Third Circuit Adopts New “Reasonable Reader” Standard and Holds Reporting Consumers’ Pay Status as Past Due with $0 Balance After Transfer Did Not Violate the Fair Credit Reporting Act
In this article, the authors examine a recent decision by the U.S. Court of Appeals for the Third Circuit finding that reporting a delinquent pay status with a zeroed-out balance where a past due account has been transferred is neither inaccurate nor misleading under the Fair Credit Reporting Act.
In Bibbs v. TransUnion LLC, the U.S. Court of Appeals for the Third Circuit (“Third Circuit”) affirmed the orders of the U.S. District Court for the District of Pennsylvania (“District Court”) granting TransUnion’s motions for judgment on the pleadings and dismissing the complaints in three separate actions by Marissa Bibbs, Michael Parke, and Fatoumata Samoura (collectively, “Appellants”) for violations of the Fair Credit Reporting Act (“FCRA”).
Specifically, the Third Circuit held that TransUnion’s credit reporting of Appellants’ accounts, which reflected a pay status of more than 120 days past due, a $0 balance, and closing of their accounts due to transfer, when read in their entirety, were accurate and not misleading under the “reasonable reader” standard.
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“Third Circuit Adopts New “Reasonable Reader” Standard and Holds Reporting Consumers’ Pay Status as Past Due with $0 Balance After Transfer Did Not Violate the Fair Credit Reporting Act,” by Diana M. Eng and Andrea M. Roberts was published in the January 2023 edition of Pratt’s Journal of Bankruptcy Law (Vol. 19, No. 1), an A.S. Pratt Publication, LexisNexis. Reprinted with permission.
This article was first published in Blank Rome’s Consumer Finance Watch blog in August 2022.