Debtor Sues Arrow Financial Services, LLC for Furnishing Negative Marks to Credit Bureaus without First Validating a Disputed Debt

In Purnell v. Arrow Financial Services, LLC (6th Cir. 2008), Illinois-based debt buyer, Arrow Financial Services, was sued for continuing to furnish a disputed collection account to the credit bureaus before verification and without using a "dispute marker." The court held that a debt collector may either choose not to verify a debt and abandon its effort to collect on a debt (which includes reporting derogatory information to credit reports), or it may verify the debt and resume collection once validation has been provided after a consumer disputes the debt within a 30-day period. Here, it was alleged that Arrow did not validate the debt yet continued to furnish the delinquency to the credit bureaus.

This federal appeals court also found that each negative mark furnished before validation constituted independent, discrete violations of the Fair Debt Collection Practices Act.

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