- Case
- Sessa v. Trans Union, LLC
- Court
- U.S. Court of Appeals for the Second Circuit
- Citation
- 74 F.4th 38 (2d Cir. 2023) (No. 22-87)
- Decided
- July 17, 2023
- Bottom line
- In the Second Circuit, a bureau cannot avoid an accuracy claim just by calling the dispute legal; errors that are objectively and readily verifiable can be actionable.
Background
Gia Sessa leased a Subaru Forester in November 2018. The lease gave her the “option to purchase” the car at the end of the term for its residual value of $19,444.07. It did not require her to buy it. But Hudson Valley Federal Credit Union, which furnished information about the lease, reported to TransUnion that Sessa owed a “balloon payment” of $19,444 due at the end of the lease, and TransUnion reported that obligation as a debt on her credit report. TransUnion also reported a “High Balance” of $25,928.60, which treated the residual value as money she owed.
Sessa sued TransUnion under 15 U.S.C. § 1681e(b), which requires a credit bureau to “follow reasonable procedures to assure maximum possible accuracy” of its reports. The district court granted summary judgment to TransUnion. It reasoned that whether Sessa owed a balloon payment was a legal, contractual question, and announced that bureaus “can only be held liable for FCRA claims when the information reported does not match the information furnished.” The CFPB and FTC filed an amicus brief supporting Sessa on appeal.
What the court held
The Second Circuit (Judges Cabranes, Nardini, and Merriam; opinion by Judge Merriam) vacated and remanded. It held “that the FCRA does not contemplate such a threshold inquiry; rather, an FCRA claim alleges an ‘inaccuracy’ so long as the challenged information is objectively and readily verifiable.”
The court explained that by limiting liability to cases where the report did not match what was furnished, the district court “improperly narrowed the scope of section 1681e(b) to cases involving transcription errors.” It read its own January 2023 decision in Mader v. Experian as focusing on whether an alleged error “evades objective verification,” not on whether it can be labeled legal. Sometimes that inquiry will involve whether a debt is the subject of a real legal dispute, as in Mader, “But that does not mean that any dispute that might arguably turn on a question of law is non-cognizable under the FCRA.”
In a footnote, the court added that there did not appear to be any legitimate legal dispute anyway: “There simply was no balloon payment due – as a matter of fact.” TransUnion’s counsel had conceded at argument that neither the dealer nor the credit union would have had a colorable claim for the reported balloon payment.
The court stressed that inaccuracy is only one part of a § 1681e(b) claim. A bureau violates the statute only if it failed to follow reasonable procedures, a question the district court never reached. The case was sent back for that analysis.
Our take
Sessa is an important correction. Almost every credit reporting error can be described in legal terms: whether a debt is owed, in what amount, and when, all depend on a contract or a court order. A rule that bureaus are never responsible for errors that “involve the law” would leave consumers with little protection against reports that are plainly wrong. The court’s footnote makes the point well: a lease option is not a debt.
The decision is also measured. It does not require bureaus to resolve genuinely contested legal questions, which Mader still protects, and it leaves bureaus free to show their procedures were reasonable. Other circuits have since moved in the same direction for claims against furnishers, including the Eleventh Circuit in Holden (2024) and the Fourth Circuit in Roberts v. Carter-Young (2025), while the Fifth Circuit has held that bureaus need not investigate the legal validity of disputed debts. The law on this question still varies by circuit.
What it means if your report is wrong
If your report shows a debt, balance, or payment that your contract does not require, do not assume it is “just a legal disagreement” that cannot be fixed. Dispute it in writing with each bureau and with the company that reported it, and attach the contract language that shows the error. Clear documents that make the error easy to verify are what courts look for after Sessa.
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Sources
Primary
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.