Abdallah v. LexisNexis Risk Solutions FL Inc. et al

Filing 35

MEMORANDUM AND ORDER: For the reasons set forth above, LexisNexis's motion to dismiss is granted with respect to Claims Two, Four, and Five and denied with respect to Claims One and Three. Chex's motion to dismiss is granted with respect t o Claims Two, Four, and Five and denied with respect to Claims One and Three. This matter is recommitted to Magistrate Judge Scanlon for pre-trial supervision, including settlement discussion, as appropriate. Ordered by Judge Roslynn R. Mauskopf on 3/30/2021. (Taronji, Robert)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
-----------------------------------------------------------------X
ABRAHAM ABDALLAH,
Plaintiff,

MEMORANDUM AND
ORDER
19-CV-3609 (RRM) (VMS)

- against LEXISNEXIS RISK SOLUTIONS FL INC.,
CHEX SYSTEMS, INC.,
Defendants.
-----------------------------------------------------------------X
ROSLYNN R. MAUSKOPF, United States District Judge.

Plaintiff Abraham Abdallah brings this action against defendants LexisNexis Risk
Solutions FL, Inc. (“LexisNexis”) and Chex Systems, Inc. (“Chex”), alleging failure to
investigate or cure erroneous consumer credit reports, in violation of the Fair Credit Reporting
Act (“FCRA”), 15 U.S.C. § 1681 et seq.; New York Fair Credit Reporting Act (“NYFCRA”),
N.Y. Gen. Bus. Law § 380 et seq.; and N.Y. Gen Bus. Law § 349. (Am. Compl. (Doc. No. 21).)
Both defendants separately move to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). (Notice of
Motion (Doc. Nos. 29, 30).) For the reasons stated below, LexisNexis’s motion is granted in part
and denied in part and Chex’s motion is granted in part and denied in part.
BACKGROUND
The following facts are drawn from Abdallah’s Amended Complaint and are assumed to
be true for the purpose of this Memorandum and Order. LexisNexis provides reports for
financial institutions through its Accurint program, a reporting service that provides, among
other things, information about a consumer’s bankruptcy history; income and property
ownership; criminal history; purported personal associations and work history; and co-habitant,
neighbor, and neighborhood data. (Am. Compl. ¶ 29.)

1

Sometime in 2014, Abdallah applied for and was denied a mortgage based on information
contained in an Accurint report. (Id. ¶ 30.) Abdallah obtained a copy of the Accurint report,
which he discovered was filled with inaccurate and false information. (Id. ¶ 31.) He then
contacted LexisNexis by phone in an attempt to address this problem. (Id.) In a follow-up letter
sent from LexisNexis to Abdallah on June 10, 2014, LexisNexis told Abdallah that the erroneous
information in his Accurint report had come from all three credit bureaus, meaning Equifax,
Experian, and TransUnion. (Id.) LexisNexis advised Abdallah to contact those companies
directly. (Id.) When he did so, Abdallah learned that the reports from those three credit bureaus
did not, in fact, contain the inaccuracies found in the Accurint report. (Id.)
On July 8, 2014, Abdallah wrote to LexisNexis to dispute the contents of his Accurint
report. (Id. ¶ 32.) He notified LexisNexis that the Accurint report was filled with misspelled and
incorrect names, social security numbers, and addresses. He complained that three different
mortgage companies had used the information in the report to deny his application despite his
excellent credit. (Id.) Abdallah specifically asked LexisNexis to delete all of the incorrect
information, misspelled and incorrect names, and incorrect addresses and phone numbers. (Id.)
In an attempt to help LexisNexis rectify the errors, Abdallah enclosed with his letter an annotated
copy of the Accurint report, noting everything that was incorrect and which he demanded be
removed. (Id. ¶ 33.) He also confirmed that he did not use any other names but his own,
Abraham A. Abdallah, and used only his own social security number and address, which he
provided. (Id.) He also furnished LexisNexis with summary pages of reports prepared by
Equifax, Experian, and TransUnion, showing that the false Accurint information did not
originate with them. (Id.)

2

On July 24, 2014, LexisNexis responded, again stating that the incorrect information in
the 2014 Accurint report was attributable to the three credit bureaus. (Id. ¶ 34.) LexisNexis also
stated in its response that it is not a Consumer Reporting Agency and is not governed by the Fair
Credit Reporting Act; consequently, it could not and would not correct or change the erroneous
information in Abdallah’s Accurint report. (Id.)
After “numerous banks” relied upon the Accurint report when refusing to open accounts
for Abdallah, he again contacted LexisNexis by letter on January 5, 2015. (Id. ¶ 36.) Abdallah
wrote to LexisNexis to request a copy of his current Accurint report and to dispute the inaccurate
identifying information contained therein. (Id.) He provided LexisNexis with the proper
spelling of his name and his correct address and insisted that LexisNexis delete all the other
incorrect addresses and remove all the names on the report other than his own. (Id.)
On or about February 3, 2015, Lexis Nexis responded to Abdallah’s letter by denying that
it is a Consumer Reporting Agency and asserting that federal law does not require LexisNexis to
correct inaccurate information. (Id. ¶ 37.) As part of its response, LexisNexis also provided
Abdallah with a copy of his Accurint report dated February 3, 2015. (Id. ¶ 38.)
This Accurint Report contained numerous inaccuracies. For example, in a section titled
“names associated with subject” containing twenty-three different names, birthdays and social
security numbers, twenty were erroneous. In a section titled “others associated with subject
SSN” containing seven different listed names, birthdates, and social security numbers, five were
inaccurate and misidentified Abdallah for his brother Ahamad or other unknown individuals. A
section titled “address summary” contained twenty-seven different addresses, but Abdallah had
never resided at twenty-five of them. Similarly, a section titled “previous and non-verified
addresses” contained twenty-four addresses and P.O. Boxes, eighteen of which Abdallah had

3

never used. A section titled “possible associates” contained eighteen different individuals with
whom Abdallah was allegedly associated, seventeen of whom Abdallah did not know or
associate with. (Id. ¶ 38.)
In a subsequent letter dated February 2, 2016, Abdallah again wrote to LexisNexis
disputing the inaccurate information contained in the Accurint report. (Id. ¶ 39.) In this letter,
he stated that he was having problems opening bank accounts with financial institutions because
of the Accurint report. (Id.) He again enclosed a letter highlighting the incorrect information
included in the report, as well as a copy of his driver’s license and social security card, with a
demand for the immediate removal of the incorrect information he had identified. (Id. ¶ 40.)
On or about March 21, 2016, LexisNexis responded to Abdallah by reiterating that
LexisNexis is not a Consumer Reporting Agency and it would not verify or correct inaccurate
information. (Id. ¶ 41.) LexisNexis also provided Abdallah with a new copy of his Accurint
report, dated March 21, 2016. This report contained new and different inaccuracies. For
example, a section titled “names associated with subject” containing eighteen different listed
names, birthdates, and social security numbers, fourteen of which were inaccurate. Among the
names listed was “ABRAHAM ABDALLADELETETRADE.” In a section titled “others
associated with subject SSN” containing nine different names, birthdates, and social security
numbers, eight names were inaccurate. Among the names listed was his brother’s: Ahamad. In
a section titled “address summary” containing twenty-five addresses and P.O. Box listings and
alleged dates when Abdallah lived there or used them, twenty of the addresses were inaccurate.
Similarly, a section titled “active addresses” listed no home address, even though Abdallah lives
in a home in Brooklyn, and twenty of the twenty-five different addresses and P.O. Boxes listed
in a section titled “previous and non-verified addresses” were inaccurate. (Id. ¶ 42.) This last

4

section listed as one of his previous addresses a jail cell in the Riker’s Island adolescent unit
which had housed a different individual, Abrihim A. Abdallah, in the 1980s; Abdallah has no
criminal record. (Id.)
On or about April 1, 2016, LexisNexis sent Abdallah another letter responding to
Abdallah’s continued effort to dispute the contents of his Accurint reports, again stating that it is
not a Consumer Reporting Agency and it would not verify or correct inaccurate information. (Id.
¶ 43.) LexisNexis claimed in that letter that its erroneous address information was reported to
LexisNexis by the credit bureaus, voter registration records, and utility records, and directed
Abdallah to contact those sources in order to correct the Accurint report. (Id. ¶ 44.)
In June and July of 2016, Citibank closed nine accounts held by Abdallah and his wife,
Munna Ahmad. (Id. ¶ 45.) Abdallah alleges, on information and belief, that the bank closed the
accounts based on an Accurint report prepared by LexisNexis. (Id.) In September of 2016, Bank
of America closed three accounts held by Abdallah. Again, Abdallah alleges, on information
and belief, that Bank of America closed these accounts based on an Accurint report prepared by
LexisNexis. (Id. ¶ 46.)
On October 19, 2017, Bethpage Federal Credit Union refused to allow Abdallah to open a
Business Savings Account, a decision which Abdallah alleges, on information and belief, was
based on an erroneous credit report provided by Chex. (Id. ¶¶ 59–60.) On or about October 24,
2017, Abdallah filed a dispute with Chex by fax according to the policies and procedures stated
on the Chex website, asserting that he had recently been denied a bank account because his date
of birth was wrong on his Chex report. (Id. ¶ 60.) Abdallah provided Chex with a copy of his
driver’s license and his social security card and asked that Chex correct his date of birth. (Id.)

5

On November 11, 2017, Abdallah one more time wrote to LexisNexis to dispute the
inaccurate information in his Accurint report. (Id. ¶ 47.) He wrote that he was having difficulty
opening a checking account at local banks based on the erroneous report. He again provided his
social security number, date of birth, and address, and asked that any other information that did
not belong to him be removed from his Accurint report. (Id.)
On or about January 2, 2018, LexisNexis responded by once again claiming that
LexisNexis is not a Consumer Reporting Agency and that federal law does not require it to
correct inaccurate information contained in Accurint reports. (Id. ¶ 48.) As before, LexisNexis
provided Abdallah with a new copy of his Accurint report, dated January 2, 2018. (Id. ¶ 49.)
This report contained new and different inaccuracies, including but not limited to: incorrectly
identifying Abdallah as being eighty years old; a section titled “others associated with subjects
SSN” containing twenty-five listed names, birthdates, and social security numbers, fourteen of
which were inaccurate; misidentifying Abdallah as his brother Ahamad; a section titled “address
summary” containing six addresses and P.O. Boxes, two of which were inaccurate; not listing a
home address for Abdallah, despite the fact that he lives in a home in Brooklyn; and a section
titled “previous and non-verified addresses” containing six addresses and P.O. Boxes, two of
which he had never used. (Id.) LexisNexis also provided Abdallah with a Benefit Consumer
Disclosure Report dated January 3, 2018, which also contained inaccurate listings that misspelled
Abdallah’s name or contained the wrong social security number. (Id. ¶ 50.)
On January 26, 2018, Abdallah notified LexisNexis that the Benefit Consumer Disclosure
Report contained inaccurate information, including misspelled names, incorrect addresses, and
social security numbers. He once again enclosed a copy of his driver’s license and requested the

6

incorrect information be removed from the report. (Id. ¶ 51.) As of the date of filing,
LexisNexis had not replied to this request. (Id. ¶ 52.)
Subsequently, Abdallah attempted to open a savings account with Transportation Federal
Credit Union. (Id. ¶ 62.) On March 12, 2018, Transportation Federal Credit Union denied his
application for an account on the basis of a Chex report that stated that Abdallah’s reported
address is not a residential address, that his social security number was linked to other
individuals, and that an Extended Fraud Alert had been placed on his credit report. (Id. ¶ 63.)
Abdallah has never placed a fraud alert or credit freeze on his Chex report. (Id. ¶ 64.) Abdallah
complained multiple times by telephone to Chex that his Chex report contained errors, that he
had not placed a fraud alert or credit freeze on his Chex report, and asked that any such alert or
freeze be removed. (Id. ¶ 65.)
In a letter dated April 12, 2018, Abdallah continued to pursue corrections to the errors in
his Accurint report, again filing a dispute with LexisNexis requesting they correct the errors in
his Accurint report and enclosing a copy of his driver’s license and social security card. (Id. ¶
53.) On May 9, 2018, LexisNexis asserted that the report was based on information from credit
bureaus, courts, boat registration and property records, and the U.S. Coast Guard, and that
Abdallah needed to reach out to these sources with questions about the underlying data. (Id. ¶
54.) Abdallah had already established that the incorrect data did not come from the credit
bureaus, has never registered a boat, and has no relationship with the U.S. Coast Guard. (Id.)
On October 12, 2018, Abdallah attempted to open an account with Justice Federal Credit
Union. (Id. ¶ 67.) On October 30, 2018, the credit union denied his application because it was
unable to verify Abdallah’s identification based on reports from Chex and from Equifax. (Id. ¶

7

68.) Abdallah filed a request for reconsideration of the denial on November 5, 2018, which was
again rejected for the same reason on November 7, 2018. (Id. ¶ 69.)
The Amended Complaint
Abdallah asserts five causes of action against Defendants. His first two causes of action
are brought under the FCRA. First, he alleges that Defendants willfully failed to conduct a
reasonable investigation in violation of 15 U.S.C. § 1681i. (Id. ¶¶ 78–82.) Second, he alleges
that Defendants willfully failed to implement or follow reasonable procedures to assure
maximum possible accuracy of their reports, in violation of 15. U.S.C. § 1681e(b). (Id. ¶¶ 83–
87.) His third and fourth causes of action, respectively, bring parallel claims under the NYFCRA
for willful failure to properly investigate in violation of N.Y. Gen. Bus. Law § 380-f and willful
failure to establish or follow reasonable procedures in violation of N.Y. Gen. Bus. Law § 380-j.
(Id. ¶¶ 88–95.) Finally, in his fifth cause of action, Abdallah asserts that Defendants engaged in
deceptive acts and practices in the conduct of their business, in violation of N.Y. Gen. Bus. Law
§ 349. Abdallah asserts that as a result of Defendants’ conduct, he has suffered damages in the
form of financial harm and dignitary harm from the injury to his credit rating and reputation;
inability to access credit, banking, and insurance; deprivation of economic activity; and inability
to open or maintain consumer banking and credit accounts. He seeks actual and punitive
damages, and, for his claims brought under New York law, injunctive and declaratory relief. (Id.
¶ 108.)
The Instant Motions
Each defendant now separately moves to dismiss the Amended Complaint pursuant to
Rule 12(b)(6). The Court will summarize each motion in turn.

8

In its motion to dismiss, LexisNexis first argues that Abdallah’s FCRA and NYFCRA
claims should be dismissed because Abdallah failed to plead sufficient facts to show that
LexisNexis violated the law. (LexisNexis Mot. (Doc. No. 30-1) at 11–17.) According to
LexisNexis, the Amended Complaint contains no allegations regarding “who ordered the reports,
when and where each” event occurred, what injury Abdallah suffered, the procedures LexisNexis
used to gather that information, “how those procedures failed to comply with the FCRA, or how
it lacked such procedures.” (Id. at 13–14.) Further, LexisNexis notes that Abdallah has failed to
allege either willfulness or negligence. (Id. at 15.) LexisNexis also asserts that Abdallah’s
pleadings fail to demonstrate that Accurint reports are consumer reports or that LexisNexis is a
consumer reporting agency. (Id. at 15–17.) Moreover, the FCRA and NYFCRA impose a twoyear statute of limitations, which begins to run at the time a plaintiff discovers the violation; that
statute of limitations has now run. (Id. at 19–21.) Finally, LexisNexis asserts that Abdallah’s §
349 claim should be dismissed because Abdallah does not sufficiently plead that the disputed
acts were consumer-oriented or had broad impact. (Id. at 17–19.)
In response, Abdallah argues that the Amended Complaint contains more than enough
detail to state claims under the FCRA and NYFCRA. (Abdallah’s LexisNexis Resp. (Doc. No.
30-2) at 9–16.) Further, Abdallah argues he has plausibly alleged facts to support an inference of
both negligence and reckless disregard in the failure to correct his Accurint report. (Id. at 16–
21.) Abdallah also asserts that the Amended Complaint sufficiently alleges that Accurint reports
are consumer reports and that LexisNexis is a Consumer Reporting Agency, and argues that
LexisNexis may not escape liability solely based on the disclaimers on its websites. (Id. at 21–
25.) Moreover, Abdallah asserts that because each re-report of inaccurate information in the
Accurint reports is a separate violation with a separate statute of limitations period, and because

9

LexisNexis is estopped from asserting an FCRA statute of limitations if it insists it is not covered
by the FCRA, the claims are not time-barred. (Id. at 25–27.) Finally, Abdallah states that he has
properly pled his § 349 claim because LexisNexis’s misrepresentations about Abdallah’s
personal information are replicable and put a large number of consumers at risk of similar harm.
(Id. at 27–30.)
In its motion, Chex first argues that Abdallah has failed to state a claim under § 1681i of
the FCRA. Chex argues that Abdallah’s attempt to open a Business Savings Account cannot
form the basis for an FCRA claim because it was a business transaction. (Chex’s Mem. (Doc.
No. 29-1) at 7.) Further, Chex claims it only had a duty to conduct an investigation concerning
Abdallah’s incorrect birthdate, as this was the only specific information Abdallah disputed with
Chex. (Id. at 7–8.)
Next, Chex argues that Abdallah failed to state a claim under § 1681e(b) because he
alleges no fact to demonstrate that Chex failed to implement or follow reasonable procedures.
(Id. at 8–9.) Similarly, due the same deficiencies in Abdallah’s pleadings, Chex asserts that
Abdallah has failed to plead sufficient facts in furtherance of his NYFCRA claims. (Id. at 9.)
Moreover, Chex argues that Abdallah’s FCRA and NYFCRA claims should be dismissed for
failure to allege that Chex acted willfully or negligently under either statute. (Id. at 10–11.)
Finally, Chex asserts that Abdallah has failed to state a claim under § 349 because he has failed
to allege that the actions that form the basis of his complaint are consumer-oriented. (Id. at 11–
12.)
In his response, Abdallah argues that Chex had an obligation to investigate not only the
incorrect birth date in his original complaint, but also all the incorrect information he reported to
them in his subsequent complaints. (Abdallah Chex Resp. (Doc. No. 29-2) at 11–12.) Further,

10

Abdallah claims it is irrelevant that his initial dispute arose from an application for a business
account, as the only inquiry required to determine whether the FCRA applies is whether the
disputed report was compiled and intended to be used for a credit-related purpose as set forth
under that statute. (Id. at 7–11.) Abdallah asserts that his allegations that Chex reported
inaccurate information, even after it was notified that its report contained errors, is sufficient to
state a claim for failure to implement or follow reasonable procedures at the motion to dismiss
stage. (Id. at 13–17.) Additionally, Abdallah claims he has satisfied the pleading standards for
both negligence and willfulness because such mental states can be inferred from the failure to
reinvestigate a credit report after complaints of its inaccuracy. (Id. at 18–19.) Finally, Abdallah
argues that § 349 is a broad provision covering a wide range of economic activity, including
credit checks. (Id. at 20.)
In its reply, Chex largely stands upon its prior briefing, with the addition of explaining
that the disputed credit freeze placed upon Abdallah’s Chex account could only have been placed
there by Abdallah himself. Chex argues that this is not in itself information about a consumer
but rather a restriction on sharing information about a consumer, so it is not covered by § 1861i.
(Chex Reply (Doc. No. 29-3) at 7–9.)
STANDARD OF REVIEW
Rule 12(b)(6) of the Federal Rules of Civil Procedure permits a party to move to dismiss
a cause of action that “fail[s] to state a claim upon which relief can be granted.” In evaluating a
Rule 12(b)(6) motion, the Court assumes the truth of the facts alleged in the nonmovant’s
pleading and draws all reasonable inferences in the nonmovant’s favor. See Harris v. Mills, 572
F.3d 66, 71 (2d Cir. 2009). Although all factual allegations contained in the complaint are
assumed to be true, this tenet is “inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S.

11

662, 678 (2009). In all cases a plaintiff’s complaint must include “enough facts to state a claim
to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A
claim has facial plausibility when the plaintiff pleads factual content that allows the court to
draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556
U.S. at 663 (citing Twombly, 550 U.S. at 570). When ruling on a motion to dismiss under Rule
12(b)(6), the Court may consider only the “facts stated on the face of the complaint and in
documents appended to the complaint or incorporated in the complaint by reference, as well as
matters of which judicial notice may be taken.” Hertz Corp. v. City of New York, 1 F.3d 121,
125 (2d Cir. 1993).
DISCUSSION
I.

LexisNexis
a. Whether LexisNexis is covered by the FCRA and NYFCRA
The FCRA regulates “consumer reporting agencies” in their preparation and

dissemination of “consumer reports.” See, e.g., 15 U.S.C. § 1681b (defining circumstances
under which a consumer reporting agency may issue a consumer report); id. § 1681e
(establishing procedures for disseminating consumer credit information); id. § 1681i (designating
procedures for resolving disputes with consumers). The FCRA imposes civil liability upon users
and consumer reporting agencies that willfully or negligently violate the statute. Id. §§ 1681n,
1681o. Under the FCRA,
The term “consumer reporting agency” means any person which, for monetary
fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in
part in the practice of assembling or evaluating consumer credit information or
other information on consumers for the purpose of furnishing consumer reports to
third parties ….

12

15 U.S.C. § 1681a; see also N.Y. Gen. Bus. Law § 380-a(e) (giving an identical definition for
consumer reporting agencies under the NYFCRA). In determining whether an entity is a
consumer reporting agency, “a court must look to the totality of circumstances — in particular,
to the actual ‘activities of [the] company’ — to determine whether it regularly assembles
information ‘for the purpose of regularly furnishing consumer reports to third parties.’” Kidd v.
Thomson Reuters Corp., 299 F. Supp. 3d 400, 407 (S.D.N.Y. 2017), aff’d, 925 F. 3d 99 (2d Cir.
2019) (citing FTC, Advisory Opinion to LeBlanc (June 9, 1998), available at http://www.ftc.gov
/os/statutes/fcra/leblanc.shtm.).
A “consumer report” is defined as
any written, oral, or other communication of any information by a consumer
reporting agency bearing on a consumer’s [creditworthiness], credit standing,
credit capacity, character, general reputation, personal characteristics, or mode of
living which is used or expected to be used or collected in whole or in part for the
purpose of serving as a factor in establishing the consumer’s eligibility for—
(A) credit or insurance to be used primarily for personal, family, or
household purposes;
(B) employment purposes; or
(C) any other purpose authorized under section 604.
15 U.S.C. § 1681a; see also N.Y. Gen. Bus. Law § 380-a(c). “Courts recognize that the first
element of the FCRA’s definition of consumer report . . . does not seem very demanding, for
almost any information about consumers arguably bears on their personal characteristics or mode
of living.” Adams v. LexisNexis Risk & Info. Analytics Grp., Inc., 08-CV-4708 (RMB) (KW),
2010 U.S. Dist. LEXIS 47123, at *17 (D.N.J. May 12, 2010) (internal quotations omitted).
Second, “[c]ourts consider both the purpose for which the information contained in the report
was used or expected to be used or collected, as well as how a third party actually used the
information, when determining whether a document qualifies as a consumer report under the
Act.” Id. at *19 (citing 15 U.S.C. § 1681a(d)(1) and collecting cases).

13

Here, Abdallah pleads sufficient facts to plausibly allege that LexisNexis is a consumer
reporting agency and the Accurint Reports are consumer reports within the meaning of the
statute. Abdallah alleges that LexisNexis collects voluminous data regarding consumers’ credit
history, known associates, past addresses, criminal records, aliases, and many other kinds of
information – all data which bears upon consumers’ personal characteristics and mode of living –
and transmits that information in Accurint reports that it supplies to, among others, banks and
credit unions. He further alleges that these reports were used, and were intended to be used, by
numerous banks and credit unions to close his accounts or to deny him loans or accounts based
on the information contained therein. These allegations, if true, are sufficient to plausibly allege
that the Accurint reports were consumer reports and LexisNexis is a consumer reporting agency.
In arguing that it is not governed by either the FCRA or the NYFCRA because it is not a
consumer reporting agency and the Accurint reports are not consumer reports, LexisNexis points
to its website, which contains disclaimers stating that the Accurint reports are not intended to be
consumer reports and may not be used as a factor in determining eligibility for credit, insurance,
employment, or any other impermissible purpose under the FCRA. (LexisNexis Mot. at 15–17.)
These disclaimers are not dispositive and are not sufficient to warrant dismissal. See Kidd, 299
F. Supp. 3d at 406 (“disclaimers alone are not enough for an entity that otherwise [may qualify]
as a CRA to avoid the reach of the statute.”).
b. Statute of Limitations
The FCRA and the NYFCRA contain identical statutes of limitations, which are triggered
by the earlier of (i) two years from the date the plaintiff discovers the violation, see 15 U.S.C. §
1681p(1), or (ii) five years from the date of the violation, see 15 U.S.C. § 1681p(2); see also
N.Y. Gen. Bus. Law § 380-n. Courts measure this two-year period from the date the plaintiff

14

discovered “all of the material facts necessary to identify a violation,” not when the plaintiff
discovered that those facts constituted a legal violation. Trans Union LLC v. Lindor, 393 F.
App’x 786 at *3–4 (2d Cir. 2010) (summary order). However, “each alleged failure of
[d]efandant[] to comply with [its] FCRA obligations constitutes a separate FCRA violation, even
though the violations stem from the same allegedly false or inaccurate credit information.”
Jenkins v. Chase Bank USA, N.A., 14-CV-5685 (SJF) (AKT), 2015 U.S. Dist. LEXIS 109723, at
*19 n.6 (E.D.N.Y. Aug. 19, 2015) (collecting cases). Abdallah filed the instant action on June
19, 2019. (Compl. (Doc. No. 1).) Accordingly, the statute of limitations bars any claims brought
under the FCRA or the NYFCRA arising from events that occurred prior to June 19, 2017.
c. FCRA and NYFCRA Claims
Under the FCRA, a plaintiff may bring a private action for the negligent, see 15 U.S.C. §
1681o, or willful, see 15 U.S.C. § 1681n, violation of the duties or requirements imposed by the
statute. Abdallah alleges that LexisNexis willfully failed to conduct a reasonable investigation in
violation of 15 U.S.C. § 1681i, and willfully failed to implement or follow reasonable procedures
to assure maximum possible accuracy of their reports, in violation of 15 U.S.C. § 1681e(b).
(Am. Compl. ¶¶ 78–87.) He brings identical claims under the NYCFRA. “The provisions of the
NYFCRA are essentially identical to those of the FCRA, and have been construed using the
same standards applicable to the federal act.” Whelan v. Trans Union Credit Reporting Agency,
862 F. Supp. 824, 829 n.6 (E.D.N.Y. 1994).
i. Reasonable Reinvestigation
Section 1681i(a) of the FCRA provides, in relevant part, that when a consumer disputes
the accuracy of an item on his credit report, and directly notifies the credit reporting agency of
that dispute, the agency shall “free of charge, conduct a reasonable reinvestigation to determine

15

whether the disputed information is inaccurate and record the current status of the disputed
information, or delete the item from the file … before the end of the 30-day period beginning on
the date on which the agency receives the notice of the dispute from the consumer or reseller.”
15 U.S.C. § 1681i(a)(1)(A). This statutory duty is triggered “only by direct requests from
consumers.” Podell v. Citicorp Diners Club, 112 F.3d 98, 104 (2d Cir. 1997). Section 1681i
governs disputes regarding “the completeness or accuracy of any item of information contained
in a consumer’s file at a consumer reporting agency.” Id.
Here, Abdallah wrote to LexisNexis on November 11, 2017, and on April 12, 2018,
disputing the names, addresses, and social security numbers that had been reported in his
Accurint report and requesting it be corrected. To aid in the correction of his file, Abdallah
enclosed with each of these writings his social security number, date of birth, and address.
However, LexisNexis responded to these letters – in the case of the first response, outside the 30day period set forth by the statute – by denying that it had any obligation to correct the disputed
information. LexisNexis also responded to Abdallah’s 2017 dispute by sending both a new copy
of his Accurint report and a Benefit Consumer Disclosure Report, both of which were riddled
with errors, including erroneous names, addresses, and social security numbers. These facts
plausibly state a claim for willful failure to reinvestigate or delete incorrect information, in
violation of U.S.C. § 1681i(a) and N.Y. Gen. Bus. Law § 380-f.
ii. Reasonable Procedures
Under § 1681e(b), “[w]henever a consumer reporting agency prepares a consumer report
it shall follow reasonable procedures to assure maximum possible accuracy of the information
concerning the individual about whom the report relates.” To state a claim under § 1681e(b), a
plaintiff must plead sufficient facts to show that “(1) the credit reporting agency was negligent

16

[or willful] in that it failed to follow reasonable procedures to assure the accuracy of its credit
report; (2) the credit reporting agency reported inaccurate information about the plaintiff; (3) the
plaintiff was injured; and (4) the credit reporting agency’s negligence proximately caused the
plaintiff’s injury.” Whelan, 862 F. Supp. at 829.
Here, there is nothing in the pleadings to show what injury, if any, Abdallah suffered
during the statute of limitations period. Though he alleges that he informed LexisNexis that he
had been having trouble opening bank accounts in his 2017 correspondence, he provides no
information about when he applied to these banks. The most recent injury he describes as a
result of an erroneous Accurint report is the closure of his bank accounts at Bank of America in
September 2016, which falls outside of the relevant statutory period. Accordingly, Abdallah has
failed to state a claim for failure to follow reasonable procedures under either the FCRA or the
NYFCRA.
d. Section 349 Claim
To state a claim under General Business Law § 349, “a plaintiff must allege that a
defendant has engaged in (1) consumer-oriented conduct that is (2) materially misleading and
that (3) plaintiff suffered injury as a result of the allegedly deceptive act or practice.” Koch v.
Acker, Merrall & Condit Co., 18 N.Y.3d 940, 941 (N.Y. 2012). Consumer-oriented conduct “is
defined as conduct that could affect similarly situated customers …. Although the plaintiff is not
required to allege a pattern of conduct or repetitive deceptive trade practices, [he] must allege a
broader impact on consumers at large.” Designers N. Carpet, Inc. v. Mohawk Indus., 153 F.
Supp. 2d 193, 198 (E.D.N.Y. 2001) (citing Oswego Laborers’ Local 214 Pension Fund v.
Marine Midland Bank, N.A., 85 N.Y.2d 20, 25–26 (N.Y. 1995)) (internal citations and quotation
marks omitted).). Private contract disputes do not fall within the ambit of § 349; an allegation

17

that misleading practices in a private contract “may mislead other members of the public” is not
sufficient to support a § 349 claim where “there is no indication of actual damage to the public as
a result.” Saul v. Cahan, 999 N.Y.S.2d 798 (N.Y. Sup. Ct. 2014), aff’d, 61 N.Y.S.3d 265 (2017).
Here, Abdallah fails to allege facts suggesting that the dissemination of his Accurint
report to various banks is consumer-oriented conduct within the meaning of § 349. Abdallah
asserts that LexisNexis collects information on “over 132 million individual consumers and
routinely furnishes reports to third-parties about these individuals, but as reflected in the
experiences of Plaintiff, has failed to establish quality control procedures or sufficient
mechanisms for reasonably investigating inaccurate information … Defendants’ conduct is of a
recurring nature and has a broad impact on consumers at large.” (Am. Compl. ¶¶ 103, 107.)
Abdallah cannot state a § 349 claim merely by extrapolating from his experiences disputing
inaccurate reports of personal information in order to assert that LexisNexis’s alleged conduct
actually had broader impact on consumers at large. Abdallah has therefore failed to state a claim
under § 349.
II.

Chex
Here, as above, Abdallah alleges that Chex willfully failed to conduct a reasonable

investigation in violation of 15 U.S.C. § 1681i, and willfully failed to implement or follow
reasonable procedures to assure maximum possible accuracy of their reports, in violation of 15
U.S.C. § 1681e(b). The elements of these claims are set forth in Section I.C., above.
a. Reasonable Reinvestigation
Here, Abdallah alleges that Chex provided a report to Bethpage Federal Credit Union that
contained an incorrect birth date, causing Abdallah’s application for a Business Savings Account
to be denied. Abdallah then filed a complaint with Chex, asking it to correct his birthdate, and

18

providing it with identification to enable that correction. Subsequently, Abdallah’s application
for an account at Transportation Federal Credit Union was denied due to other inaccuracies that
did not include Abdallah’s birth date, such as errors in his residential address, social security
number, and an incorrect report that a fraud alert had been placed upon his account. Though
Abdallah complained multiple times via telephone that “his Chex Systems report contained
errors” and that he had not placed a freeze on his account, Chex failed to correct the report.
These allegations are sufficient to state a claim under § 1681i. Abdallah identifies two
specific errors that he brought to Chex’s attention. First, Abdallah filed a dispute with Chex
regarding an inaccurate birthdate; he does not state in his Amended Complaint whether Chex
ever reported this error again after he disputed it, so this cannot form the basis of a § 1681i
claim. Second, Abdallah complained via telephone about the erroneous credit freeze on his
account, but this is not covered by Section 1681i. See Edeh v. Equifax Info. Servs., LLC, 919 F.
Supp. 2d 1006, 1012 (D. Minn. 2013) (“a security freeze is not itself information on a consumer,
but rather is a status notification that prevents the release of any information on a consumer.
Section 1681i, therefore, does not apply to disputes regarding the presence of a security freeze.”).
However, Abdallah also asserts that his Chex report contained multiple other errors, including
that his reported address is not a residential address and that his social security number was
linked to other individuals. (Am. Compl. ¶ 63.) Although Abdallah told Chex that his report
“contained errors” “multiple times by telephone,” Chex continued to generate erroneous reports,
and Abdallah was subsequently denied an account at Justice Federal Credit Union based on these
same errors. These facts plausibly state a claim for failure to reinvestigate or delete incorrect
information, in violation of § 1681i(a) and N.Y. Gen. Bus. Law § 380-f.

19

b. Reasonable Procedures
The standard for stating a claim for failure to follow reasonable procedures under the
FCRA and NYFCRA is set forth in Section I.C.ii, above. A credit reporting agency is not held
strictly liable under the FCRA merely for reporting inaccurate information; “rather, the consumer
must show that the agency failed to follow reasonable procedures in generating the inaccurate
report.” Whelan, 862 F. Supp. at 829. Abdallah asserts that Chex “has not undertaken any steps
to correct its data collection methods or check the accuracy of its data sources with respect to the
inaccuracies that appear on Mr. Abdallah’s Chex Systems report.” (Am. Compl. ¶¶ 71–72.)
This threadbare recitation, without more, cannot form the basis of a reasonable procedures claim.
Though Abdallah argues in his briefing that an allegation of repeated incorrect information
creates a plausible inference of failure to follow reasonable procedures, that is not the law in this
Circuit; the plaintiff bears the burden to show that the agency failed to follow reasonable
procedures in generating the report. The Amended Complaint contains no facts regarding the
procedure Chex used in generating its erroneous report. Accordingly, Abdallah has failed to
state a claim for failure to follow reasonable procedures against Chex.
c. Section 349 Claim
“In New York law, the term ‘consumer’ is consistently associated with an individual or
natural person who purchases goods, services or property primarily for ‘personal, family or
household purposes.’” Cruz v. NYNEX Info. Res., 263 A.D.2d 285, 289 (App. Div. 1st Dept.
2000) (quoting N.Y. General Business Law §§ 399-c, 399-p); see also Genesco Entm’t, Div. of
Lymutt Indus., Inc. v. Koch, 593 F. Supp. 743, 751 (S.D.N.Y. 1984) (“The typical violation
contemplated by the statute involves an individual consumer who falls victim to
misrepresentations made by a seller of consumer goods …”). Here, Abdallah fails to state a

20

claim under N.Y. Gen. Bus. Law § 349 because he has failed to allege that the dissemination of
his Chex report to banks is consumer-oriented. Though Abdallah alleges that “Chex Systems has
compiled information of 300 million individual consumers and routinely furnishes reports to
third-parties about these individuals (including over 80% of the banks in the United States),” this
wide-spread practice has no clear relation to consumer purchases of goods or services; this
arrangement between Chex and many major banks falls outside of the ambit of consumeroriented practices governed by § 349. Accordingly, this claim is dismissed.
CONCLUSION
For the reasons set forth above, LexisNexis’s motion to dismiss is granted with respect to
Claims Two, Four, and Five and denied with respect to Claims One and Three. Chex’s motion to
dismiss is granted with respect to Claims Two, Four, and Five and denied with respect to Claims
One and Three. This matter is recommitted to Magistrate Judge Scanlon for pre-trial
supervision, including settlement discussion, as appropriate.
SO ORDERED.
Dated: Brooklyn, New York
March 30, 2021

Roslynn R. Mauskopf
_______________________________
ROSLYNN R. MAUSKOPF
United States District Judge

21