Fair Credit Reporting Act
Ritz v. Equifax Information Services
Date: May 6, 2025
Issue: Did Nissan violate the Fair Credit Reporting Act (FCRA) by reporting inaccurate information to consumer reporting agencies (CRAs) and failing to investigate plaintiffs’ dispute properly?
Case Summary: A unanimous Third Circuit panel reversed a New Jersey federal court decision and ruled that a jury could find Nissan’s credit reporting inaccurate and its investigation unreasonable under the FCRA.
Michael and Andrew Ritz (plaintiffs) sued Nissan, claiming it violated the FCRA by reporting them as delinquent to CRAs. Plaintiffs leased a car from Nissan, which required them to return the vehicle at lease-end after a mandatory inspection. On the last day of the lease, they returned the car without scheduling the inspection. The dealership refused to accept it, and Nissan charged a monthly fee for retaining possession. Plaintiffs refused to pay, and Nissan reported the unpaid fee to the CRAs. Plaintiffs disputed the report.
In their complaint, plaintiffs alleged that Nissan had no legal or contractual basis to assess the fee because they returned the car on time. Under the FCRA, furnishers and CRAs must investigate disputes over the accuracy of reported information. Nissan contended the dispute raised a legal question, not a factual inaccuracy, making it ineligible under the FCRA.
The district court granted summary judgment to Nissan, ruling that plaintiffs failed to show a factual inaccuracy in Nissan’s report. The court concluded that the Third Circuit hasn’t ruled on whether legal disputes over a debt’s validity count as factual inaccuracies under the FCRA. However, courts across the country, including within the Third Circuit, have generally held that legal disputes alone can’t support FCRA claims.
On appeal, CFPB filed an amicus brief supporting plaintiffs, urging the Third Circuit to reject the distinction between factual inaccuracies and legal disputes because this framework is unworkable. In response, ABA filed an amicus brief opposing CFPB’s position, arguing that the FCRA’s text, structure, purpose, and history emphasize factual accuracy. ABA also maintained that courts nationwide have correctly interpreted the FCRA and warned that CFPB’s proposed framework would create inefficiencies.
The Third Circuit panel reversed, ruling the district court erred because plaintiffs met the two requirements to state a claim under the FCRA. First, the panel concluded that plaintiffs presented enough evidence to show that Nissan provided incomplete or inaccurate information. Nissan claimed plaintiffs owed and failed to pay additional monthly charges, even though its own complaints department repeatedly determined plaintiffs had no outstanding obligation. Additionally, the panel noted that the delinquency persisted only because the dealership made a typographical error in its letter to Nissan, and Nissan’s credit reporting department repeatedly refused to correct the mistake.
Second, the panel found that plaintiffs showed the inaccuracy or incompleteness resulted from an unreasonable investigation. According to the panel, an investigation qualifies as “reasonable” if a reasonably prudent person would have conducted it under the circumstances. The panel concluded that a jury could reasonably find Nissan’s investigation unreasonable because the credit reporting team refused to consider evidence showing its reporting might be inaccurate.
Bottom Line: The court did not address whether the FCRA requires credit reporting agencies and furnishers to adjudicate legal disputes over the validity of debit.
Documents: Opinion
