In Isler v. GE Emples. Fed. Credit Union, No. 3:18-cv-00867 (MPS), 2020 U.S. Dist. LEXIS 176562 (D. Conn. Sep. 25, 2020), Judge Shea clarified when a Furnisher is and is not required to report an account as “disputed”.
Plaintiff [*22] also argues that GE Credit Union was negligent in failing at least to mark Plaintiff’s account as disputed. Some courts have interpreted § 1681s-2(b)(1)(D) to impose an independent duty on furnishers to report an account as disputed, at least where the dispute is “bona fide.” See Boggio, 696 F.3d at 618 (noting that “the Fourth and Ninth Circuits have recognized that a furnisher violates § 1681s-2(b)(1)(D) if it fails to identify that a consumer disputes his information, at least where the consumer’s dispute is ‘a bona fide dispute, a dispute that could materially alter how the reported debt is understood.’ citing Gorman, 584 F.3d at 1163 and Saunders v. Branch Banking and Trust Co. of VA, 526 F.3d 142, 151 (4th Cir. 2008)). Whatever duties are imposed by subsection 1681s-2(b)(1)(D), however, they do not arise unless “the investigation finds that the information [being reported by the furnisher] is incomplete or inaccurate.” 15 U.S.C. § 1681s-2(b)(1)(D). In this case, as noted, I have found, as a matter of law, that GE Credit Union failed to conduct a reasonable investigation with respect to the disputes initiated on May 16 and 17, 2018, but that a reasonable juror could find that it did conduct a reasonable investigation with respect to the two earlier disputes. This finding obviates any need for me to address whether (a) there is an independent duty to report matters as disputed under subsection (D) or (b) GE Credit Union violated that duty. I have already found that GE was negligent with respect to the first two disputes — not for a mere failure to report the debt as disputed but for the erroneous reporting of the debt as anything but a zero balance. With respect to the two later disputes, my conclusion that a reasonable juror could find that GE Credit Union conducted a reasonable investigation precludes me from finding as a matter of law that it was negligent in failing to mark the account as disputed: When Ms. DaCruz conducted her investigation in response to the two earlier disputes, the sources she consulted indicated that the full balance of $15,000 was owed and that the debt was charged off. None of those sources gave her reason to doubt the accuracy of that report, and thus none gave her reason to believe the dispute — such as it was reported to her — was “bona fide.” See Gorman, 584 F.3d at 1163 (“[A] furnisher does not report ‘incomplete or inaccurate’ information within the meaning of § 1681s-2(b) simply by failing to report a meritless dispute ….”). As long as her investigation was reasonable — which, as noted, is a jury question — the credit union had no obligation to report the debt as disputed.