Fair Credit Reporting Act (FCRA) litigation has increased in 2017 and shows little sign of slowing. While a plaintiff’s actual damages may be minimal, the statute’s award of reasonable attorney’s fees and costs for a prevailing plaintiff undoubtedly incentivizes the plaintiffs’ bar to develop new legal theories of inaccurate or misleading reporting. Fortunately, such legal theories may be susceptible to early motions to dismiss.

Recently, in Leones v. Rushmore Loan Management Services, LLC (Rushmore), 2017 WL 6343622 (S.D. Fla. Dec. 11, 2017), the plaintiff defaulted on her mortgage loan. Rushmore’s predecessor accelerated the loan and filed a separate mortgage foreclosure action. Rushmore subsequently took over servicing and reported, for six consecutive months, that plaintiff’s mortgage loan was delinquent by 120 days or more. Rushmore’s reporting also noted that foreclosure proceedings had been initiated. Plaintiff disputed Rushmore’s reporting to two consumer reporting agencies that, in turn, notified Rushmore about the dispute. Rushmore did not materially change its reporting.

In response, plaintiff filed suit. She claimed that Rushmore violated the FCRA by failing to properly investigate and correct its allegedly inaccurate or misleading reporting. Rushmore moved to dismiss. Significantly, plaintiff had not alleged that she had, in fact, made payments for the time periods reported as delinquent. Rather, her FCRA claim rested on the contention that Rushmore’s reporting was “incomplete” because the mortgage foreclosure action accelerated the mortgage so that plaintiff had neither the ability—nor the obligation—to make monthly payments.

The district court rejected plaintiff’s novel theory and dismissed the action with prejudice. The court recognized that, while an omission can create a misleading impression that is actionable under the FCRA, Rushmore’s reporting of delinquencies and a pending foreclosure was accurate and complete according to the complaint’s allegations. It further noted that plaintiff alleged, at most, a non-actionable legal defense to the debt, rather than an actionable factual inaccuracy. And since the reporting was factually accurate, Rushmore had no duty to investigate. Thus, as Leones illustrates, a motion to dismiss may be an effective defense to FCRA claims premised on novel legal theories, rather than on allegations of inaccurate facts.