On November 7, the United States District Court for the Western District of Tennessee addressed the issue of whether it is a violation of the Fair Credit Reporting Act for a creditor to report a charged-off account with a monthly payment due. In Ruvye Cowley v. Equifax Info. Servs., LLC, et al., the Court granted summary judgment to the creditor.

In March 2016, Ruvye Cowley entered into a Retail Installment Contract/Security Agreement, under which she was provided with $1,400 in consumer financing and agreed to make 24 monthly payments of $72.04 to repay the loan. Cowley failed to timely make payments and the creditor accelerated the debt. At some point, the creditor charged off and closed the account.

Cowley eventually received a credit disclosure from a consumer reporting agency that included the tradeline with a scheduled monthly payment of $72. Cowley disputed the report, arguing that because the account was closed and charged off, the scheduled monthly payment should report as “$0.00.” The creditor maintained that the tradeline was reporting accurately, so Cowley sued, claiming that the creditor violated the FCRA “by reporting a scheduled monthly payment when the account was, in fact, charged-off and closed.”

The Court began by rejecting Cowley’s requests to consider the Credit Reporting Resource Guide to determine whether the account was reported inaccurately. Cowley argued that it was inaccurate to report a charged-off account with a monthly payment due of $72 because the CRRG requires a creditor who has charged off an account to report the balance due as “$0.00.” The Court rejected this as an attempt to use inadmissible hearsay. The Court further noted that the CRRG contained industry guidelines, “not legal authority like regulations, laws or cases.” Hence, Cowley could not use the CRRG to show that the creditor inaccurately reported her charged-off account.

Next, the Court held that the tradeline was reported accurately. To bring a valid FCRA claim, Cowley needed to show that her tradeline was reported inaccurately. She failed to do so. The Court noted that it was undisputed that Cowley was obligated to make 24 monthly payments in the amount of $72.04. Since this is what was reported, the tradeline was accurate.

The Court further noted that Cowley also failed to show that the tradeline was materially misleading because she “submitted no proof that the report misled a creditor.” The Court frowned upon Cowley’s attempt to maintain a lawsuit while providing “only her opinion without admissible evidence that the allegedly inaccurate report created a misleading impression of her consumer credit file.” The Court noted that the United States Court of Appeals for the Sixth Circuit “has repeatedly found that a personal opinion, by itself, cannot support an inaccuracy claim under FCRA.” Because Cowley failed to meet her burden, the Court granted summary judgment against her.

This case addresses the unique situation of a creditor reporting a charged-off account with a monthly payment due. This Court found that doing so was accurate and, therefore, did not violate FCRA.