Losch: Forwarding a Dispute May Not Be Enough

Case: Losch v. Nationstar Mortgage LLC
Court: U.S. Court of Appeals for the Eleventh Circuit
Citation: No. 20-10695 (11th Cir. Apr. 28, 2021)
Decided: April 28, 2021
Bottom line: A credit bureau that only forwards a detailed dispute to the furnisher may not have done a reasonable reinvestigation, especially where public records could resolve it.

Background

Henry Losch filed for Chapter 7 bankruptcy in 2017. He initially reaffirmed his home mortgage, meaning he agreed to stay liable on it. But the trustee sold the house anyway, and the loan’s new servicer, Nationstar, began sending past-due notices. The bankruptcy court then allowed Losch to rescind the reaffirmation, so the mortgage debt was discharged.

His Experian report still showed a Nationstar mortgage with a balance of $139,853, a past-due amount of $10,006, and payments more than 180 days late. In June 2018 he wrote to Experian, gave the account number, explained that the mortgage was discharged in his 2017 Chapter 7 case, and said the court had approved rescinding the reaffirmation.

Experian sent an automated consumer data verification (ACDV) form to Nationstar. Nationstar confirmed the balance and added more past-due amounts. Experian took no further steps and did not correct the report until February 2019, after Losch sued. The district court granted Experian summary judgment, calling Losch’s theory, which would require bureaus to examine court orders to determine their legal effect, a “bridge too far.”

What the court held

The Eleventh Circuit (Judges Jordan, Newsom, and Tjoflat; opinion by Judge Newsom) vacated in part, affirmed in part, and remanded the negligence claims for further proceedings.

Standing. Relying on its earlier Pedro v. Equifax decision, the court held that reporting a nonexistent delinquent debt to third parties resembles defamation. Losch’s report showed it had been supplied at least 26 times to six entities. The court also found concrete injury in his testimony about “stress, anxiety, and lack of sleep” and time spent disputing.

Inaccuracy. Experian argued that a discharge does not erase a debt, so reporting it was accurate. The court disagreed: “Although a bankruptcy discharge doesn’t ‘expunge’ a debt, Experian’s report was still factually inaccurate,” because Losch no longer owed the balance and was not past due.

Reasonableness. The court adopted the principle that a bureau on notice of a specific dispute is in a “very different position” than one with no notice. It distinguished cases holding that bureaus need not resolve legal disputes over a debt’s validity, because there was “no doubt” this mortgage was discharged. Because Experian “didn’t even check the bankruptcy docket,” a jury could find it negligent.

The court called its holding “a narrow one.” It did not hold that Experian’s procedures were unreasonable as a matter of law, or that bureaus must always check court records.

Willfulness. The court affirmed summary judgment on the willful claims, finding Experian’s reading of its duties “could reasonably have found support in the courts.”

Our take

Losch is a useful decision for consumers because it rejects the idea that forwarding an ACDV is automatically a reasonable reinvestigation. When a consumer gives a specific, documented explanation and a public record can confirm it, a bureau that simply relays the furnisher’s answer may face a jury.

The case also shows the limits. On remand, a federal jury in 2022 returned a verdict for Experian, finding its procedures reasonable, according to Experian’s counsel and defense-side commentators. Surviving summary judgment means a chance to go to trial, not a particular result. And the willfulness ruling means statutory and punitive damages are harder to reach where courts have not yet clearly defined the duty.

The decision foreshadowed the Eleventh Circuit’s later ruling in Holden v. Holiday Inn Club Vacations Inc. (2024), which declined to adopt a strict rule that only factual errors count. Discharged debts that still show balances are a recurring problem for people after bankruptcy, and Losch gives them a clear framework.

What it means if your report is wrong

After a bankruptcy discharge, check all three credit reports. Discharged accounts should show a zero balance and no current past-due amount. If they do not, dispute in writing, include your case number, the discharge order, and any order on a reaffirmation, and explain the error clearly. Keep copies and note the time you spend and any effect on your health or credit. A free case review can assess whether a bureau’s response was reasonable, and there is no fee unless we win.

Sources

Primary

Opinion (GovInfo, U.S. Courts)

Commentary we reviewed

Updated November 1, 2026. "Our take" is the firm's opinion. This page is general information, not legal advice, and later decisions may change the law.