May a consumer claim defamation against a furnisher of inaccurate credit information?

The following is a summary of a recent federal court ruling addressing this question:

In Longman v. Wachovia Bank, the Connecticut District Court held that the consumer's state law defamation claim was preempted by the Fair Credit Reporting Act (the "FCRA").  The consumer had alleged Wachovia defamed him by falsely reporting information to the consumer reporting agencies (the "CRAs") related to a three-year balloon lot note which he had obtained to finance a land purchase from Wachovia.  The Court found, among other things, that Section 1681t(B)(1)(F) of the FCRA expressly preempts the application of state law regarding any matters regulated by Section 1681s-2.  The Court reasoned that because the consumer alleged Wachovia reported this false information to the agencies, he was necessarily asserting a violation of Section 1681s-2, the Section of the FCRA which in part governs the reporting of information to the CRAs.

Therefore, according to this Connecticut District Court a consumer may not claim state law defamation against a furnisher of inaccurate credit information since that claim would be preempted by the FCRA.

HOWEVER, all is not lost. To sue a furnisher for reporting inaccurate information on your credit report, you simply need to dispute that information through the credit reporting agencies.  And then, if the inaccurate information is not corrected, you may file suit under the FCRA. 

Second Circuit Holds FCRA Preempts State Tort Claims

Macpherson v. JP Morgan Chase Bank, NA

Consumer alleged that Chase provided false information about his finances to Equifax, a consumer credit reporting agency. Chase removed the case to federal court and moved for dismissal under Fed.R.Civ.Pro. 12(b)(6), on the grounds that the consumer's claims were preempted by the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681t(b)(1)(F). Consumer appealed from the district court's dismissal of his state common law tort claims. The Second Circuit affirmed the judgment of the district court and held that the FCRA preempted consumer's state law claims against Chase.

Macpherson v. JPMorgan Chase