`
`Case: 21-2430 Document: 30 Page: 1 Date Filed: 09/13/2022
`
`No. 21-2430
`
`IN THE UNITED STATES COURT OF APPEALS
`FOR THE THIRD CIRCUIT
`
`Stefan Ingram,
`Plaintiff-Appellant,
`
`
`
`v.
`Waypoint Resource Group, LLC,
`Defendant-Appellee.
`
`On Appeal from the United States District Court
`for the Eastern District of Pennsylvania
`Hon. Mitchell S. Goldberg
`Case No. 2:18-cv-3776
`
`
`
`Brief of Amici Curiae
`Consumer Financial Protection Bureau
`and Federal Trade Commission
`in Support of Plaintiff-Appellant and Reversal
`
`
`Anisha S. Dasgupta
`General Counsel
`Joel Marcus
`Deputy General Counsel
`Imad D. Abyad
`Attorney
`FEDERAL TRADE COMMISSION
`600 Pennsylvania Avenue NW
`Washington, DC 20580
`(202) 326-3579
`iabyad@ftc.gov
`
`Seth Frotman
`General Counsel
`Steven Y. Bressler
`Acting Deputy General Counsel
`Laura Hussain
`Assistant General Counsel
`Ryan Cooper
`Senior Counsel
`CONSUMER FINANCIAL
`PROTECTION BUREAU
`1700 G Street NW
`Washington, DC 20552
`(202) 702-7541
`ryan.cooper@cfpb.gov
`
`
`
`
`

`

`Case: 21-2430 Document: 30 Page: 2 Date Filed: 09/13/2022
`
`TABLE OF CONTENTS
`
`TABLE OF CONTENTS .......................................................................... i
`
`TABLE OF AUTHORITIES ................................................................... ii
`
`INTEREST OF AMICI CURIAE ............................................................. 1
`
`STATEMENT ......................................................................................... 3
`
`A. Consumer Credit Reporting ....................................................... 3
`
`B. The FCRA ................................................................................... 5
`
`1. Direct Disputes ....................................................................... 7
`
`2.
`
`Indirect Disputes .................................................................... 8
`
`C. Facts ......................................................................................... 10
`
`D. Procedural History .................................................................... 12
`
`SUMMARY OF ARGUMENT ...............................................................14
`
`ARGUMENT .........................................................................................16
`
`I. When a consumer reporting agency forwards a dispute to a
`furnisher, the furnisher is required to conduct an
`investigation. .................................................................................16
`
`A. The statutory text is unambiguous. ...........................................16
`
`B.
`
`If Congress intended to create an exception for frivolous
`disputes, it would have said so. ................................................ 18
`
`II. Consumers are entitled to notice of the outcome of their
`disputes and an opportunity to cure. ............................................. 21
`
`III. The FCRA already protects furnishers from frivolous
`disputes. ........................................................................................ 24
`
`CONCLUSION ..................................................................................... 28
`
`
`
`
`

`

`Case: 21-2430 Document: 30 Page: 3 Date Filed: 09/13/2022
`
`TABLE OF AUTHORITIES
`
`Cases
`
`Page(s)
`
`Argueta-Orellana v. Att’y Gen. United States,
`35 F.4th 144 (3d Cir. 2022) ..................................................................... 24
`
`Aristy-Rosa v. Att’y Gen. United States,
`994 F.3d 112 (3d Cir. 2021) ..................................................................... 19
`
`BFP v. Resol. Tr. Corp.,
`511 U.S. 531 (1994) ................................................................................... 19
`
`Boggio v. USAA Fed. Sav. Bank,
`696 F.3d 611 (6th Cir. 2012) .................................................................... 26
`
`Chiang v. MBNA,
`620 F.3d 30 (1st Cir. 2010) ...................................................................... 25
`
`Consumer Product Safety Comm’n v. GTE Sylvania, Inc.,
`447 U.S. 102 (1980) .................................................................................. 17
`
`Cortez v. Trans Union, LLC,
`617 F.3d 688 (3d Cir. 2010) ................................................................. 6, 24
`
`Gov’t of Virgin Islands v. Knight,
`989 F.2d 619 (3d Cir. 1993) ...................................................................... 17
`
`Hartford Underwriters Ins. Co. v. Union Planters Bank, N.A.,
`530 U.S. 1 (2000) .................................................................................... 18
`
`In re Am. Pad & Paper Co.,
`478 F.3d 546 (3d Cir. 2007) .................................................................... 18
`
`Ingram v. Experian Info. Sols., Inc.,
`No. 18-cv-3776, 2021 WL 2681275 (E.D. Pa. June 30, 2021) .......... passim
`
`Intel Corp. Inv. Pol’y Comm. v. Sulyma,
`140 S. Ct. 768 (2020) ............................................................................... 18
`
`Johnson v. MBNA Am. Bank, NA,
`357 F.3d 426 (4th Cir. 2004) ................................................................... 27
`
`ii
`
`

`

`Case: 21-2430 Document: 30 Page: 4 Date Filed: 09/13/2022
`
`Lexecon Inc. v. Milberg Weiss Bershad Hynes & Lerach,
`523 U.S. 26 (1998) .................................................................................... 17
`
`Nelson v. Chase Manhattan Mortg. Corp.,
` 282 F.3d 1057 (9th Cir. 2002) ........................................................... 26, 27
`
`Noel v. First Premier Bank,
`No. 3:12-cv-50, 2012 WL 832992 (M.D. Pa. Mar. 12, 2012) ................... 20
`
`Palouian v. FIA Card Servs.,
`No. 13-cv-0293, 2013 WL 1827615 (E.D. Pa. May 1, 2013) ..................... 20
`
`Pennsylvania Dep’t of Pub. Welfare v. Davenport,
`495 U.S. 552 (1990) .................................................................................. 17
`
`Russello v. United States,
`464 U.S. 16 (1983) ................................................................................... 19
`
`SAS Inst., Inc. v. Iancu,
`138 S. Ct. 1348 (2018) ............................................................................... 17
`
`Scott v. First S. Nat’l Bank,
` 936 F.3d 509 (6th Cir. 2019) ............................................................. 25, 26
`
`Seamans v. Temple Univ.,
`744 F.3d 853 (3d Cir. 2014) ........................................................... 6, 27, 28
`
`SimmsParris v. Countrywide Fin. Corp.,
`652 F.3d 355 (3d Cir. 2011) ............................................................... 25, 27
`
`United States v. Gonzales,
`520 U.S. 1 (1997) ....................................................................................... 17
`
`United States v. Johnson,
`529 U.S. 53 (2000) .................................................................................. 21
`
`Statutes
`
`15 U.S.C. § 1681 ..........................................................................................1, 6
`
`15 U.S.C. § 1681a(d) ....................................................................................... 3
`
`15 U.S.C. § 1681i(a)(1)(A) .............................................................................. 8
`
`iii
`
`

`

`Case: 21-2430 Document: 30 Page: 5 Date Filed: 09/13/2022
`
`15 U.S.C. § 1681i(a)(2)(A) ........................................................................ 8, 25
`
`15 U.S.C. § 1681i(a)(3)(A) ............................................................. 9, 18, 21, 25
`
`15 U.S.C. § 1681i(a)(3)(B)-(C) ................................................................. 9, 25
`
`15 U.S.C. § 1681i(a)(3)(C) ...................................................................... 21, 22
`
`15 U.S.C. § 1681i(a)(5)(A) .............................................................................. 8
`
`15 U.S.C. § 1681i(a)(6) ................................................................................... 8
`
`15 U.S.C. § 1681i(a)(6)(A) ............................................................................ 22
`
`15 U.S.C. § 1681i(a)(6)(B) ............................................................................ 22
`
`15 U.S.C. § 1681s(a)(1) ................................................................................... 2
`
`15 U.S.C. § 1681s(a)-(c) ................................................................................. 1
`
`15 U.S.C. § 1681s(e) ....................................................................................... 1
`
`15 U.S.C. § 1681s-2(a)(8)(D)(iii) ................................................................. 13
`
`15 U.S.C. § 1681s-2(a)(8)(E)(i)-(iv) ............................................................... 7
`
`15 U.S.C. § 1681s-2(a)(8)(E)(iii) .................................................................. 22
`
`15 U.S.C. § 1681s-2(a)(8)(F)(i) .......................................................... 7, 18, 20
`
`15 U.S.C. § 1681s-2(a)(8)(F)(i)(I) ................................................................ 13
`
`15 U.S.C. § 1681s-2(a)(8)(F)(ii) ................................................................... 22
`
`15 U.S.C. § 1681s-2(a)(8)(F)(ii)-(iii) .............................................................. 8
`
`15 U.S.C. § 1681s-2(a)(8)(F)(iii) .................................................................. 22
`
`15 U.S.C. § 1681s-2(b)(1)(A) ......................................................................... 17
`
`15 U.S.C. § 1681s-2(b)(1)(A)-(E) .................................................................. 10
`
`15 U.S.C. § 1681s-2(b)(1)(C) ........................................................................ 22
`
`15 U.S.C. § 45(a) ............................................................................................ 1
`
`iv
`
`

`

`Case: 21-2430 Document: 30 Page: 6 Date Filed: 09/13/2022
`
`Regulations
`
`12 C.F.R. § 1022.43(e)(1)-(4) ......................................................................... 7
`
`12 C.F.R. § 1022.43(f)(1)................................................................................ 7
`
`12 C.F.R. § 1022.43(f)(2)-(3) ......................................................................... 8
`
`Other Authorities
`
`CFPB, Annual report of credit and consumer reporting complaints
` (Jan. 2022), https://files.consumerfinance.gov/f/documents/cfpb_fcra-
`611-e_report_2022-01.pdf .................................................................... 3, 4
`
`CFPB, Consumer Response Annual Report (Mar. 2022),
`https://files.consumerfinance.gov/f/documents/cfpb_2021-consumer-
`response-annual-report_2022-03.pdf ...................................................... 5
`
`CFPB, Key Dimensions and Processes in the U.S. Credit Reporting System:
`A Review of How the Nation’s Largest Credit Bureau’s Manage
`Consumer Data (Dec. 2012),
`https://files.consumerfinance.gov/f/201212_cfpb_credit-reporting-
`white-paper.pdf ........................................................................................ 11
`
`CFPB, Supervisory Highlights Consumer Reporting Special Edition
` (Dec. 2019),
`https://files.consumerfinance.gov/f/documents/cfpb_supervisory-
`highlights_issue-20_122019.pdf ............................................................... 6
`
`FTC, Report to Congress Under Section 319 of the Fair and Accurate
`Credit Transactions Act of 2003 (Jan. 2015),
`https://www.ftc.gov/system/files/documents/reports/section-319-fair-
`accurate-credit-transactions-act-2003-sixth-interim-final-report-federal-
`trade/150121factareport.pdf ...................................................................... 4
`
`Liane Fiano, CFPB, Common errors people find on their credit report—and
`how to get them fixed (Feb. 5, 2019),
`https://www.consumerfinance.gov/about-us/blog/common-errors-
`credit-report-and-how-get-them-fixed/ .................................................... 4
`
`
`
`v
`
`

`

`Case: 21-2430 Document: 30 Page: 7 Date Filed: 09/13/2022
`
`Syed Ejaz, Consumer Reports, A Broken System: How the Credit
`Reporting System Fails Consumers and What to Do About It 4 (June 10,
`2021), https://advocacy.consumerreports.org/wp-
`content/uploads/2021/06/A-Broken-System-How-the-Credit-Reporting-
`System-Fails-Consumers-and-What-to-Do-About-It.pdf ......................... 4
`
`vi
`
`

`

`Case: 21-2430 Document: 30 Page: 8 Date Filed: 09/13/2022
`
`INTEREST OF AMICI CURIAE
`
`To ensure fair and accurate credit reporting, the Fair Credit
`
`Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., imposes various
`
`requirements that consumer reporting agencies and the companies that
`
`provide those agencies information about consumers, known as furnishers,
`
`must follow. As relevant here, under Section 1681s-2(b) of the FCRA, when
`
`a consumer disputes information in her credit report with a consumer
`
`reporting agency and the agency forwards the dispute to the furnisher, the
`
`furnisher is required to conduct an investigation.
`
`The Consumer Financial Protection Bureau (Bureau or CFPB) has
`
`exclusive rule-writing authority for most provisions of the FCRA. 15 U.S.C.
`
`§ 1681s(e). The Bureau interprets and, along with various other federal and
`
`state regulators, enforces the law’s requirements. Id. § 1681s(a)-(c). These
`
`include the provision in Section 1681s-2(b) that furnishers must investigate
`
`disputes forwarded by consumer reporting agencies, which are known as
`
`“indirect disputes.”
`
`The Federal Trade Commission (FTC) has been charged by Congress
`
`with protecting consumers from deceptive or unfair trade practices. Id.
`
`§ 45(a). As part of that mission, the Commission has long played a key role
`
`in the implementation, enforcement, and interpretation of the FCRA. A
`
`1
`
`

`

`Case: 21-2430 Document: 30 Page: 9 Date Filed: 09/13/2022
`
`violation of the FCRA “constitute[s] an unfair or deceptive act or practice in
`
`commerce, in violation of section 5(a) of the Federal Trade Commission
`
`Act.” Id. § 1681s(a)(1). And the FCRA grants the Commission “such
`
`procedural, investigative, and enforcement powers … as though the
`
`applicable terms and conditions of the Federal Trade Commission Act were
`
`part of [the FCRA].” Id.
`
`The district court erred when it read an exception into Section 1681s-
`
`2(b)’s requirement that furnishers investigate indirect disputes. It held that
`
`a furnisher is obligated to investigate only “bona fide” indirect disputes and
`
`may therefore decline to investigate any indirect dispute it deems frivolous.
`
`This atextual, judge-made exception to the plain language of the FCRA
`
`would have the effect of denying consumers an investigation to which they
`
`are legally entitled as well as notice of the result of that investigation. This
`
`outcome would undercut a central remedial purpose of the FCRA, which is
`
`to ensure that consumers are able to dispute and correct inaccurate
`
`information in their credit reports. A likely consequence would be an
`
`increase in the volume of consumer complaints related to credit reporting
`
`that the Bureau receives and is required to address. For all these reasons,
`
`the Bureau and the FTC have a substantial interest in the issues presented
`
`in this case.
`
`2
`
`

`

`Case: 21-2430 Document: 30 Page: 10 Date Filed: 09/13/2022
`
`STATEMENT
`A. Consumer Credit Reporting
`Consumer credit reporting plays an important role in the lives of
`
`American consumers. The consumer credit reporting system includes:
`
`(1) consumer reporting agencies, which compile reports on consumers and
`
`make them available to lenders, insurers, employers, landlords, and other
`
`users, and (2) furnishers, which provide information about consumers to
`
`consumer reporting agencies. See CFPB, Annual report of credit and
`
`consumer reporting complaints 5 (Jan. 2022),
`
`https://files.consumerfinance.gov/f/documents/cfpb_fcra-611-
`
`e_report_2022-01.pdf. The three largest consumer reporting agencies are
`
`Equifax, Experian, and TransUnion. Id. These companies maintain files on
`
`over 200 million Americans. Id. More than 15,000 furnishers provide these
`
`companies information about consumers. Id. at 5–6.
`
`The reports compiled by these companies are used to make decisions
`
`that affect every facet of consumers’ lives. Lenders use credit reports, also
`
`referred to as consumer reports,1 when determining whether to extend
`
`credit and on what terms. Id. at 5. Landlords use these reports when
`
`
`1 The term “credit report” is used throughout this brief to have the same
`meaning as the term “consumer report” as defined at 15 U.S.C. § 1681a(d).
`
`3
`
`

`

`Case: 21-2430 Document: 30 Page: 11 Date Filed: 09/13/2022
`
`deciding whether to rent housing to tenants. Id. And, employers use these
`
`reports to determine whether a job applicant should be hired. Id. Given
`
`how important these decisions are to consumers, it is critical that the
`
`information contained in credit reports be correct and that consumers can
`
`identify and dispute any inaccuracies.
`
`However, credit reports frequently contain errors. By one estimate,
`
`one in five Americans has a verified error on at least one credit report. See
`
`FTC, Report to Congress Under Section 319 of the Fair and Accurate
`
`Credit Transactions Act of 2003 i-ii (Jan. 2015),
`
`https://www.ftc.gov/system/files/documents/reports/section-319-fair-
`
`accurate-credit-transactions-act-2003-sixth-interim-final-report-federal-
`
`trade/150121factareport.pdf; see also Liane Fiano, CFPB, Common errors
`
`people find on their credit report—and how to get them fixed (Feb. 5,
`
`2019), https://www.consumerfinance.gov/about-us/blog/common-errors-
`
`credit-report-and-how-get-them-fixed/. Another study found that over 34%
`
`of consumers were able to identify at least one error in their credit reports.
`
`See Syed Ejaz, Consumer Reports, A Broken System: How the Credit
`
`Reporting System Fails Consumers and What to Do About It 4 (June 10,
`
`2021), https://advocacy.consumerreports.org/wp-
`
`4
`
`

`

`Case: 21-2430 Document: 30 Page: 12 Date Filed: 09/13/2022
`
`content/uploads/2021/06/A-Broken-System-How-the-Credit-Reporting-
`
`System-Fails-Consumers-and-What-to-Do-About-It.pdf.
`
`Given this error rate, it is unsurprising that consumers frequently
`
`complain about the consumer credit reporting system. The CFPB receives
`
`hundreds of thousands of complaints about the consumer credit reporting
`
`industry every year. See CFPB, Consumer Response Annual Report 11
`
`(Mar. 2022), https://files.consumerfinance.gov/f/documents/cfpb_2021-
`
`consumer-response-annual-report_2022-03.pdf. In 2021, over 70% of the
`
`complaints consumers submitted to the CFPB related to credit reporting.
`
`Id. That year, consumers submitted over 700,000 complaints to the CFPB
`
`related to credit reporting, more than every other industry combined. Id.
`
`The number of complaints the Bureau receives related to credit reporting is
`
`also dramatically increasing. The 700,000 credit-reporting complaints
`
`submitted to the Bureau in 2021 reflected a 122% increase over the previous
`
`year. Id.
`
`B. The FCRA
`The FCRA, 15 U.S.C. § 1681 et seq., enacted in 1970, created a
`
`regulatory framework governing consumer credit reporting. The statute
`
`“was crafted to protect consumers from the transmission of inaccurate
`
`information about them, and to establish credit reporting practices that
`
`5
`
`

`

`Case: 21-2430 Document: 30 Page: 13 Date Filed: 09/13/2022
`
`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)). Consumer reporting agencies “collect consumer credit data from
`
`‘furnishers,’ such as banks and other lenders, and organize that material
`
`into individualized credit reports, which are used by commercial entities to
`
`assess a particular consumer’s creditworthiness.” Id. The “FCRA imposes a
`
`variety of obligations on both furnishers and [consumer reporting
`
`agencies],” id., including the obligation, under certain circumstances, to
`
`investigate disputes submitted by consumers.
`
`The FCRA provides two avenues through which consumers can
`
`dispute the accuracy or completeness of the information in their credit
`
`reports. First, a consumer may provide notice of the dispute to the person
`
`or entity that furnished the incorrect or incomplete information to the
`
`consumer reporting agency. This is known as a “direct dispute.” See CFPB,
`
`Supervisory Highlights Consumer Reporting Special Edition 4 (Dec.
`
`2019), https://files.consumerfinance.gov/f/documents/cfpb_supervisory-
`
`highlights_issue-20_122019.pdf. Second, the consumer may provide notice
`
`of the dispute to the consumer reporting agency. This is known as an
`
`“indirect dispute.” Id.
`
`6
`
`

`

`Case: 21-2430 Document: 30 Page: 14 Date Filed: 09/13/2022
`
`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. After receiving notice
`
`that a consumer disputes the accuracy of the information a furnisher
`
`provided to a consumer reporting agency, the furnisher is required to: (1)
`
`investigate the disputed information, (2) review all relevant information
`
`provided by the consumer, (3) complete the investigation and report the
`
`results to the consumer, generally within thirty days, and (4) if the
`
`investigation finds that the information reported was inaccurate, promptly
`
`notify each consumer reporting agency to which the information was
`
`furnished. 15 U.S.C. § 1681s-2(a)(8)(E)(i)-(iv); see also 12 C.F.R. §
`
`1022.43(e)(1)-(4).
`
`However, the furnisher is not required to satisfy these obligations if it
`
`“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. 15 U.S.C. § 1681s-2(a)(8)(F)(i); see
`
`also 12 C.F.R. § 1022.43(f)(1). If the furnisher determines that the dispute is
`
`frivolous or irrelevant, it must promptly notify the consumer and the notice
`
`must include the reason for the determination and identify any additional
`
`7
`
`

`

`Case: 21-2430 Document: 30 Page: 15 Date Filed: 09/13/2022
`
`information necessary to investigate the disputed information. 15 U.S.C.
`
`§ 1681s-2(a)(8)(F)(ii)-(iii); see also 12 C.F.R. § 1022.43(f)(2)-(3).
`
`2. Indirect Disputes
`Section 1681i of the FCRA governs the duties of consumer reporting
`
`agencies upon receipt of an indirect dispute from a consumer. When a
`
`consumer notifies a consumer reporting agency that she disputes the
`
`accuracy or completeness of the information in her consumer file, the
`
`agency has two principal obligations. First, the agency is required to
`
`provide notice of the dispute to the furnisher that provided the disputed
`
`information within five days of receiving the dispute. 15 U.S.C.
`
`§ 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, the agency must “conduct a reasonable
`
`reinvestigation to determine whether the disputed information is
`
`inaccurate.” Id. § 1681i(a)(1)(A). The investigation generally must be
`
`complete within thirty days, id., and, upon its completion, the consumer
`
`reporting agency is required, among other responsibilities, to delete any
`
`information that could not be verified from the consumer’s file, id.
`
`§ 1681i(a)(5)(A), and notify the consumer in writing of the results of the
`
`investigation, id. § 1681i(a)(6).
`
`8
`
`

`

`Case: 21-2430 Document: 30 Page: 16 Date Filed: 09/13/2022
`
`However, the consumer reporting agency is not required to satisfy
`
`either of these obligations “if the agency reasonably determines that the
`
`dispute by the consumer is frivolous or irrelevant, including by a 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 and provide
`
`the reasons for the determination and identify any information that is
`
`needed to investigate the dispute. Id. § 1681i(a)(3)(B)-(C).
`
`Section 1681s-2(b) of the FCRA governs the duties of furnishers upon
`
`receipt of notice of an indirect dispute from a consumer reporting agency.
`
`After receiving notice pursuant to Section 1681i that a consumer has
`
`disputed the completeness or accuracy of information that a furnisher
`
`provided to a consumer reporting agency, the furnisher is required to:
`
`(1) investigate the disputed information, (2) review all relevant information
`
`provided by the consumer reporting agency, (3) report the results of the
`
`investigation to the consumer reporting agency, (4) if the investigation
`
`finds the disputed information is incomplete or inaccurate, notify all other
`
`consumer reporting agencies that were furnished the information, and
`
`(5) modify, delete, or permanently block reporting of any disputed
`
`9
`
`

`

`Case: 21-2430 Document: 30 Page: 17 Date Filed: 09/13/2022
`
`information that is found to be inaccurate, incomplete, or that cannot be
`
`verified. Id. § 1681s-2(b)(1)(A)-(E).
`
`C. Facts
`Stefan Ingram, the Plaintiff and Appellant in this case, believes he
`
`was the victim of identity theft.2 He alleges that a Comcast account was
`
`opened in his name, without his authorization, for service at a Philadelphia
`
`address where he has never lived. According to Ingram, he first learned of
`
`the account when he noticed it was listed as delinquent on his credit report.
`
`After learning of the account, Ingram filed a direct dispute with
`
`Comcast. On October 19, 2017, his lawyer sent a letter to Comcast advising
`
`the company that the account in Ingram’s name was fraudulent. The letter
`
`requested that Comcast investigate the account’s authenticity and report to
`
`the consumer reporting agencies that the account was disputed. Comcast
`
`responded and requested additional documentation including an affidavit
`
`and a police report. Ingram never submitted the requested documents, and
`
`Comcast ultimately did not find that the account was opened due to fraud.
`
`Comcast subsequently referred the delinquent account to Waypoint
`
`
`2 The description of the facts provided here is based on the district court’s
`account of those facts in its summary judgment order. See Ingram v.
`Experian Info. Sols., Inc., No. 18-cv-3776, 2021 WL 2681275, at *1–6 (E.D.
`Pa. June 30, 2021).
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`Case: 21-2430 Document: 30 Page: 18 Date Filed: 09/13/2022
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`Resource Group LLC (“Waypoint”), the Defendant and Appellee in this
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`case, for collections.
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`Next, Ingram filed an indirect dispute with Experian. After noticing
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`that the allegedly fraudulent account remained on his credit report, Ingram
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`had his lawyer dispute the account using Experian’s website. The indirect
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`dispute was submitted to Experian on June 29, 2018. The dispute stated,
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`“THIS IS NOT MY ACCOUNT. PLEASE REMOVE THIS FROM MY
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`CREDIT.” On July 16, 2018, Waypoint received the dispute from Experian.
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`In response, Waypoint updated Ingram’s address in its system and
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`confirmed that the account had his correct name and Social Security
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`number. Because the dispute did not include the code for fraud, Waypoint
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`did not take any additional steps to verify the authenticity of the account.3
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`However, Waypoint’s system did automatically mark the account with the
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`code “XB,” which indicates that the account information is disputed and an
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`investigation of the dispute is in progress by the furnisher. As a result, the
`
`
`3 Consumer reporting agencies and furnishers communicate about
`disputes using standardized codes. See generally CFPB, Key Dimensions
`and Processes in the U.S. Credit Reporting System: A Review of How the
`Nation’s Largest Credit Bureau’s Manage Consumer Data (Dec. 2012),
`https://files.consumerfinance.gov/f/201212_cfpb_credit-reporting-white-
`paper.pdf.
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`Waypoint account was marked as disputed on Ingram’s Experian credit
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`report.
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`Finally, Ingram filed a second indirect dispute with Experian, which
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`was again forwarded to Waypoint. The second indirect dispute noted that
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`the account in Ingram’s name was the subject of litigation, that Ingram
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`believed the account was fraudulent, and that he had obtained a police
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`report. At this point, Waypoint removed the account from Ingram’s credit
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`report and ceased collections on the account.
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`D. Procedural History
`On September 5, 2018, Ingram filed suit against Defendants
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`Waypoint, Experian, Equifax, and Comcast asserting claims under the
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`FCRA. The complaint also asserts claims, against all the Defendants, under
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`the Fair Debt Collection Practices Act, as well as claims for defamation
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`against Experian and Equifax and a claim under the Pennsylvania
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`Consumer Protection Law against Comcast. All Defendants other than
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`Waypoint settled.
`
`On May 7, 2020, Waypoint moved for summary judgment. On June
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`30, 2021, the district court granted summary judgment on all remaining
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`claims to Waypoint. The district court rejected Ingram’s FCRA claim
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`because he failed to satisfy his “burden of coming forward with evidence
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`Case: 21-2430 Document: 30 Page: 20 Date Filed: 09/13/2022
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`showing that he submitted a bona fide dispute.” Ingram v. Experian Info.
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`Sols., Inc., No. 18-cv-3776, 2021 WL 2681275, at *7 (E.D. Pa. June 30,
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`2021). The court explained that this requirement “is inherent in the first
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`element of an FCRA claim, which requires that a consumer give notification
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`of a dispute.” Id. at *5.
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`The court determined that the indirect dispute Ingram filed with
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`Experian was “frivolous,” and thus not “bona fide,” by applying the
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`statutory provisions that apply to direct disputes: First, it held that Ingram
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`had “not satisfied the requirements” in Section 1681s-2(a) pertaining to
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`what information a consumer must submit with a direct dispute “because
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`he did not submit ‘all supporting documentation or other information
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`reasonably required to substantiate the basis of the dispute.’” Id. at *7
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`(citing 15 U.S.C. § 1681s-2(a)(8)(D)(iii)). Second, it held that Ingram’s
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`“request for an investigation may be deemed frivolous” under the provision
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`in Section 1681s-2(a) that exempts furnishers from investigating certain
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`direct disputes “because he failed to provide sufficient information upon
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`which Waypoint could investigate.” Id. (citing 15 U.S.C. § 1681s-
`
`2(a)(8)(F)(i)(I)).
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`On July 30, 2021, Ingram filed this appeal.
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`Case: 21-2430 Document: 30 Page: 21 Date Filed: 09/13/2022
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`SUMMARY OF ARGUMENT
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`Under the FCRA’s indirect dispute provisions, when a consumer
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`reporting agency notifies a furnisher that a consumer has disputed
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`information in her credit report, the furnisher is required to conduct an
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`investigation. There are no exceptions to this rule to be found in the
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`statutory text. The district court, however, found an implicit exception for
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`frivolous disputes. It held that the FCRA requirement that furnishers
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`investigate indirect disputes applies only to so-called “bona fide disputes.”
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`This Court should reject this atextual, judge-made exception to furnisher
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`liability under the FCRA for three reasons.
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`First, the FCRA means what it says. There is nothing in the text of the
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`statute that suggests a furnisher can choose not to investigate disputes if it
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`deems them to be not “bona fide.” The statutory text is unambiguous:
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`furnishers must investigate all indirect disputes. Had Congress wished to
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`create an exception for frivolous disputes, it knew how to do so. In two
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`parts of the FCRA (those governing consumer reporting agencies’
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`obligations to investigate indirect disputes and furnishers’ obligations to
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`investigate direct disputes), Congress did exactly that. But Congress
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`intentionally chose not to include a similar exception to furnishers’
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`obligations to investigate indirect disputes.
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`Second, consumers are entitled to notice of the outcome of their
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`disputes and an opportunity to cure any deficiencies. The district court’s
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`holding would circumvent those requirements, leaving consumers in the
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`dark. Where the FCRA allows disputes to be rejected as frivolous—such as
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`when consumer reporting agencies reject frivolous indirect disputes or
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`when fu