In Potter v. Chex Systems, Inc., 2014 WL 4666960 (S.D.Cal. 2014), Judge Burns dismissed a Plaintiff’s FCRA claim, where the Plaintiff argued that since he’d paid off the charges on the Account, the CRA should not have reported that his bank account was closed for Account Abuse.

Potter admits he overdrew his account, and allowed it to remain overdrawn, and that after an unspecified time the bank closed it. Only after his account was closed did he pay off his debt of $577.61 to U.S. Bank. (Am.Compl., ¶¶ 12–14.) He has not alleged he had an overdraft agreement in place with U.S. Bank, or that U.S. Bank in any other way consented to allow him to maintain his account in an overdrawn state. Rather, the decision to close the account makes clear the bank thought he was acting illicitly and did not consent to it.  After the account was closed, Chex reported Potter’s checking account for “Account Abuse.” According to the allegations, this was an accurate report. See Steward v. Wells Fargo Bank, N.A., 2011 WL 3207037, at *6–7 (D. Minn., June 10, 2011) (where plaintiff failed to cover overdraft when requested to do so and the account was then closed, report that the account was closed for “account abuse” was true). Although Potter alleged that the report of “account abuse” was inaccurate and ought to have been removed (Am.Compl., ¶¶ 17–18, 75, 83), these allegations are conclusory and not entitled to be presumed true. See Eisberner v. Discover Prods ., Inc., 921 F.Supp.2d 946, 948 (E.D.Wis.2013) (rejecting as conclusory the assertion, unsupported by factual allegations, that describing certain accounts as “charged off” was inaccurate). Apparently, Potter seems to be arguing that paying off an account that was closed for account abuse absolves him of the abuse ( see Am. Compl., Ex. 1), which is not correct. Agencies may, and do, report violations of credit agreements even after payment is received. See, e.g., Narog v. Certegy Check Servs., Inc., 759 F.Supp.2d 1889, 1193–95 (N.D.Cal., 2011) (holding that plaintiff whose credit report showed he had a 120–day late payment on a debt he had since paid off had no cause of action under the FCRA).   The complaint, and Potter’s letters (attached as exhibits) show that Potter was not disputing the fact that U.S. Bank closed his checking account after he maintained an overdraft, and that he paid off his debt only after the account was closed. What he was and is disputing is the use of “account abuse”, as his letter of July 3, 2013 makes clear:    Your computers will “verify” I bank with U.S. Bank as I have many accounts with them. They will verify I have had an account closed. But you need to verify the actual information I’m disputing. I’m disputing that it is accurate to have words anything like “account abuse” related to me.   (Ex. 10 at 1–2.) But Potter’s behavior can fairly be called “account abuse.” The FCRA does not require that accurate negative information be removed from credit reports, even if a consumer disagrees with the language that is used to report it. See Samadi v. Bank of America, N.A., 476 Fed. Appx. 819, 823 (11th Cir.2012).   Potter has not identified any other inaccuracy other than the “account abuse” language. He has not, for example, alleged that his report inaccurately said he had never paid off the debt. Chex says the report was updated to show Potter paid U.S. Bank what he owed ( see Am. Compl., Ex. 2), and he does not dispute this.