District Court (Cal.) Says Reporting Past-Due Payment During BK is Not Inaccurate under FCRA, but Failure to Report Account in Bankruptcy is Inaccurate

As analyzed in the Court’s prior ruling, the reporting of balances due, or past due, does not constitute an “actual inaccuracy” simply because a bankruptcy proceeding is pending. Biggs v. Experian Info. Sols., Inc., 209 F. Supp. 3d 1142, 1146 (N.D. Cal. 2016) (neither filing of a petition nor confirmation of Chapter 13 plan “ ‘absolve[s]’ or erase[s] either the debt or the fact that payments are past due;” legal status of debt changes only when discharged in bankruptcy); see also Devincenzi v. Experian Info. Sols., Inc., No. 16-CV-04628-LHK, 2017 WL 86131, at *7 (N.D. Cal. Jan. 10, 2017) (“ as a matter of law it is not misleading or inaccurate to report a delinquent debt during the pendency of a bankruptcy”); Nissou-Rabban v. Capital One Bank (USA), N.A., No. 15CV1675 JLS (DHB), 2016 WL 4508241, at *3 (S.D. Cal. June 6, 2016) (while “otherwise accurate negative credit reporting is not retroactively made inaccurate because a bankruptcy petition later discharged the debt”). However, reporting a debt as delinquent without also noting that the debt is the subject of a pending bankruptcy may be misleading, and therefore actionable as an actual inaccuracy. See Nissou-Raban, 2016 WL 4508241 at *5 (failure to report pendency of bankruptcy consistent with industry-standard format while reporting a debt as charged off may “prompt those making credit decisions to draw a more negative inference” and therefore be misleading); Cristobal v. Equifax, Inc., No. 16-CV-06329-JST, 2017 WL 1489274, at *5 (N.D. Cal. Apr. 26, 2017) (finding plaintiff stated a claim for inaccuracy where credit line did not report that debt was subject to pending bankruptcy in accordance with Metro 2 codes, “even if her credit report otherwise noted the fact of her bankruptcy”); Doster v. Experian Info. Sols., Inc., No. 16-CV-04629-LHK, 2017 WL 264401, at *5 (N.D. Cal. Jan. 20, 2017) (“Nissou-Raban stands for the proposition that a furnisher that reports delinquent debts during the pendency of a bankruptcy should also report the fact that a bankruptcy is pending so that creditors know that those delinquent debts may be discharged in the future”).  Plaintiffs allege inaccuracies based upon accounts reporting balances as “charged off,” bad debt, or in collections without noting that the account was included in their bankruptcy proceedings. Mamisay alleges that Experian and Equifax listed a Citigroup account as being charged off or bad debt without indicating it was included in the bankruptcy. (CAC at ¶¶ 82, 83.)⁴Likewise, King alleges that her credit report listed her TD Bank account as charged-off with no notation regarding a bankruptcy filing as to that account.⁵ (Id. at ¶¶ 90, 93-95.) Petrie alleges that three trade lines were all noted as bad debts placed for collection and charged off without any notation of his bankruptcy filing. (Id. ¶¶ 111, 112, 113.) These allegations are sufficient to state the basis for an actionable inaccuracy.  Defendants contend that omitting the notation that a particular account is included in a bankruptcy does not make a credit report misleading, citing two decisions from this district, neither of which assists them. The court in In re Experian Info rejected an argument, raised for the first time at oral argument on the motion to dismiss, indicating that it had been shown no basis in the law for insisting that a bankruptcy notation accompany the account information as a line item. In re Experian Info. Sols. Credit Reporting Litig., No. C 16-05674 WHA, __ F.Supp.3d. __, 2017 WL 1319843, at *1 (N.D. Cal. Mar. 28, 2017). However, the brief decision in In re Experian Info gives no indication that credit report at issue included some accounts with a bankruptcy notation and others without, as here. Defendants’ citation to Mestayer is even farther afield. Mestayer v. Experian Info. Sols., Inc, No. 15-CV-03645-EMC, 2016 WL 7188015, at *3 (N.D. Cal. Dec. 12, 2016). There, the creditor there was alleged to have disclosed the bankruptcy along with the pending debt, leading the court to find that simply failing to follow industry standards was not misleading or inaccurate. Id.  Plaintiff Petrie also alleges inaccuracies based on reporting debts as owed to the incorrect creditor, and reporting incorrect amounts listed as due or past due when they had been paid in full. Petrie alleges that he disputed these tradelines and requested the creditors refer to the bankruptcy correctly, but the accounts were not updated. (CAC ¶¶ 114, 115, 1116, 118, 119, 122, 124, 128, 129, 130.) These alleged errors in Petrie’s credit report likewise state actual inaccuracies.