In a recent decision, a Michigan district court found that because there was a genuine issue of fact as to whether the defendant debt collector notified the consumer reporting agency (CRA) to remove a disputed debt notification from the plaintiff’s tradeline, the case could proceed to trial.

In Evans v. Merchants and Medical Credit Corp., the plaintiff received a letter from the defendant attempting to collect on an unpaid debt. The plaintiff provided notice to the defendant that the debt was disputed. The following year, when the plaintiff attempted to obtain a home equity loan the dispute flag on her consumer report caused her application to be denied. The plaintiff’s attorney then informed the defendant that the plaintiff no longer disputed the account.

The defendant removed the dispute flag from the plaintiff’s account in its system, but the debt continued to be reported as disputed by the CRA. The CRA’s records showed that it had not received a request from the defendant to remove the code from the tradeline.

The plaintiff filed a lawsuit against the defendant in the District Court for the Eastern District of Michigan, alleging violations of the Fair Debt Collection Practices Act (FDCPA), and other state statutory claims.

The plaintiff filed for summary judgment, and the defendant counter-filed a motion to dismiss or, in the alternative, for summary judgment. Because the court found that there was a genuine issue of fact as to whether the defendant notified the CRA to remove the dispute notification, the court denied both motions, finding that “both sides have offered sufficient evidence upon which a reasonable jury could find in their favor.” The court went on, “whether [the defendant’s] procedures are reasonably adapted to avoid the error that occurred here is a question of fact for the jury to decide.”

The defendant also argued that the plaintiff lacked standing to sue; however, the court found that the denial of her home equity loan application was a sufficient injury to confer standing.

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