Lazarre v. JPMorgan Chase Bank, N.A., 780 F. Supp. 2d 1330 (S.D. Fla. 2011)

Facts: Plaintiff filed suit against JP Morgan Chase and Early Warning Services, a CRA, for alleged violations of the FCRA related to a fraudulent bank account. Specifically, Plaintiff claimed that a Washington Mutual bank account (the "Account") was fraudulently opened with his identifying information and was used to process forged, altered, stolen and counterfeited checks. In November 2009, Plaintiff began to dispute the reporting of the account with Early Warning claiming that the account was fraudulently opened and that he was the victim of identity theft. On three separate occasions, Early Warning conducted a reinvestigation and verified that the account was accurately reported. Based on correspondence sent to Plaintiff, Early Warning appeared to rely solely on the account information maintained by JP Morgan Chase (the then-current owner of the Account) and conducted only a minimal reinvestigation on its own. The correspondence did not show that Early Warning made any effort to verify that Plaintiff, as opposed to an identity thief, opened the account. In June 2010, Regions Bank closed one of Plaintiff's accounts based on an Early Warning consumer report which contained the Account. Early Warning filed a motion to dismiss Plaintiff's § § 1681i(a) and 1681e(b) claims on grounds that the Complaint failed to state a claim upon which relief may be granted. The Court disagreed and denied Defendant's motion.

  • Reinvestigation. To state a claim for violation of § 1681i(a) a plaintiff must allege: (1) the consumer's credit report contained inaccurate or incomplete information; (2) the plaintiff notified the CRA of the alleged inaccuracy; (3) the dispute was not frivolous or irrelevant; (4) the CRA failed to respond or conduct a reasonable reinvestigation of the disputed items; and (5) the failure to reinvestigate caused the plaintiff to suffer out-of-pocket losses or intangible damages. The Court, assuming Plaintiff's allegations were true, found that Plaintiff stated a claim for violation of § 1681i because a jury could conclude that Early Warning's reinvestigations were unreasonable, given the nature of Plaintiff's dispute and Early Warning's response.
  • Reasonable Procedures. To state a claim for violation of § 1681e(b) a plaintiff must allege: (1) the CRA published an inaccurate consumer report to a third party; (2) in publishing its consumer report, the CRA failed to follow reasonable procedures to assure the maximum possible accuracy of the consumer report; and (3) the plaintiff suffered actual damages as a result. The Court determined that if the fact-finder concluded that Early Warning's reinvestigation procedures were unreasonable under § 1681i, the fact-finder may also conclude that the report issued to Region's Bank in June 2010 was not prepared following reasonable procedures as required by § 1681e(b). Accordingly, Plaintiff adequately plead a § 1681e(b) claim.

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