC 20552
Imad D. Abyad
Federal Trade Commission
600 Pennsylvania Avenue NW
Washington, DC 20580
Counsel for Amici Curiae in
support of Appellants
David P. Helwig [ARGUED]
Marks O’Neill O’Brien Doherty & Kelly
420 Fort Duquesne Boulevard
One Gateway Center, Suite 575
Pittsburgh, PA 15222
2
Cecil J. Jones
Cozen O’Connor
1650 Market Street
One Liberty Place, Suite 2800
Philadelphia, PA 19103
Counsel for Appellee
_________________
OPINION OF THE COURT
_________________
3
RESTREPO, Circuit Judge
Appellant Stefan Ingram was simply trying to clear his
credit report of an account that was falsely created in his name.
The Fair Credit Reporting Act (“FCRA”) provides consumers
two ways to accomplish this; the first is by filing a “direct”
dispute with the entity that furnished the consumer reporting
agency with the disputed information, referred to as “the
furnisher.” The second is by filing an “indirect” dispute with
the consumer reporting agency, which will then pass it to the
furnisher for further investigation. Ingram pursued his claim
through both avenues and, when these measures were
unsuccessful, through the courts. On summary judgment, the
District Court rejected Ingram’s claim that his indirect dispute
was inadequately investigated by the furnisher in this case,
after concluding that it had no duty to investigate because
Ingram did not provide enough documentation to inform a
“bona fide,” nonfrivolous dispute. R. at 15.
This appeal asks whether we may imply into the FCRA
an exception allowing a furnisher discretion to refuse to
investigate an indirect dispute it deems frivolous or irrelevant,
as the District Court did. We hold today that such an exception
is unsupported by the plain text of the statute; furnishers are
permitted to find that a direct dispute submitted by a consumer
is frivolous, and consumer reporting agencies may find that an
indirect dispute submitted by a consumer is frivolous, but the
FCRA provides no such discretion to furnishers that receive an
indirect dispute secondhand from a consumer reporting
agency. We will accordingly reverse the disposal of Ingram’s
action and remand for evaluation of whether Waypoint’s
investigation into Ingram’s indirect dispute was reasonable.
4
I. BACKGROUND
A. Factual Background
As we are evaluating the grant of a motion for summary
judgment, the following facts are viewed in the light most
favorable to Appellant Ingram as the nonmovant.
Stefan Ingram claims that he discovered a fraudulent
account had been opened in his name with Comcast Cable
Solutions (“Comcast”) after it was listed on his credit report.
He alleges that the account was opened without his
authorization, for service at a Philadelphia address where he
has never lived.
1. Ingram’s Direct Dispute
Ingram, through his counsel, filed a direct dispute with
Comcast requesting that Comcast investigate and report the
account to the consumer reporting agencies as disputed.
Comcast responded asking Ingram to provide several
documents, including proof of residence, a notarized fraud and
identity theft affidavit from the Federal Trade Commission, a
driver’s license, and a police or incident report. For various
reasons, Ingram did not follow up with the requested affidavit
and Comcast ultimately did not decide whether the account
was opened fraudulently. Comcast instead referred the
disputed account to Appellee Waypoint Resource Group, LLC
(“Waypoint”) for collection. Waypoint then reported the
delinquent account to consumer reporting agency Experian
Information Solutions (“Experian”).
5
2. Ingram’s Indirect Dispute &
Waypoint’s “Investigation”
After the Waypoint account appeared on Ingram’s
consumer report, Ingram challenged it again, this time by
means of an indirect dispute with Experian. On July 16, 2018,
in accordance with the FCRA’s requirements governing
indirect disputes passed from consumers to consumer reporting
agencies, Experian forwarded notice of Ingram’s dispute to the
entity that had originally provided it the information,
Waypoint, to investigate. The notice included Ingram’s
statement that “THIS IS NOT MY ACCOUNT. PLEASE
REMOVE FROM MY CREDIT.” R. at 208–09; 53–54.
Waypoint internally assigned the dispute to
“Administrative Wage Garnishment Analyst,” Samantha
Pelfrey, who updated Ingram’s address in Waypoint’s system
and confirmed the account name and social security number,
but did not further investigate the matter as to fraud. Ingram
contends, “based on Waypoint’s account notes and Pelfrey’s
testimony, [that] Pelfrey’s ‘investigation’ of Plaintiff’s dispute
lasted for thirteen (13) seconds.” R. at 218. Ingram charges
that this was inadequate under the FCRA. The result of the
investigation was that Waypoint continued to erroneously
report that the Comcast account tradeline was reflecting a
balance of $769.
On November 15, 2018, after this lawsuit commenced,
Waypoint received a second dispute from Experian, which
noted that the account in Ingram’s name was the subject of
litigation, that Ingram believed the account was fraudulent, and
6
that he had obtained a police report. 1 Ingram avers that,
according to Waypoint’s internal notes, it did not delete the
erroneous account until that date at the earliest.
Ingram alleges that as a result of Waypoint’s reporting
of the fraudulent Comcast account to Experian, his credit score
deteriorated and led him to be denied an apartment rental and
loan applications, and caused him great stress. His Amended
Complaint calls for damages stemming from “monetary losses
relating to credit denials, loss of use of funds, loss of credit and
loan opportunities, excessive and/or elevated interest rate and
finance charges,” as well as “great physical, emotional and
mental pain,” and finally, “financial and dignitary harm arising
from the injury to credit rating and reputation.” R. at 158.
B. Procedural History
On September 5, 2018, Ingram filed suit against
Defendants Waypoint, Experian, Comcast, and Equifax
Information Services, LLC (“Equifax”) in the Eastern District
of Pennsylvania, asserting claims under the FCRA and the Fair
Debt Collection Practices Act, among others. All Defendants
settled other than Waypoint.
On June 30, 2021, the District Court granted a motion
for summary judgment filed by Waypoint, which disposed of
all remaining claims. Ingram filed this timely appeal on July
30, 2021. Ingram elected to limit his appeal to the FCRA
count.
1
Ingram states that this dispute was not filed or initiated by
him.
7
II. ANALYSIS
A. Jurisdiction & Standard of Review
The District Court had subject matter jurisdiction under
28 U.S.C. § 1331 pursuant to the FCRA, 15 U.S.C. § 1681p,
and the Fair Debt Collection Practices Act, 15 U.S.C. §
1692k(d). We have appellate jurisdiction under 28 U.S.C. §
1291.
Questions of statutory interpretation are subject to de
novo review. Walsh v. Defs., Inc., 894 F.3d 583, 586 (3d Cir.
2018). Further, we exercise plenary review over the District
Court’s grant of summary judgment, “[d]rawing all reasonable
inferences in favor of the party against whom judgment is
sought,” and affirming a grant of summary judgment “only
when no issues of material fact exist and the party for whom
judgment is entered is entitled to judgment as a matter of law.”
Prusky v. Reliastar Life Ins. Co., 445 F.3d 695, 699 (3d Cir.
2006) (citing Fed. R. Civ. P. 56).
B. Consumer Credit Reporting Legal
Framework
For better or for worse, a strong credit score can be a
gateway to certain foundational aspects of modern American
life: employers look to credit reports of job applicants,
landlords use them to vet prospective renters, and they can be
determinative of one’s access to credit and the terms of that
access. 2 See S. Rep. No. 103-209, at 1–2 (1993). While it is
certainly true that “[t]hose who extend credit or insurance or
2
The term “credit report” is used throughout this opinion as
equivalent to a “consumer report.” 15 U.S.C. § 1681a(d).
8
who offer employment have a right to the facts they need to
make sound decisions,” the FCRA was drafted in recognition
that the potential for abuse and misinformation in the collection
and reporting process could harm consumers. S. Rep. No. 91-
517, at 2–3 (1969).
The FCRA as such created a regulatory framework
governing consumer credit reporting, in order “to protect
consumers from the transmission of inaccurate information
about them, and to establish credit reporting practices that
utilize accurate, relevant, and current information in a
confidential and responsible manner.” Seamans v. Temple
Univ., 744 F.3d 853, 860 (3d Cir. 2014) (quoting Cortez v.
Trans Union, LLC, 617 F.3d 688, 706 (3d Cir. 2010)); 15
U.S.C. § 1681 et seq. This Court has recognized that “any
interpretation of [the FCRA] must reflect” its “remedial”
purpose and “consumer oriented objectives,” which explicitly
include assisting consumers with correcting information
recorded in their credit files. Cortez, 617 F.3d at 706 (quoting
Guimond v. Trans Union Credit Info. Co., 45 F.3d 1329, 1333
(9th Cir. 1995)). Accordingly, among the various obligations
the FCRA imposes on entities involved in the credit reporting
process is the duty to investigate certain disputes submitted by
consumers. See Seamans, 744 F.3d at 864; 15 U.S.C. §§
1681s-2(a)(8); 1681i. In essence, the purpose of the FCRA is
clear: to help consumers like Ingram navigate the often opaque
and occasionally exasperating universe of credit reporting, and
seek redress where necessary. See generally S. Rep. No. 91-
517 (1969) (discussing the myriad issues faced by consumers
in understanding the information on their credit reports and
difficulties they may face in correcting errors when they arise).
The consumer credit reporting system involves two
primary parties: (1) consumer reporting agencies—like
9
Experian—which compile reports on consumers and make
them available to lenders, insurers, employers, landlords, and
other users, and (2) furnishers—like Waypoint—which
provide information about consumers to consumer reporting
agencies. The FCRA provides two discrete avenues for
consumers to challenge the accuracy or completeness of the
information in their credit reports through either of these
parties, respectively. 15 U.S.C. §§ 1681s-2(a)(8); 1681i. A
direct dispute is when a consumer provides notice of the
dispute to the person or entity that furnished the incorrect or
incomplete information, the furnisher. Id. § 1681s-2(a)(8).
Unless the furnisher finds as an initial matter that the dispute is
frivolous or irrelevant, it has a duty to investigate the matter
and take appropriate remedial action. Id. § 1681s-2(a)(8)(E)–
(F).
Meanwhile, indirect disputes—like the one at issue
here—are when a consumer instead disputes information with
the consumer reporting agency, which then must provide
notice of the dispute to the furnisher. Id. § 1681i(a)(2)(A).
Assuming the agency does not reasonably determine as a
threshold matter that the dispute is frivolous or irrelevant, the
agency must perform an investigation into the disputed
information and update or delete it as necessary. Id. §§
1681i(a)(3)(A); 1681i(a)(1)(A). Upon receipt of notice from
the consumer reporting agency, the furnisher must also
investigate the dispute and take appropriate action. Id. §
1681s-2(b)(1).
With a few narrow exceptions, the FCRA provides a
right of action to consumers against furnishers or consumer
reporting agencies who are either willful or negligent “in
failing to comply with any requirement imposed under [the
FCRA].” Id. §§ 1681o; 1681n. This can include the failure to
10
perform an adequate investigation where required.
SimmsParris v. Countrywide Fin. Corp., 652 F.3d 355, 358–
59 (3d Cir. 2011). 3
As discussed above, the FCRA allows entities first
receiving a dispute from the consumer—the furnisher in the
case of a direct dispute and the consumer reporting agency in
the case of an indirect dispute—the discretion to preliminarily
vet the dispute for frivolousness or irrelevance before
investigating. The issue in this case is whether, after a
consumer reporting agency refers an indirect dispute to the
furnisher, the furnisher as the secondary recipient can also
decide a dispute is frivolous or irrelevant and decline to
perform an investigation of its own. We hold today that the
furnisher does not have such discretion, and as such, Waypoint
had a duty to investigate Ingram’s indirect dispute when it
received notice thereof from Experian.
***
The instant appeal involves furnisher Waypoint’s duty
to investigate Ingram’s indirect, not his direct, dispute.
However, both avenues by which a consumer may request an
investigation into purportedly erroneous information on their
credit reports are relevant to our analysis and will be discussed
below.
3
Notably, the FCRA does not extend this cause of action to
consumers challenging a furnisher’s failure to investigate
under Section 1681s–2(a). 15 U.S.C. § 1681s–2(c).
11
1. Direct Disputes
Section 1681s-2(a)(8) of the FCRA governs the duties
of furnishers upon receipt of a direct dispute from a consumer.
15 U.S.C. § 1681s-2(a)(8). It states that within thirty (30) days
of receiving a notice of a direct dispute from a consumer, the
furnisher that provided the information in dispute to a
consumer reporting agency “shall” (1) investigate the disputed
information, (2) review all relevant information provided by
the consumer, and (3) complete the investigation and report the
results to the consumer. Id. §§ 1681s-2(a)(8)(E). If the
furnisher’s investigation finds that the information reported
was inaccurate, it must promptly notify each consumer
reporting agency to which the information was furnished. Id.
§ 1681s-2(a)(8)(E)(iv).
However, the FCRA’s provisions governing direct
disputes provide an explicit exception to these obligations if
the furnisher “reasonably determines that the dispute is
frivolous or irrelevant,” including because the consumer failed
“to provide sufficient information to investigate the disputed
information” or the dispute is “substantially the same” as a
dispute already investigated. Id. § 1681s-2(a)(8)(F)(i). If the
furnisher determines that the dispute is frivolous or irrelevant,
it must promptly notify the consumer, inform them of the
reason for the determination, and identify any additional
information necessary for it to investigate the disputed
information further. Id. § 1681s-2(a)(8)(F)(ii)–(iii).
2. Indirect Disputes
Meanwhile, Section 1681i of the FCRA governs the
duties of consumer reporting agencies upon receipt of an
indirect dispute from a consumer, like the one at issue here. Id.
12
§ 1681i. When a consumer notifies a consumer reporting
agency that they dispute the accuracy or completeness of the
information in their consumer file, the agency has two
principal obligations. First, within five (5) days of receiving
the dispute, the agency must provide notice of the dispute to
the furnisher that provided the disputed information. Id. §
1681i(a)(2)(A). The notice to the furnisher must include “all
relevant information regarding the dispute that the agency has
received from the consumer.” Id. Second, within thirty (30)
days of receiving the dispute, the agency “shall” conduct a
“reasonable” investigation to determine whether the disputed
information is inaccurate. Id. § 1681i(a)(1)(A). After
completing the investigation, the consumer reporting agency is
required, among other responsibilities, to delete any
information that could not be verified from the consumer’s file
and notify the consumer in writing of the results of the
investigation. Id. § 1681i(a)(5)(A), (6).
As with furnishers investigating direct disputes, the
FCRA explicitly allows a consumer reporting agency to
“terminate” its investigation into an indirect dispute “if the
agency reasonably determines that the dispute by the consumer
is frivolous or irrelevant, including by reason of a failure by a
consumer to provide sufficient information to investigate the
disputed information.” Id. § 1681i(a)(3)(A). If the agency
determines that a dispute is frivolous or irrelevant, it must
notify the consumer, provide the reasons for the determination,
and identify any information that is needed to investigate the
dispute. Id. § 1681i(a)(3)(B)–(C).
After receiving notice of an indirect dispute from a
consumer reporting agency, the furnisher has similar, though
not identical duties. Within the same timeframe in which the
consumer reporting agency must complete its investigation, id.
13
§ 1681s-2(b)(2), the furnisher “shall” also (1) investigate the
disputed information, (2) review all relevant information
provided by the consumer reporting agency, and (3) report the
results of the investigation to the consumer reporting agency,
id. § 1681s-2(b)(1). The furnisher’s investigation must be
“reasonable.” Seamans, 744 F.3d at 864. If the furnisher finds
the disputed information is incomplete or inaccurate, it must
notify all other consumer reporting agencies to which it
furnished the information, and modify, delete, or permanently
block reporting of such information going forward. See 15
U.S.C. § 1681s-2(b)(1)(E). 4
Here, in holding that Waypoint had no duty to
investigate Ingram’s indirect dispute because Ingram failed to
provide the additional information previously requested, the
District Court cited provisions governing a furnisher’s rights
and duties when treating a direct dispute in its analysis of how
furnisher Waypoint treated Ingram’s indirect dispute. This
was an error. Once Waypoint received Ingram’s indirect
dispute from Experian, it had a duty to perform a reasonable
investigation, regardless of (1) Ingram’s prior failures to
comply with requests for additional information, or (2) the fact
that Waypoint could have made such requests if it was
investigating a direct dispute. As such, there remains a
material question of fact as to the reasonableness of
Waypoint’s investigation under the FCRA. For the reasons
4
The furnisher’s duty to prevent further dissemination of
disputed information applies to not only inaccurate or
incomplete information, but also that which simply could not
be verified. 15 U.S.C. § 1681s-2(b)(1)(E).
14
stated below, we will accordingly reverse the grant of summary
judgment and remand for resolution of this factual dispute.
C. Application to Ingram’s Dispute
1. Waypoint’s Duty to Investigate
Ingram’s Indirect Dispute was Triggered
The District Court rejected Ingram’s claim that
Waypoint improperly investigated his indirect dispute because
Ingram did not submit “all supporting documentation or
information reasonably required to substantiate the basis of
[his] dispute.” R. at 15 (quoting 15 U.S.C. § 1681s-
2(a)(8)(d)(iii)). Therefore, Ingram had “not satisfied the
requirements” of a “bona fide dispute” under Section 1681s-
2(a)—the provision of the FCRA governing a furnisher’s
duties when treating direct disputes. Id. Again citing Section
1681s-2(a)(8), a provision titled “Ability of Consumer to
Dispute Information Directly With Furnisher,” it also
concluded that “because [Ingram] failed to provide sufficient
information upon which Waypoint could investigate,”
Ingram’s “request for an investigation may be deemed
frivolous.” Id. (citing 15 U.S.C. § 1681s-2(a)(8)(F)(i)(I)). The
District Court thus granted summary judgment to Waypoint
because Ingram failed to satisfy his “burden of coming forward
with evidence showing that he submitted a bona fide dispute,”
and therefore, Waypoint’s duty to investigate had never been
triggered in the first place. Id.
Ingram counters on appeal that 15 U.S.C. § 1681s-
2(b)(1), relating to “Duties of Furnishers of Information Upon
Notice of Dispute”—not Section 1681s-2(a)—governs his
indirect dispute. He points to language in Section 1681s-
2(b)(1) stating that once a furnisher like Waypoint receives
15
notice of an indirect dispute from a consumer reporting agency,
it “shall . . . conduct an investigation with respect to the
disputed information” and “review all relevant information
provided by the consumer reporting agency.” 5 15 U.S.C. §
1681s-2(b)(1)(A)–(B); see Appellant Br. at 18. He argues that
Waypoint’s duty to investigate was triggered when it received
his indirect dispute from Experian because the language above
is mandatory and contains no exceptions, and Waypoint
therefore lacked discretion to demand further information from
Ingram before taking action on his dispute. As such,
Waypoint’s duty to investigate Ingram’s dispute had been
triggered when it received notice of his indirect dispute from
Experian, leaving an open question of fact as to whether
5
Waypoint argues unpersuasively that Ingram has waived
this argument because he did not cite or address 15 U.S.C. §
1681s-2(a) or other authorities relied on in this appeal before
the District Court. First, a party need only preserve issues,
not cite or distinguish specific authorities. See United States
v. Abreu, 32 F.4th 271, 275 (3d Cir. 2022) (“preservation
requires advancement of the same legal principle, not citation
to the same legal precedent”). Ingram previously argued that
he submitted a proper indirect dispute under the FCRA, that
Waypoint’s investigation was unreasonable, and that he was
harmed as a result. This is enough to preserve his argument.
Even if that were not the case, this Court nonetheless retains
discretion to consider “pure question[s] of law” which are
“closely related” to arguments that the parties did raise and
for which “[n]o additional fact-finding is necessary,” like
those at issue here. Bagot v. Ashcroft, 398 F.3d 252, 256 (3d
Cir. 2005).
16
Waypoint’s 13-second peek at Ingram’s account was sufficient
under the FCRA.
We agree with Ingram. It is assumed that Congress
“expresses its intent through the ordinary meaning of its
language” and therefore our inquiry starts “with an
examination of the plain language of the statute.” Bonkowski
v. Oberg Indus., Inc., 787 F.3d 190, 200 (3d Cir. 2015)
(quoting Disabled in Action of Pa. v. Se. Pa. Transp. Auth., 539
F.3d 199, 210 (3d Cir. 2008)).
The FCRA is not ambiguous on this point. It expressly
states that if a consumer reporting agency “reasonably
determines that [an indirect] dispute . . . is frivolous or
irrelevant,” it is not required to continue with its investigation.
15 U.S.C. § 1681i(a)(3)(A). Similarly, when a furnisher
receives a direct dispute, the FCRA clearly provides that the
furnisher is not required to investigate so long as it “reasonably
determines that the dispute is frivolous or irrelevant.” Id. §
1681s-2(a)(8)(F)(i). The statute is structured such that, in these
parallel provisions, the party that first receives the dispute from
the consumer retains explicit discretion to discontinue its
investigation should the consumer’s dispute appear frivolous
or irrelevant. Meanwhile, Section 1681s-2(b), which governs
“duties of furnishers of information upon notice of a dispute”
from a consumer reporting agency, charges furnishers with a
duty to investigate indirect disputes forwarded to them by the
agencies, without providing for any similar exception.
Courts generally presume “that Congress acts
intentionally and purposely when it includes particular
language in one section of a statute but omits it in another.”
Intel Corp. Inv. Pol’y Comm. v. Sulyma, 140 S. Ct. 768, 777
(2020) (quoting BFP v. Resol. Tr. Corp., 511 U.S. 531, 537
17
(1994)). Further, “[w]hen Congress provides exceptions in a
statute, it does not follow that courts have authority to create
others. The proper inference . . . is that Congress considered
the issue of exceptions and, in the end, limited the statute to the
ones set forth.” United States v. Johnson, 529 U.S. 53, 58
(2000). Despite providing such exceptions elsewhere, the
FCRA provides no explicit exception for furnishers to decline
to investigate an indirect dispute that they receive from a
consumer reporting agency, and we will read the statute
accordingly.
The Sixth Circuit came to the same conclusion in
Boggio v. USAA Fed. Sav. Bank when it found that a
consumer’s failure to comply with a furnisher’s internal fraud
investigation policies did not justify the furnisher’s failure to
investigate the consumer’s indirect dispute. 696 F.3d 611, 619
(6th Cir. 2012). Similar to Waypoint here, the furnisher
alleged that its “standard procedures” required a consumer to
file a fraud affidavit or police report before it would conduct
further inquiry into a disputed claim. Id. However, the Court
concluded that “the text of § 1681s–2(b) does not permit
furnishers to require independent confirmation of materials
contained in a [consumer reporting agency] notice of a dispute
before conducting the required investigation.” Id. It reasoned
that a consumer’s failure to provide identity-theft information
“cannot obviate a furnisher’s § 1681s–2(b) duty; otherwise,
Congress would have indicated as much by including [such an
exception] within § 1681s–2(b) itself.” Id. at 619 n.6. The
Court as such concluded that summary judgment was
inappropriate on the consumer’s claim that the furnisher’s
investigation was unreasonable. Id. at 620.
Further, enforcing the FCRA according to its terms and
requiring a furnisher to investigate an indirect dispute
18
forwarded to it by a consumer reporting agency produces no
unreasonable results. Bonkowski, 787 F.3d at 200 (“When the
statute’s language is plain, the court’s obligation is to enforce
the statute according to its terms, at least where the disposition
is not absurd . . . .”). Furnishers may still protect themselves
from inane direct disputes by performing a preliminary review
for frivolousness. Further, the FCRA provides no cause of
action to consumers challenging a furnisher’s failure to
investigate under Section 1681s–2(a). 15 U.S.C. § 1681s–2(c);
Seamans, 744 F.3d at 864. As to indirect disputes, Congress
provided a “filtering mechanism” to protect furnishers from
overexposure through consumer suits under Section 1681s–
2(b) by setting up the consumer reporting agencies to receive
indirect disputes and “allowing [the agencies] to terminate
[their] investigation of disputed item if [they] ‘reasonably
determine[] that the dispute by the consumer is frivolous or
irrelevant.’” Nelson v. Chase Manhattan Mortg. Corp., 282
F.3d 1057, 1060 (9th Cir. 2002) (quoting 15 U.S.C. §
1681i(a)(3)). 6
6
We decline to opine on whether the FCRA can be read to
fully excuse the agency’s duty to notify the furnisher of an
indirect dispute it deems frivolous, as advanced by Amici.
Br. Amici Curiae Consumer Financial Protection Bureau and
Federal Trade Commission in Supp. of Pl.-Appellant and
Rev. at 24–26 (citing Boggio, 696 F.3d at 616). Section
1681i(a)(3)(A) states only that the agency’s duty to
investigate, as described in Section 1681i(a)(1), is abrogated
by a finding of frivolousness or irrelevance, but it makes no
explicit mention of how such a finding impacts the agency’s
duty to notify the furnisher discussed in Section 1681i(a)(2).
19
As a further clarification, the FCRA’s statutory history
puts any lingering questions to rest. Indeed, a glance at that
history only further supports that this structure was intended to
require that a furnisher receiving notice of an indirect dispute
investigate, suspicions of frivolity aside. Originally enacted in
1970, the FCRA was amended in 1996 to add a new section
describing the responsibilities of furnishers, in attempt to close
a “gap in the FCRA’s coverage,” that had previously allowed
furnishers to “irresponsibly” frustrate a consumer reporting
agency’s efforts to verify inaccurate information, while still
avoiding liability. S. Rep. No. 103–209, at 6 (1993); Consumer
Credit Reporting Reform Act of 1996, Pub. L. No. 104–208,
Subtitle D, ch. 1, § 2413, 110 Stat. 3009, 447–49 (1996)
(codified as amended at 15 U.S.C. § 1681s–2). It would make
little sense, considering this intended purpose of 15 U.S.C. §
1681s–2, to allow a furnisher to shirk its duty to act on an
indirect dispute to which it was referred by a consumer
reporting agency, in many cases after the agency has itself
determined that the dispute is not frivolous.
***
Waypoint raises two primary counterarguments on
appeal. First, it points to two decisions from district courts in
Pennsylvania which held that the furnisher’s ability to perform
a frivolousness review after receiving an indirect dispute is
implicit in the FCRA: Palouian v. FIA Card Servs., No. 13-
cv-293, 2013 WL 1827615, at *3 (E.D. Pa. May 1, 2013) and
Noel v. First Premier Bank, No. 12-cv-50, 2012 WL 832992,
Such a reading is neither clear from the plain text of the
statute, nor is it necessary to our disposition, which relates to
defining furnishers’ duties under the FCRA.
20
at *9 (M.D. Pa. Mar. 12, 2012). In both Palouian and Noel,
like here, plaintiffs filed both a direct dispute with the furnisher
and an indirect dispute with the consumer reporting agency,
but the court only relied on the FCRA provisions for direct
disputes in deciding that it was appropriate for the furnisher to
request further information from the consumer before
proceeding with its investigation. 2013 WL 1827615, at *3;
2012 WL 832992, at *9–10. This reading of the FCRA—
which was also endorsed by the District Court here—reasons
that if a consumer filing an indirect report fails to “provide[]
sufficient information to the [furnisher] to enable [it] to
investigate [the] dispute,” for example, by failing to reply to a
follow-up request for further information, there is no “bona
fide” dispute to begin with. Palouian, 2013 WL 1827615, at
*4. Lacking a dispute, the furnisher has no duty to investigate.
Id.We decline to endorse this reading of the indirect
dispute section of the statute. Not only does it atextually vest
threshold vetting power with the furnisher when the FCRA
explicitly grants the consumer reporting agency such power
over indirect disputes, but to the extent furnishers do have such
power, Congress only discussed it in provisions of the statute
governing direct, not indirect disputes. See Aristy-Rosa v. Att’y
Gen. United States, 994 F.3d 112, 115 (3d Cir. 2021) (refusing
to imply in one part of a statute what Congress expressly
provided for in another); cf. Gorman v. Wolpoff & Abramson,
LLP, 584 F.3d 1147, 1154 (9th Cir. 2009) (rejecting effort to
21
import furnisher’s duties upon receiving a direct dispute when
analyzing its duties when receiving an indirect dispute). 7
Further, courts regularly take into consideration if a
furnisher received minimal information regarding the indirect
dispute in determining the reasonableness of its investigation.
Seamans, 744 F.3d at 865 (“where a given notice contains only
scant or vague allegations of inaccuracy, a more limited
investigation may be warranted”); see also Gorman, 584 F.3d
at 1157; Chiang v. Verizon New England Inc., 595 F.3d 26, 38
(1st Cir. 2010); Westra v. Credit Control of Pinellas, 409 F.3d
825, 827 (7th Cir. 2005). “Indeed, as the statute recognizes,
the furnisher of credit information stands in a far better position
to make a thorough investigation of a disputed debt than the
[consumer reporting agency] does on []investigation,” as the
furnisher is the entity that supplied the disputed information in
the first place. Gorman, 584 F.3d at 1156. This suggests that
furnishers should not be absolved entirely from investigating
simply because additional information from the consumer
might yield a more robust investigatory result. See Boggio,
696 F.3d at 619 (“At issue is whether [the furnisher’s] actual
investigation was reasonable, and not whether it was
reasonable for [the furnisher] to have an optional, more
thorough review available to consumers.”).
7
The fact that here, unlike in Palouian and Noel, the party
that received the direct dispute here—Comcast—was
technically a different party than the one that received the
indirect dispute—Waypoint—does not affect our overall
conclusion as to the duties of the party that received the
indirect dispute.
22
Second, Waypoint contends that because Ingram first
filed a direct dispute with Comcast and then did not follow up
with the requested documentation, he should not be allowed to
cure this failure by “later invoking §1681s-2(b)(1)” and filing
an indirect dispute with Waypoint through Experian. Appellee
Br. at 4. Unfortunately for Waypoint, filing an indirect dispute
is not quite the “back door” for consumers that it suggests, as
the statute already provides for independent, first-line review
of an indirect dispute by the consumer reporting agency. 15
U.S.C. § 1681i(a)(3)(A). Under Section 1681i(a)(3)(A), the
agency is permitted to request additional information from the
consumer, where necessary, before completing its own
investigation—in the same way as a furnisher reviewing a
direct dispute. See id.; § 1681s–2(a)(8)(F)(i). As such, reading
the statute to allow furnishers to conduct what will often be a
second review for frivolousness would only serve to create an
additional hurdle for consumers filing indirect disputes when
compared to direct disputes. See Chiang, 595 F.3d at 37 (“it
would be inconsistent for plaintiffs to bear a weightier burden
in suits against a [consumer reporting agency] under § 1681i(a)
than in suits against furnishers under § 1681s–2(b)”). More
fundamentally, it would undercut a principal goal of the FCRA
by shielding furnishers from liability and making it more
difficult for consumers to dispute and correct inaccurate
information in their credit reports. See Cortez, 617 F.3d at 706(“any interpretation of [the FCRA] must reflect” its “remedial”
nature and “consumer oriented objectives,” which include
23
assisting consumers with correcting information recorded in
their credit files) (citation omitted). 8
For these reasons, we conclude that Waypoint indeed
had a duty to investigate Ingram’s indirect complaint,
regardless of Ingram’s purported failure to supplement his
dispute with additional information, or the fact that he had
previously submitted a direct dispute with Comcast that was
deemed frivolous.
8
There is other evidence baked into the FCRA of intent to
provide the consumer reporting agency sole discretion to find
an indirect dispute frivolous, request further information from
a consumer where necessary, and ultimately terminate the
investigation. In both situations where the FCRA does
provide discretion to determine the frivolousness of a claim
before investigating—in the case of a consumer reporting
agency for an indirect dispute and for a furnisher for a direct
dispute—it also mandates that the consumer be promptly
notified of the result of the investigation and the basis of this
determination. 15 U.S.C. §§ 1681i(a)(3)(B); 1681s–
2(a)(8)(F)(ii)–(iii). However, a furnisher that determines that
an indirect dispute forwarded to it for investigation is
frivolous would have no such obligation to provide notice to
the consumer under the statute. This is likely because in
drafting the FCRA, Congress presumably did not anticipate
providing furnishers such discretion. Yet Waypoint’s
interpretation of the FCRA would allow furnishers to deem a
dispute frivolous and take no further action without providing
notice to the consumer.
24
2. Ingram’s FCRA Claim Against
Waypoint Was Not Ripe for Summary
Judgment
A furnisher has a duty to conduct a “reasonable” post-
dispute investigation into a consumer’s complaint.
SimmsParris, 652 F.3d at 359. Whether a furnisher has
satisfied its obligation to conduct a reasonable investigation is
a fact-intensive question that requires “weighing ‘the cost of
verifying the accuracy of the information versus the possible
harm of reporting inaccurate information.’” Seamans, 744
F.3d at 865 (quoting Johnson v. MBNA Am. Bank, NA, 357
F.3d 426, 432–33 (4th Cir. 2004)).
The District Court also acknowledged that “genuine
issues of material fact would likely preclude summary
judgment” on Waypoint’s argument that its “investigation . . .
when considered in light of the scant information provided,
was reasonable.” R. at 16 n.3. That is because “whether a
furnisher’s post-dispute investigation was reasonable is
‘normally a question for trial.’” Id. (quoting Seamans, 744
F.3d at 864–65). Consequently, because we conclude today
that furnisher Waypoint had a duty to conduct a reasonable
investigation of the indirect dispute and was not permitted to
reject the dispute as frivolous before investigating, it follows
that the reasonableness of any investigation Waypoint
conducted was not a question ripe for summary judgment in
this instance.
25
III. CONCLUSION
We will accordingly reverse the District Court’s grant
of summary judgment to Appellee Waypoint and remand for
evaluation of the reasonableness of Waypoint’s investigation
into Ingram’s indirect dispute under the FCRA.
26