Wisconsin Federal District Court Denies Cross-Motions for Summary Judgment Holding the Reasonableness of Furnisher’s Investigation a Jury Determination

A U.S. District Court in the Western District of Wisconsin recently denied both the defendant and plaintiff’s summary judgment motions in a Fair Credit Reporting Act (FCRA) case, holding that the reasonableness of the defendant’s investigation of the plaintiff’s identity theft claim was a triable issue.

In Simonson v. IQ Data International, Inc., the plaintiff’s identity was stolen and used to rent an apartment in Arizona. When the fraudster fell behind on payments, the apartment leasing company hired the defendant, to collect the unpaid rent. The defendant contacted the plaintiff about the debt in April 2021 and was informed that the plaintiff never lived in Arizona and was the victim of identify theft.

The defendant instructed the plaintiff to submit a written dispute, including the police report. Later, one of the defendant’s representatives called the fraudster and the plaintiff on the same day and admitted that the plaintiff did not sound like the fraudster. In August 2021, the plaintiff submitted a dispute to the consumer reporting agencies (CRAs) asserting that she was the victim of identity theft. Following her dispute submission, one of the CRAs did not remove the account from the plaintiff’s report and the defendant continued to report the account as disputed.

To prove the validity of her identity theft claim and have the reporting removed, the plaintiff mailed a letter to the defendant using her employer’s Wisconsin letterhead that repeated her statement that she was a victim of identity theft and provided a copy of the police report. The defendant received the plaintiff’s letter and sent a response asking that she provide additional information, including paperwork demonstrating proof of residency during the time the identity theft occurred. The plaintiff never received the letter because it was misaddressed.

When the reporting continued, the plaintiff sent additional disputes to the CRA supporting her identity theft claim, including copies of her driver’s license and the police report. The defendant received the dispute and supporting documents but did not cease reporting on the account. After submitting a final dispute in February 2022 that resulted in no change in reporting, the plaintiff filed suit against the defendant alleging it violated the FCRA by failing to reasonably investigate her identity theft claim.

The parties filed cross-motions for summary judgment. The district court judge denied the motions finding the reasonableness of the defendant’s investigation was “a factual issue typically reserved for trial” unless the defendant’s procedures were reasonable or unreasonable “beyond question.”

In addressing the defendant’s motion for summary judgment, the court distinguished the case before it from Woods v. LVNV Funding, LCC, where the Seventh Circuit Court of Appeals affirmed summary judgment for a furnisher who stopped its investigation of a consumer’s identity theft claim after the consumer failed to respond to the furnisher’s request for more information. According to the court, Woods was distinguishable because there the furnisher had affirmative evidence that the information it possessed on the consumer was accurate while here the defendant had no information accurately linking the plaintiff to the Arizona debt. Additionally, the court found the plaintiff in this case continued to file disputes about the debt and provide corroborating information verifying her identity theft claim after the defendant sent the letter requesting additional information while the plaintiff in Woods did not. Although the plaintiff did not provide a copy of the information specifically requested by the defendant, in subsequent disputes she did provide a copy of a Wisconsin driver’s license that matched the address listed on her police report. The court found that in light of the plaintiff’s actions a reasonable jury could determine that the defendant should have taken additional steps to investigate her claim.

However, the court also denied the plaintiff’s motion for summary judgment holding that there was some uncertainty regarding whether a jury would find the defendant’s investigation of the plaintiff’s identity theft unreasonable. Specifically, the court noted that the plaintiff cited no caselaw holding a furnisher’s investigation was unreasonable as a matter of law, there was evidence that the defendant acted reasonably by promptly requesting the plaintiff provide additional information, and despite the plaintiff providing additional information, the plaintiff did not provide the specific information requested by the defendant.