Banking and Finance Law Daily Wrap Up, FAIR CREDIT REPORTING—2d Cir.: Consumer’s failure to follow credit dispute instructions did not support FCRA violation, (May 29, 2025)

By Justin Marcus Smith, J.D.

In reaching its decision, the Second Circuit emphasized that “the FCRA does not require furnishers to conduct perfect investigations—it requires only that furnishers conduct reasonable investigations.”

A consumer who sued Credit One Bank, N.A. (Credit One) under the Fair Credit Reporting Act (FCRA) failed to create a triable issue of fact on questions of causation and damages, held the U.S. Court of Appeals for the Second Circuit in affirming summary judgment for Credit One. The court noted, first, that the FCRA does not require perfect credit reporting dispute investigations. It only requires reasonable investigations. The Second Circuit and federal district court both acknowledged genuine issues of material fact about the accuracy of the consumer’s credit report information and whether her mother indeed opened and used the disputed credit card account without her permission. However, the Second Circuit agreed with the district court that no reasonable investigation, based on the information the consumer supplied to Credit One, could have caused anyone to conclude the disputed credit card account was not the consumer’s own account. The consumer simply did not supply evidence to Credit One that would have led anyone to conclude that the disputed account was fraudulent or unverifiable. The court also determined, as a matter of law, that even if Credit One violated the FCRA, no jury could conclude that the alleged violation was willful or negligent; therefore, the consumer was not entitled to damages. A joint amicus brief submitted by the Consumer Financial Protection Bureau and Federal Trade Commission was largely off-point because, again, the consumer did not supply Credit One with evidence that would have led anyone to conclude the disputed account was fraudulent or unverifiable (Suluki v. Credit One Bank, NA, No. 23-721-cv (2d Cir. May 28, 2025)).

Background. Plaintiff Suluki, a consumer, alleged that her mother stole her identity and fraudulently opened several credit card accounts in her name without her permission at various banks, including at defendant-appellee Credit One Bank, N.A. After discovering the alleged fraud, Suluki disputed the account with Credit One and notified the three major credit reporting bureaus.

Credit One said it investigated Suluki’s dispute multiple times, but it concluded the account was legitimate and belonged to Suluki. Suluki then sued Credit One alleging that the bank violated the Fair Credit Reporting Act (FCRA) for failure to conduct a reasonable dispute investigation. See 15 U.S.C. § 1681s-2(b)(1). On cross-motions for summary judgment, the district court granted summary judgment to Credit One. Applying de novo review, the Second Circuit affirmed.

FCRA requirements. The Second Circuit began by noting the FCRA does not set out guidelines for the furnisher’s investigation of disputed credit report information. It only provides for an investigation. Courts have read a reasonableness requirement into 15 U.S.C. § 1681s-2(b)(1)(A). Although the Second Circuit had not elaborated on what “reasonableness” means, the court said the question was “not a complicated one.” A reasonable procedure is one that a reasonably prudent person would undertake under the circumstances. The inquiry would turn in part on what the furnisher learned from the description found in the consumer’s notice of dispute. However, summary judgment would be appropriate if either: (1) no reasonable factfinder could conclude that the investigation conducted was unreasonable; or (2) if a reasonable investigation would not have yielded a different result. In the case of an unreasonable investigation, that must have caused the inaccuracy causing plaintiff damages for the FCRA to attach. Moreover, to recover damages, a plaintiff must show the FCRA violation was willful or negligent.

Genuine issues. In this case, conflicting testimony left genuine issues of fact as to whether Suluki’s mother opened the account with or without Suluki’s knowledge and consent and the steps Credit One took to investigate Suluki’s claims. However, the FCRA is not a strict liability statute. Merely reporting inaccurate information does not make for FCRA liability. In the instant context, the court said no reasonable investigation would have led Credit One to reach a different conclusion about Suluki’s account. The Second Circuit also held that no reasonable jury could have found that Credit One willfully violated the FCRA, precluding punitive damages.

Suluki failed to show the existence of a genuine issue of fact about whether a reasonable investigation would have uncovered additional evidence that would have led Credit One to find that her mother opened the account without her permission. The court did not agree with Suluki’s contention that she presented evidence that her mother was actively using the credit card inasmuch as the record showed Credit One did review that evidence. Credit One’s account notes made several references to that evidence.

Causation. Even if Credit One had overlooked the evidence, no jury would have reached a different conclusion. First, the affidavit Suluki supplied to Credit One facially showed that Suluki did not follow the instruction to provide a copy of an identity theft report submitted to law enforcement. Suluki also failed to follow the instruction to initial all unauthorized transactions, and she also introduced various other similar notational errors. Purported “direct links” to Suluki’s mother included a phone number and a physical address Suluki shared with her mother; the format of an email address suggested it belonged to Suluki, and payments were made from a joint account. Purchases on the account were also consistent with Suluki’s age demographic. The Second Circuit found a reasonable investigator could not rely on the evidence Suluki presented to conclude that anyone other than herself was responsible for the account.

Damages. The Second Circuit also rejected Suluki’s contention that Credit One willfully violated the FCRA to the extent it followed a rote investigation protocol. The court reasoned here that no reasonable jury could have found, on the instant record, that Credit One conducted a cursory investigation or an investigation that posed some unjustifiably high risk of arriving at an erroneous conclusion. Suluki did not point to any information that Credit One overlooked that would have led to a different conclusion. There was no way to conclude that Credit One acted in willful or reckless violation of the FCRA.

The court also rejected Suluki’s contention that Wood v. Credit One Bank, 277 F. Supp. 3d 821, 849 (E.D. Va. 2017), compelled a finding that Credit One willfully violated the FCRA. First, Wood was not “authoritative guidance” under Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47, 52 (2007), because it did not, as Safeco specified, qualify as guidance by or endorsed guidance from a court of appeal or the Federal Trade Commission.

Amicus brief. The CFPB and Federal Trade Commission filed a joint amicus brief arguing that the federal district court’s ruling that the consumer could not prove actual damages was mistaken. The agencies said the ruling should be reversed because the court failed to consider the possibility that the bank furnisher had not verified the consumer’s debt “and thus should have removed it from her credit report.” The CFPB and FTC contended the lower court’s summary judgment ruling wrongly denied the consumer an opportunity to show non-verification and consequential damages at trial (see Banking and Finance Law Daily, Oct. 6, 2023).

The Second Circuit reiterated here that it had concluded that Credit One had sufficient evidence to support its conclusion that the account information was verified. Additional investigation would not have led to a different conclusion. Suluki could not demonstrate that Credit One willfully violated the FCRA by verifying the account; therefore, she could not demonstrate that Credit One was liable for damages.

The case is No. 23-721-cv.

Judge: Chin, D.

Attorneys: Matthew W. H. Wessler (Gupta Wessler LLP) for Khalilah Suluki. Philip A. Goldstein (McGuireWoods LLP) for Credit One Bank.

Companies: Credit One Bank, N.A.

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