A recent decision from the United States District Court for the Eastern District of Virginia highlights the limits of the Fair Credit Reporting Act (FCRA) in addressing disputes that hinge on complex legal and factual questions. The plaintiffs, who financed a vehicle through TD Auto Finance, became embroiled in a credit reporting controversy after a car dealership mistakenly paid off their auto loan. Although the dealership’s payoff was accepted and the loan was marked as closed and paid in full, TD later refunded the payoff to the dealership and reported the account as delinquent and charged off, despite the plaintiffs’ assertion that they were never late on payments and were unable to make further payments after the account was closed.
The plaintiffs disputed the negative reporting with the credit bureau, providing documentation and explanations. Equifax, the credit reporting agency, conducted reinvestigations but ultimately declined to delete the account until months later. Meanwhile, TD initiated a separate state court action against the plaintiffs for breach of contract, seeking payment of the loan balance.
Court’s Analysis
Plaintiffs brought suit against Equifax under FCRA, alleging failures in reasonable reinvestigation and procedures to assure maximum possible accuracy. The court, applying the standard for judgment on the pleadings, focused on whether the alleged inaccuracies in the credit report were “objectively and readily verifiable”—a threshold requirement for FCRA claims.
The court found that the dispute was not simply about a factual error, but rather involved complex legal questions, such as whether the plaintiffs remained obligated to pay the loan after the mistaken payoff and subsequent refund, and whether TD was permitted to report the account as delinquent and charged off. These issues, the court noted, are the subject of ongoing litigation and arbitration between the parties and require “complex fact-gathering and in-depth legal analysis” beyond the scope of a credit reporting agency’s responsibilities under the FCRA.
the definition of inaccuracy excludes factual and legal disputes that are not “objectively and readily verifiable,” which must be the threshold consideration in determining whether a furnisher’s duties are triggered. Roberts v. Carter-Young, Inc., 131 F.4th 241, 250, 253 (4th Cir. (Dalton definition of “inaccuracy” does not address the question of whether disputes that raise legal questions fall inside or outside the purview of the FCRA”); see also id. at 252 (“a plaintiff alleging a violation of a furnisher’s obligation to reasonably investigate indirect disputes must allege facts that, if true, show that her credit report contained inaccurate or incomplete information. Those factual allegations must also show that the inaccuracy or incompleteness is objectively and readily verifiable by the furnisher”) (emphasis added). Roberts did not address CRAs, but its holding must also apply to CRAs’ duties with at least the same force. See Roberts, 131 F. 4th at 250 & n.6 (citing Sessa v. Trans Union, 74 F. 4th 38, 42 (2d Cir. 2023) and Mader v. Experian Info. Sols. Inc., 56 F. 4th 264, 269 (2d Cir. 2023), involving CRAs, with approval)5; Reyes v. Equifax Info. Servs., LLC, 140 F. 4th 279, 288–89 (5th Cir. 2025) (“objectively verifiable” standard applied to CRA); Gross v. CitiMortgage, Inc. 33 F. 4th 1246, 1253 (9th Cir. 2022) (furnisher’s investigatory obligation “will often be more extensive and thorough” than CRAs, which are “third parties that lack any direct relationship with the consumer, so they must rely on the representations of the furnishers who usually own the debt”).
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The undisputed claimed inaccuracy here is Defendant’s reporting of Plaintiff’s TD account being closed and delinquent under the circumstances. This inaccuracy invokes both legal (e.g., fundamentally, did Plaintiffs still have the obligation to pay under prevailing federal and state law?) and factual determinations (e.g., was there in fact a way for Plaintiffs to pay the loan after the account was mistakenly closed?)6. Plaintiff’s central argument is that it is obvious that Plaintiffs had no obligation to pay after the mistake, TD had no obligation to refund the payoff on the dealer’s “ask,” and that TD voluntarily and “unilaterally” chose to refund the dealer at its own peril (ECF 14 at 10)—but none of this is so clear as to elevate Plaintiff’s contentions above a legal defense to payment of their debt, which is “generally not the kind of error that a CRA could discover or resolve through a review of information from consumers, furnishers, or its own files.”7 Sperry, 2019 WL 332813, at *5; see e.g., Ziyadi v. Deserve, Inc., 2025 WL 1899425, at *5 (D. Md. July 9, 2025) (“As this Court and the Fourth Circuit have consistently held, CRAs have no obligation to resolve such legal disputes between a consumer and a creditor[.]”); Saunders v. Branch Banking and Trust Co. of Va., 526 F. 3d 142, 150 (4th Cir. 2008) (“Claims brought against CRAs based on a legal dispute of an underlying debt raise concerns about ‘collateral attacks’ because the creditor is not a party to the suit”). The issues clearly require “complex fact-gathering and in-depth legal analysis of the sort that courts would typically perform” which is beyond the responsibility of Defendant and which is indeed underway in state court and arbitration proceedings currently. Roberts, 131 F. 4th at 251.
ALICIA MCFADDEN, ET AL, v. EQUIFAX INFORMATION SERVICES, LLC, et al., No. 1:25-CV-1087-MSN-WBP, 2025 WL 3503039 (E.D. Va. Oct. 27, 2025).
