The Eight District Court of Appeals in Ohio has dismissed the claims of a consumer filed under the Fair Credit Reporting Act (FCRA) for erroneous reporting stating that no private right of action exists. In the summer of 2011, Stephen Johnson discovered an item on his credit report relating to an overdue amount to KeyBank and promptly notified KeyBank. Within two weeks, KeyBank rectified the error and all notations of the alleged debt were removed from the reporting agency ChexSystems. However, despite the correction, Johnson demanded monetary compensation from KeyBank and eventually sued KeyBank for conducting an “unauthorized inquiry” and “illegally” reporting him to a consumer reporting agency. Johnson also raised several state law causes of action.
KeyBank filed a motion for judgment on the pleadings which was granted and Johnson’s claims were dismissed. Johnson promptly filed an appeal.
The Court of Appeals dealt first with Johnson’s FCRA claim. The court noted that KeyBank is a furnisher as defined by the FCRA. A furnisher has two responsibilities under the Act. A furnisher is required to report accurate information and correct any inaccurate information as well as being responsible to undertake certain investigations when information is disputed by the consumer. The court dismissed Johnson’s claims holding that no private cause of action is available to a consumer under the FCRA for erroneous reporting. The court further noted that enforcement in this case resides exclusively with federal and state agencies.
Section 1681s-2(c) specifically exempts violations of 1681s-2(a) from private civil liability. Section 1681s-2(a) prohibits a person from furnishing information to a consumer reporting agency that is known or has reasonable cause to be known to be false or if the person has been notified by the consumer that the information is false and it in fact false. Violations of this type are explicitly reserved for enforcement by the Federal Trade Commission. As such, Johnson’s claim failed to state a claim upon which relief could be granted as no private right of action existed concerning the erroneous reporting.
With respect to Johnson’s state law claims of identity theft, libel, and conspiracy to defraud, the Court found that the sole fact underlying his allegations related to KeyBank’s erroneous reporting to ChexSystems. Therefore, all Johnson’s state law claims were preempted under Section 1861(b)(1)(F) of the FCRA.
Based on its findings, the Court of Appeals affirmed the trial court’s judgment dismissing the complaint.
The Full Text of the Opinion May Be Found At: http://www.sconet.state.oh.us/rod/docs/pdf/8/2014/2014-ohio-120.pdf
Special thanks to Meredith Hughes for her contributions to this article. Meredith is a Litigation Clerk with Slovin & Associates Co., L.P.A. and student at the University of Cincinnati College of Law.
