FCRA Furnisher Duty Defined: Reasonable Investigations Need Not Guarantee Consumer-Favorable Outcomes

1. Introduction

Suluki v. Credit One Bank, NA, 23-721-cv (2d Cir. May 28, 2025), examines the scope of a furnisher’s duty under the Fair Credit Reporting Act (FCRA) when a consumer disputes allegedly fraudulent information. Plaintiff‐appellant Khalilah Suluki alleged that her mother opened a Credit One account in Suluki’s name without authorization, and that Credit One failed to conduct a reasonable investigation into her dispute. The Second Circuit had to decide (1) what constitutes a “reasonable” investigation under FCRA § 1681s-2(b), and (2) whether Suluki could prove that any investigation—no matter how thorough—would have changed Credit One’s conclusion that the account was legitimate.

2. Summary of the Judgment

The Second Circuit affirmed the Southern District of New York’s grant of summary judgment to Credit One on two independent grounds:

Causation: Even assuming Credit One’s investigation was imperfect, no reasonable inquiry would have produced evidence showing the account was fraudulent or belonged to someone else.
No Willfulness or Negligence: Suluki failed to present any triable issue that Credit One’s procedures were so deficient as to amount to willful or negligent noncompliance with the FCRA, thereby barring any award of actual or punitive damages.

3. Analysis

3.1 Precedents Cited

Although the opinion does not dwell on a long line of cases, it rests on well-established FCRA principles:

Safeco Ins. Co. v. Burr, 551 U.S. 47 (2007) – Willfulness under the FCRA includes reckless behavior; absent clear statutory guidance, a furnisher’s interpretation is not “willful” unless objectively unreasonable.
Longman v. Wachovia Bank, N.A., 702 F.3d 148 (2d Cir. 2012) – Furnishers must “reasonably investigate and verify” disputed information once notified by a credit reporting agency.
Felts v. Wells Fargo Bank, N.A., 893 F.3d 1305 (11th Cir. 2018) – A consumer cannot prevail on a § 1681s-2(b) claim without showing that a reasonable investigation would have yielded a different outcome.
Gorman v. Wolpoff & Abramson, LLP, 584 F.3d 1147 (9th Cir. 2009) – Defines “reasonable investigation” as a “fairly searching inquiry,” more than a cursory review of the dispute.
Johnson v. MBNA America Bank, 357 F.3d 426 (4th Cir. 2004) – Rule that furnishers must undertake more than perfunctory fact-checking.

3.2 Legal Reasoning

Statutory Duty: Under 15 U.S.C. § 1681s-2(b), once a furnisher receives notice from a consumer reporting agency (CRA) of a dispute, it must:

Conduct an investigation of the disputed information.
Report the results back to the CRA in a timely manner.
Correct or delete any information found to be inaccurate, or mark it as “disputed.”

The FCRA does not prescribe a detailed investigative protocol, but courts uniformly require that the investigation be reasonable—i.e., what “a reasonably prudent person would undertake under the circumstances.” The Second Circuit joined its sister circuits in holding that, if even a perfect investigation would not have yielded a different result, the furnisher cannot be held liable as a matter of law. This addresses the causation element in an FCRA claim: the consumer must show not only that the investigation was unreasonable, but that a proper investigation would have uncovered the inaccuracy.

Application to Credit One: Credit One’s investigators:

Reviewed the consumer dispute codes (ACDVs) supplied by the CRAs.
Examined all accompanying documents (affidavits, ID copies).
Checked internal database flags (EWS score, “red-flag” matches to other accounts).
Studied payment history (regular, on-time payments weighed against typical identity theft patterns).
Used external databases (LexisNexis, Experian) to confirm identifying details over time.

The court found that, even if some procedural steps were arguably imperfect, no reasonable set of procedures could have led Credit One to conclude the account was fraudulent.

3.3 Impact

Suluki clarifies two important points for future FCRA litigation:

Outcome Causation Requirement: Consumers must prove that a reasonable investigation would have led to correction of the record. If not, the furnisher is entitled to judgment as a matter of law.
Limited Damages: Absent proof of willful or negligent noncompliance, consumers cannot recover actual or punitive damages. Furnishers following a consistent protocol—even an imperfect one—will likely avoid liability if their procedures yield accurate or justifiable results.

This decision should reduce the volume of FCRA suits against furnishers where the consumer is unable to show that any additional inquiry would have turned up exculpatory evidence or that the furnisher’s misstep caused the harm.

4. Complex Concepts Simplified

Furnisher: A bank or creditor that supplies consumer‐debt information to credit reporting agencies.
ACDV (Automated Consumer Dispute Verification): The electronic notice a CRA sends to a furnisher when a consumer disputes an item on their credit report.
Reasonable Investigation: A fact‐dependent inquiry that goes beyond cursory review, using both internal and external data sources tied to the consumer’s claim.
Willful vs. Negligent Noncompliance:
- Willful: Knowing or reckless violation of the FCRA standards.
- Negligent: Failure to exercise reasonable care in conducting the investigation.
Causation in FCRA Claims: Consumers must show that any deficiency in the investigation caused the continued reporting of inaccurate or unverified information.

5. Conclusion

Suluki v. Credit One Bank, NA affirms a practical, causation-focused approach to FCRA § 1681s-2(b) claims. A furnisher’s duty is to conduct a reasonable investigation upon receiving a CRA‐generated dispute notice—not to guarantee that the consumer’s version of events will prevail. If no reasonable inquiry could have uncovered evidence to change the reporting decision, the furnisher is immune from liability, and absent any willful or negligent breach, no damages flow. This ruling streamlines FCRA litigation and underscores the twin pillars of reasonableness and causation in furnishers’ post-dispute obligations.