Drew v. Equifax

Summarized by:

  • Court: 9th Circuit Court of Appeals Archives
  • Area(s) of Law: Civil Law
  • Date Filed: 08-07-2012
  • Case #: 11-15008
  • Judge(s)/Court Below: Circuit Judge McKeown for the Court; Circuit Judge N. Smith and District Judge Benitez
  • Full Text Opinion

A credit reporting agency’s notification of a fraudulent account triggers the creditor’s duty under the Fair Credit Reporting Act to investigate and react to the fraudulent account, even if the notification does not specifically state that the creditor is required to act.

While receiving cancer treatment in a Seattle hospital, Eric Drew’s identity was stolen by a staff member. The staff member opened multiple fraudulent credit accounts in Drew’s name and defaulted on them. Chase Bank (“Chase”) held one fraudulent account, which was frozen and listed as “lost or stolen” after Drew reported it as being fraudulent. Drew’s interaction with Chase did not result in Chase owing him a duty until they received formal notification from a credit reporting agency. Transunion, a credit reporting agency, later notified Chase that the account was fraudulent. Chase claimed that the letter from Transunion did not trigger action by Chase under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681. However, the statute is not explicit as to what information must be included in such a notification, and the Court found Transunion’s letter to be sufficient to trigger action on the part of Chase. If a notification letter is sufficient to trigger action from a creditor, the creditor must follow the guidelines listed in § 1681s-2(b)(1). The district court granted Chase’s motion for summary judgment, but the Court found that issues of material fact existed as to Chase misreporting the account as belonging to Drew and Drew’s address being listed as that of the thief. The Court upheld the grant of summary judgement as to the claim that Chase failed to conduct a proper investigation following the receipt of notification from Transunion. Chase performed an investigation before receiving said notification and the outcome of the initial investigation was not disputed. AFFIRMED in part; REVERSED in part.

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