B. TheFCRA

Under the FCRA, a furnisher of information is an entity which transmits information about
a particular debt owed by a particular consumer to a consumer reporting agency. DiMezza y.
First USA Bank, Inc., 103 F. Supp. 2d 1296, 1299 (D.N.M. 2000). The parties agree that I.C.
System is a furnisher of information. The FCRA requires furnishers to provide accurate
information to consumer credit reporting agencies. 15 U.S.C. § 1681s-2(a).

The FCRA also provides that, “[a}fter receiving notice . . . of a dispute with regard to the
completeness or accuracy of any information provided by a person to a consumer reporting
agency, the person shall: (a) conduct an investigation with respect to the disputed information;
(b) review all relevant information provided by the consumer reporting agency .. . ; (c) report the
results of the investigation to the consumer reporting agency; and (d) if the investigation finds
that the information is incomplete or inaccurate, report those results to all other consumer
reporting agencies to which the person furnished the information and that compile and maintain
files on consumers on a nationwide basis.” 15 U.S.C. § 1681s-2(b)(1)(A-D); Bruce v. First
U.S.A. Bank, Nat. Ass’n, 103 F. Supp. 2d 1135, 1142 (E.D. Mo. 2000). The furnisher must
satisfy these requirements within thirty days of the receipt of the notice. 15 U.S.C. §
1681s-2(b)(2). A furnisher is liable if it negligently or willfully fails to comply with the statute.
15 U.S.C. §§ 1681n & 16810.

Ms. Wade claims that I.C. System failed to conduct a reasonable investigation into the
disputed Verizon account appearing on her credit report. See 15 U.S.C. § 1681s-2(b)(1)(A). To
determine if a credit reporting agency conducted a reasonable investigation, the court must

consider: (1) whether the consumer alerted the agency that the initial source of the information



and Ms. Wade did not appear to be the same person. Unfortunately for Ms. Wade, however, the
FCRA does not make a furnisher liable for a consumer reporting agency’s failure to properly act
on information received from that furnisher. See Olwell v. Medical Information Bureau, No.
01-1481 JRTFLN, 2003 WL 79035, at *4 (D. Minn. Jan 7, 2003).

This leaves the Court with Ms. Wade’s puzzling contention that 1.C. System “merely
verified the inaccurate information” provided by Verizon. See Pl.’s Resp., at 19.* This statement
contradicts the record, as I.C. System told Equifax that the name on the Verizon debt was Lori
White, not Lori Wade. Thus, the remaining dispute is based on the fact that IC. System sent
back the consumer debt verification form to Equifax pointing out that the debtor was Lori White
and Equifax nevertheless continued to adhere to an incorrect belief that ILC. System had verified
that the debt was, in fact, Lori Wade’s.

This dispute is not enough to allow Ms. Wade to survive summary judgment based on her
contention that I.C. System’s investigation was not up to par. The record clearly shows that I.C.
System examined its records and provided the fruits of that effort to Equifax well within thirty
days. Equifax’s failure to assimilate or act on the information does not change the fact that LC.
System conducted a prompt investigation of the information in its control and told Equifax that
the debtor was Lori White. Simply, Equifax’s fumbling of the form stating that Lori Wade was
not the name of the debtor on the Verizon account does not fall on LC. System.

In the interests of completeness, the Court also notes that Ms. Wade never contacted I.C.

System directly. Thus, the only other thing I.C. System could have done to investigate the debt

4 The Court notes that Ms. Wade submitted a 24 page memorandum in response to the
motion for summary judgment. Local Rule 7.1 limits filings to 15 pages unless the court orders
otherwise. In the interests of expediency, the Court did not require Ms. Wade to file a shorter
response. The Court, however, expects counsel for Ms. Wade (Krohn & Moss, which frequently
appears before this court) to comply with Local Rule 7.1 in the future.

7



which indicated that the account was disputed and asked the agencies to delete any references to
the account. On May 16, 2002, Ms. Wade received a letter from Verizon stating that they had
established that the “Lori White” account was fraudulent and that she would not be held
responsible. This lawsuit followed.”
I. Discussion

A. Standard for a Motion for Summary Judgment

Summary judgment is proper when the “pleadings, depositions, answers to
interrogatories, and admissions on file, together with the affidavits, if any, show that there is
no genuine issue of any material fact.” Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477
U.S. 317, 322 (1986). The party opposing the summary judgment motion “may not rest upon
the mere allegations or denials of the adverse party’s pleading”; rather, it must respond with
“specific facts showing that there is a genuine issue for trial.” Fed. R. Civ. P. 56(e). “The
evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in
his favor.” Valenti v. Qualex, Inc., 970 F.2d 363, 365 (7th Cir. 1992), citing Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 255 (1986). A court should grant a motion for summary
judgment only when the record shows that a reasonable jury could not find for the nonmoving

party. Valenti, 970 F.2d at 365; Anderson, 477 U.S. at 248.

? Ms. Wade previously dismissed her claims against Equifax, Verizon, and Fingerhut
Credit, which appears to be another company that provided inaccurate information based on Lori
White’s use of Lori Wade’s information. Thus, I-C. System is the sole remaining defendant.

3



was unreliable; (2) whether the agency knew or should have known that the source was
unreliable; and (3) the cost of verifying the accuracy of the source versus the possible harm of
reporting inaccurate information. Cushman v. Trans Union Corp., 115 F.3d 220, 225 (3d Cir.
1997). The reasonableness of an investigation is generally a question of fact for the jury. See
Bruce, 103 F. Supp. 2d at 1143.

Here, the record shows that Ms. Wade never contacted I.C. System directly. Instead, on
January 21, 2002, IC. System received a consumer dispute verification form from Equifax about
the Lori White Verizon account which appeared on Lori Wade’s credit report. On the same day,
1.C. System verified the account information by reviewing the name, address, and social security
number of the debtor in its records. It confirmed that the name on the account was Lori White,
not Lori Wade, filled out the form accordingly, and returned it to Equifax.

Ms. Wade contends that I.C. System’s investigation was not thorough enough. She
appears to be targeting I.C. System for Equifax’s failure to remove the Verizon account from her
credit report. The FCRA, however, only requires a furnisher who learns of a dispute to conduct a
reasonable investigation into the dispute and report its findings to the consumer reporting agency

within thirty days. 15 U.S.C. § 1681s-2(b)(1)(A)-(C) & (2)?

3 The FCRA also requires a furnisher to report the results of its investigation within thirty
days to “all other consumer reporting agencies to which the person furnished the information and
that compile and maintain files on consumers on a nationwide basis” if “the investigation finds
that the information is incomplete or inaccurate.” 15 U.S.C. §§ 1681s-2(a) & 1681s-2(b)(1)(D).
The record indicates that I.C. System disseminated the results of its investigation to Equifax on
the same day it received the inquiry form. It does not appear to have sent the results of its
investigation to all of the consumer credit reporting agencies until several months later.
However, Ms. Wade explicitly argues only that ILC. System’s investigation of the debt was
unreasonable. Thus, she has waived any potential argument based on LC. System’s apparent
failure to notify agencies other than Equifax of the problem with the Verizon debt.

5



would have been to contact Verizon and Ms. Wade and mediate their dispute to determine
whether Ms. Wade in fact was responsible for the Verizon debt. Even if ILC. System had done
this, the end result would have been the same as J.C. System, based on a review of its own
records, telling Equifax that the debt was Lori White’s, not Lori Wade’s.

In short, ILC. System complied with the FCRA’s investigation requirement by promptly
reviewing its records and telling Equifax that it believed that the proper debtor was Lori White.
Thus, it cannot be liable for conducting an inadequate investigation. To hold otherwise would
impose strict liability on furnishers for the actions of consumer reporting agencies who receive
information from them. Accordingly, the court finds that ILC. System satisfied the investigation
component of the FCRA. See 15 U.S.C. § 1681s-2(b)(1)(A). Because Ms. Wade’s arguments in
response to I.C. System’s motion for summary judgment focuses exclusively on the investigation
provision, I.C. System is entitled to summary judgment.

TI. Conclusion

For the foregoing reasons, I.C. System’s motion for summary judgment [26-1] is granted.

Because this disposes of the remaining claims in this case, the clerk is directed to enter a

Fed.R.Civ.P. 58 judgment terminating this case.

DATE: August 272003 Hanes Yh Yanainy

Blanche M. Manning
United States District Judge



inate Orjer Form (06/97)

‘ United States District Court, Northern District of Illinois
\

Name of Assigned Judge i Sitting Judge if Other
or Magistrate Judge Blanche M. Manning than Assigned Judge

CASE NUMBER 02 C 3205 DATE August 29, 2003

CASE Wade v. Equifax, et al.
TITLE

[In the following box (a) indicate the party filing the motion, e.g., plaintiff, defendant, 3rd party plaintiff, and (b) state briefly the
nature of the motion being presented.]

MOTION:

DOCKET ENTRY:

qa
Q)
3)
4)
(5)
(6)
(7)
(8)
(9)

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Filed motion of [ use listing in “Motion” box above.]
Brief in support of motion due
Answer brief to motion due . Reply to answer brief due

Ruling/Hearing on set for at

Status hearing[held/continued to] [set for/re-set for] on set for at

Pretrial conference{held/continued to] [set for/re-set for] on set for at

Trial{set for/re-set for] on at

(Bench/Jury trial] [Hearing] held/continued to at

oo0uUmUODULUODULUOULcO UCB

This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]
GFRCP4(m) General Rule21 OFRCP41(a\(1) OO FRCP41(a)(2).

(10) TM@ [Other docket entry] For the reasons stated on the attached Memorandum and Order, I.C. System’s
motion for summary judgment [26-1] is granted. The Clerk is directed to enter a Fed.R.Civ.P. 58
Judgment terminating this case.

(1) is) {For further detail see order on the reverse side of the original minute order.]

No notices required, advised in open court.

No notices required.
ql number of notices:

VY | Notices mailed by judge’s staff.

Notified counsel by telephone.

Docketing to mail notices.

£UNG9 Loisia’s'A

Mail AO 450 form. yMAI9
Copy to judge/magistrate judge. HS Ka ¢ dase
date mailed notice
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Date/time received in
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As noted by I.C. System, the FCRA does not automatically require it to call or write a
consumer who has disputed a debt. It also does not require it to tell a consumer reporting agency
what to delete or add to a credit report. The FCRA plainly requires a furnisher to do precisely
what I.C. System did — promptly review its records to make an initial determination as to whether
the disputed information is correct. If the records show that the information is incorrect, a
furnisher is only required to disseminate that information to the consumer reporting agencies.
Because I.C. System’s records showed that the debt was Lori White’s not Lori Wade’s and I.C.
Systems imparted this information to Equifax, I.C. System was not required to go any further in
order to reasonably investigate the dispute. Cf Bruce, 103 F. Supp. 2d at 1143-44 (after credit
reporting agencies and plaintiff told a bank which had issued a credit card that the account was
fraudulent, fact question as to the reasonableness of the bank’s investigation existed when the
bank’s records indicated that the signatures on the credit card applications did not match the
plaintiff's signature and the bank nevertheless verified the debt without conducting any further
investigation); Kronstedt v. Equifax, No. 01-C-0052-C, 2001 WL 34124783, at *17 (W.D. Wis.
Dec 14, 2001) (fact question as to the reasonableness of a bank’s investigation existed when its
credit department verified a debt even though the consumer dispute verification form indicated
that the plaintiff claimed that the account was not hers and the bank’s collection department
suspected that the account was fraudulent but did not communicate this information to the credit
department).

It is true that Equifax did not promptly remove the information about the Verizon debt
from Ms. Wade’s credit report. In an ideal world, Equifax would have immediately acted to

correct its records once it received the form from IC. System indicating that the Verizon debtor



IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION
LORI WADE, )
)
Plaintiff, )
)
Vv. ) No. 02 C 3205
) ue eS
EQUIFAX, et al., ) pot wh ao
) or? 98 v
Defendant. )

MEMORANDUM AND ORDER

Plaintiff Lori Wade is a victim of identity theft. She claims that defendant I.C.
System, Inc., which was attempting to collect a debt on behalf of a cellular phone company,
failed to conduct a reasonable investigation regarding the debt allegedly owed by her as required
by the Fair Credit Reporting Act, 15 U.S.C. § 1681s-2(b)(1)(A) (“FCRA”). Presently before the
Court is 1.C. System’s motion for summary judgment pursuant to Fed.R.Civ.P. 56. For the
following reasons, the motion is granted.
L Background

The following facts are undisputed unless otherwise noted. Verizon provides cellular
telephones and cellular telephone service to its customers. In June 2001, LC. System contracted
with Verizon to collect an unpaid account belonging to an individual named Lori White, who
resided in Pomona, California. Plaintiff Lori Wade resides in Wyoming.

Ms. Wade claims that an unknown person stole her personal information and wrongfully

created a Verizon account using her social security number. After the account was sent to IC.

System for collection, Equifax, a consumer credit reporting agency, placed this information on



Ms. Wade’s credit report. Ms. Wade repeatedly disputed this entry with Equifax. Equifax told
Ms. Wade that it had contacted ILC. System directly to verify the debt.

On January 21, 2002, I.C. System received a consumer dispute verification form from
Equifax regarding Ms. Wade’s claim that she was not responsible for the Verizon debt. In
response, I.C. System verified the account information by reviewing the name, address, and
social security number of the debtor in its records. J.C. System discovered that the name on the
account was Lori White, not Lori Wade, filled out the form accordingly, and returned it to
Equifax that same day.' See Affidavit of Carol Labs, at | 7 (Defendant’s Ex. A).

In February 2002, Ms. Wade received a letter from Equifax stating that it had verified that
the 1.C. System Verizon debt belonged to her. Dissatisfied, Ms. Wade again complained to
Equifax and again received a letter stating that it had verified that the debt was hers.

In April 2002, Ms. Wade ordered a consumer disclosure from Equifax and learned that the
1.C. System account for the Verizon debt still appeared on her credit report. She thus sent
Verizon an affidavit supporting her fraud claim. In the affidavit, Ms. Wade noted that the name
on the account — Lori White — was not her name, and that the fictitious Lori White had used her
social security number.

On May 10, 2002, I.C. System received an e-mail from Verizon which told I.C. System to
withdraw the account due to fraud. I.C. System immediately withdrew the account and flagged it

as disputed. On May 13, 2002, I.C. System sent computer tapes to the credit reporting agencies

' Ms. Wade disputes that ILC. System told Equifax that the account belonged to a
different person. However, she does not point to any evidence in the record to support her
position, and I.C. System’s version of the facts is supported by the record. Thus, this fact is
deemed admitted for the purposes of I.C. System’s summary judgment motion. See Local Rule
56.1(b)(3).