District Court (Cal.) Confirms Reduced Credit Score Is Insufficient “Damage” Under FCRA

In Gadomski v. Patelco Credit Union, No. 2:17-cv-00695-TLN-AC, 2020 U.S. Dist. LEXIS 51070 (E.D. Cal. Mar. 23, 2020), Judge Nunley dismissed an FDCPA case because of the lack of damages.

Plaintiff further contends that FRCA plaintiffs may prove a claim for actual damages by showing the unreasonable investigation of a credit dispute has resulted in emotional harm or humiliation, even where credit was not denied. Banneck v. HSBC Bank USA, No. 15-cv-02250-HSG, 2016 U.S. Dist. LEXIS 79980, 2016 WL 3383960, at *26-27 (N.D. Cal. June 20, 2016). In reply, Defendant argues Plaintiff attributes the alleged emotional damages to the class, and, even if the allegations were attributed solely to Plaintiff, the claims are vague and conclusory. (ECF No. 20 at 5.) This Court previously addressed the same damage claims by Plaintiff in the related case of Gadomski v. Equifax Information Sercives, LLC, No. 2:17-cv-00670-TLN-AC, 2018 U.S. Dist. LEXIS 76898, 2018 WL 2096862, at *9 (E.D. Cal. 2018). As the Court noted there, many district courts have held that a plaintiff cannot recover damages for an impaired credit score alone. See, e.g., Basconcello v. Experian Info. Sols., Inc., No. 16-CV-06307-PJH, 2017 U.S. Dist. LEXIS 39844, 2017 WL1046969, at *10-11 (N.D. Cal. Mar. 20, 2017); King v. Bank of Am., N.A., No. C-12-04168 JCS, 2012 U.S. Dist. LEXIS 141963, 2012 WL 4685993, at *6 (N.D. Cal. Oct. 1, 2012). Furthermore, while the Ninth Circuit has not taken a stance on whether out-of-pocket expenses incurred in the ordinary course of disputing inaccuracies in a consumer credit report constitute actionable damage, courts in this circuit have adopted the view of the Second Circuit, which has held that “expenses incurred merely to notify [CRAs] of inaccurate credit information, and not to force their compliance with any specific provision of the statute, cannot be compensable as ‘actual damages’ for a violation of the FCRA.” Basconcello, 2017 U.S. Dist. LEXIS 39844, 2017 WL1046969, at *11 (quoting Casella v. Equifax Credit Information Services, 56 F.3d 469, 474 (2d Cir. 1995)). The Court continues to find this analysis persuasive. Therefore, Plaintiff’s alleged damages regarding her creditworthiness and out-of-pocket expenses are not sufficient to show actual damages. Furthermore, the Court finds Plaintiff’s claims of emotional distress are vague and conclusory. While it may be possible to state a claim for emotional distress as a result of the inaccurate reporting and unreasonable investigation of the disputed credit information, Plaintiff has failed to state any facts indicating she personally suffered distress as a result of Defendant’s actions. Accordingly, the Court GRANTS Defendant’s Motion for Judgment on the Pleadings as to Plaintiff’s first claim. Because these defects may be cured by amendment, leave to amend is granted.