Furnisher’s Duty to Conduct Reasonable Reinvestigation Under FCRA §1681s-2(b)

Introduction

Michael and Andrew Ritz ("Plaintiffs") leased a vehicle that Nissan Motor Acceptance Corporation ("Nissan") later financed. A disagreement arose when Plaintiffs attempted to return their leased vehicle at the end of the term but could not schedule an inspection appointment. Nissan assessed additional monthly charges for a purported failure to return the vehicle in the agreed-upon form, reported those late payments to consumer reporting agencies (CRAs), and did not remove the derogatory information after Plaintiffs formally disputed it. Plaintiffs sued under the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. §1681s-2(b), arguing that Nissan violated its duty to investigate and correct inaccurate credit information after receiving notice of the dispute. The District Court granted summary judgment to Nissan, concluding the dispute was a “legal” contract question not actionable under FCRA. On May 6, 2025, the Third Circuit reversed, holding that genuine factual disputes precluded summary judgment and remanding for trial.

Summary of the Judgment

The Third Circuit reviewed de novo the lower court’s grant of summary judgment. It identified two threshold requirements for a private suit under §1681s-2(b):

Prima facie showing that the furnisher’s reporting was inaccurate or incomplete, and
Evidence that any inaccuracy was the product of an unreasonable investigation.

The Court held that:

Plaintiffs “submitted more than a contract dispute”: Nissan’s own complaints department had determined Plaintiffs owed zero balance and requested removal of the delinquency, yet Nissan’s credit-reporting team refused to update the file because of a VIN typo. A jury could find the continued reporting misleading or inaccurate.
Whether Nissan’s internal investigation was “reasonable” was a fact issue. A jury could conclude that reliance on an incorrect VIN, failure to reconcile customer-service findings with credit reporting, and poor inter-departmental communication fell short of the “reasonable reinvestigation” mandated by FCRA.
Because genuine disputes of material fact existed on both prongs, summary judgment was improper. The case was remanded for further proceedings.

Analysis

Precedents Cited

Giles v. Kearney, 571 F.3d 318 (3d Cir. 2009): At summary judgment, disputed facts must be viewed in the light most favorable to the non-movant.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986): Summary judgment is improper unless no reasonable jury could find for the non-movant.
Cortez v. Trans Union, LLC, 617 F.3d 688 (3d Cir. 2010): FCRA’s purpose is to ensure “accurate, relevant, and current” credit reporting; furnishers must correct or delete inaccurate or unverified information after notice of dispute.
Seamans v. Temple Univ., 744 F.3d 853 (3d Cir. 2014): Defines “inaccurate” information to include technically correct data that nevertheless creates a materially misleading impression.
Bibbs v. Trans Union LLC, 43 F.4th 331 (3d Cir. 2022): Establishes the two-part test (inaccuracy + unreasonable investigation) applicable to reinvestigation claims against CRAs—and by extension furnishers under §1681s-2(b).
Frazier v. Dovenmuehle Mortg., Inc., 72 F.4th 769 (7th Cir. 2023): Confirms the two-pronged threshold approach for furnisher investigations under FCRA.
Gross v. CitiMortgage, Inc., 33 F.4th 1246 (9th Cir. 2022): Holds that purely legal disputes over debt validity may not qualify as “inaccurate” under FCRA, but the Third Circuit did not decide that issue here.

Legal Reasoning

1. Threshold Inaccuracy. The Court refused to limit “inaccuracy” to factual misstatements that are objectively verifiable. Instead, it reaffirmed that records technically correct can be “inaccurate” if they convey a materially false or misleading picture—here, the report that Plaintiffs still owed money after Nissan’s own complaints department cleared their balance.

2. Reasonableness of Investigation. FCRA mandates “reasonable reinvestigation” after notice of dispute. The Court emphasized a “reasonably prudent person” standard, balancing the risk of harm against the burden of investigation. Nissan’s credit department’s refusal to reconcile a simple typo with clear service-department findings created a triable issue on whether its procedures were reasonable.

3. Summary Judgment Standard. Because Nissan pointed to conflicting evidence of liability and Plaintiffs pointed to evidence of Nissan’s internal findings and the VIN error, the Court concluded that only a jury—not a judge on summary judgment—could resolve the factual disputes.

Impact

Furnisher Compliance: Furnishers must ensure internal departments communicate effectively and credit reporting teams heed substantiated dispute resolutions, even if a minor clerical error exists.
Scope of “Inaccuracy”: Third Circuit leaves open whether bona fide legal disputes alone can trigger FCRA protection but underscores that misleading reports—despite technical correctness—are actionable.
Future Litigation: Credit disputes rich with internal correspondence or contradictory departmental conclusions may survive summary judgment and proceed to trial.
Consumer Protection: Affirms FCRA’s remedial purpose by allowing consumers to challenge not only clear data errors but also misleading reporting practices.

Complex Concepts Simplified

FCRA §1681s-2(b): Obligates furnishers (like Nissan) to investigate disputed credit information and correct or delete inaccuracies.
CRA vs. Furnisher: CRAs compile and sell credit information. Furnishers supply raw data (e.g., lenders reporting late payments). Both have separate duties under FCRA.
Summary Judgment: A legal ruling ending a case before trial when key facts are undisputed. All reasonable doubts must favor the non-movant.
Prima Facie Showing: The threshold demonstration that data may be inaccurate or incomplete, shifting the burden to the defendant to show its investigation was reasonable.
Reasonable Reinvestigation: A fact-specific inquiry into whether a furnisher acted like “a reasonably prudent person” under the circumstances to verify or correct reported information.

Conclusion

Michael Ritz v. Equifax Information Services LLC clarifies that a furnisher’s duty under FCRA §1681s-2(b) extends beyond black-and-white factual errors to any reporting that misleads a reasonable consumer after a dispute—especially when internal evidence contradicts the reported information. The Third Circuit’s decision reinforces the “reasonable reinvestigation” standard, underscores the value of inter-departmental coordination in credit reporting, and preserves a consumer’s right to have misleading credit entries reviewed by a jury. Lenders and furnishers nationwide should review their dispute-handling procedures to ensure that all relevant internal findings are integrated into their credit reporting processes.