USA: FTC files amicus brief alleging misinterpretation of FCRA
On September 29, 2023, the Federal Trade Commission (FTC) announced that it had joined with the Consumer Financial Protection Bureau (CFPB) in filing an amicus brief in the U.S. Court of Appeals for the Second Circuit for a reversal of the judgment of the South District of New York in the case Khalilah Suluki v. Credit One Bank, NA.
In particular, the FTC highlighted that the plaintiff's mother opened multiple credit card accounts in their name without their knowledge or permission, which were only discovered following denied lease applications for apartments. Nonetheless, the FTC noted that while the South District Court of New York determined the evidence indicates that the plaintiff's mother opened a Credit One account in their name, it remained a question of genuine dispute as to whether the plaintiff's mother opened the account without consent.
Determinations of the FTC
The FTC disputed the South District Court of New York's interpretation of the Financial Credit Reporting Act (FCRA). Specifically, the FTC outlined that under §1681-2(b) of the FCRA, when a furnisher of credit information receives a consumer dispute forwarded by a consumer reporting agency, the furnisher must conduct an investigation into whether the disputed information can be verified. Where the investigation is unable to determine whether the disputed consumer information is accurate, the furnisher of credit information must inform credit reporting agencies that the information could not be verified and must delete it from the data it reports to the credit reporting agencies. Accordingly, the FTC noted that the South District Court of New York had failed to recognize that furnishers of credit information are required to delete unverifiable information, and argued for a reversal of the decision.