Prior to filing for bankruptcy, the Debtor incurred a student loan (ultimately held by Navient) to attend the Reformed Theological Seminary. The seminary was not a Title IV accredited institution.
The Debtor filed bankruptcy, listed this loan and received an order of discharge. Both Navient and Experian Information Solutions LLC. (“Experian”) received notice of the discharge order. Experian prepared the Debtor’s credit report and described the Navient Loan as “account charged off,” with an outstanding balance and a past due balance.
On April 29, 2019, the Debtor filed a Complaint against Experian in the District Court for the Southern District of New York alleging violations of the Fair Credit Reporting Act (“FCRA”) found at 15 U.S.C. § 1681 et seq and the New York Fair Credit Reporting Act (“NY FCRA”) which has similar provisions. The Debtor claimed that Experian negligently (Count I) and intentionally (Count II) violated 15 U.S.C. § 1681e(b) and the companion New York statutes (Counts III and IV).
15 U.S.C. § 1681e(b) states
Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.
The Complaint pled that Experian prepared Debtor’s credit report with an inaccuracy in that Debtor’s debt with Navient should have been reported as discharged in his bankruptcy. This is because the loan was for a non-Title IV school and therefore was not subject to the exceptions to discharge found at 11 U.S.C. § 523(a)(8)(B).
Experian filed a motion to dismiss. Experian first argued that the Complaint pled only a dispute about the legal effect of the discharge, not a factual inaccuracy. The Court disagreed.
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