InHernandez v. Specialized Loan Servicing Llc, Nos. 19-55163, 19-56313, 2020 U.S. App. LEXIS 36064 (9th Cir. Nov. 17, 2020), an unpublished decision, the Court of Appeals for the Ninth Circuit found against an FCRA Plaintiff.
As to the FCRA claims, plaintiffs failed to establish that SLS neglected its duty to conduct reasonable investigations of the dispute notices it received from the credit reporting agencies (CRAs). SLS had standard procedures in place- involving review of payment history, account status, etc.-to ensure that all credit disputes were investigated in accordance with the requirements of the FCRA. Nothing in the record indicates that SLS neglected to apply those procedures to the plaintiffs’ disputes. The plaintiffs object that SLS should have conducted an audit of Bank of America’s original payment records and the Loan Modification Agreement. But the reasonableness of SLS’s investigations is evaluated in light of “what it learned about the nature of the dispute from the description in the CRA’s notice of dispute.” Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147, 1157 (9th Cir. 2009). None of the dispute notices explained the plaintiffs’ theory that the Loan Modification Agreement had capitalized their escrow balance-rather, they stated in generic terms that the plaintiffs were contesting an “incorrectly reported delinquent amount” or an “erroneous balance.” SLS’s investigations were reasonable in light of these generic dispute notices.