In
Schiano v. HomEq Servicing Corp, the Third Circuit Court
of Appeals held that simple allegations of a failure to "fully
and properly investigate" a credit reporting dispute were mere
conclusory statements that failed to state a claim for relief under
the Iqbal pleading standard.
In 2004, an arbitration award of $35,000 was entered against
Plaintiffs Ralph and Elanor Schiano after they fell behind on
credit card payments. To pay this debt, the Schianos refinanced
their home, took out a loan, and requested that the loan be paid to
their creditor. The central dispute in this case arose when their
creditor claimed that the loan was never used to pay off the award,
resulting in derogatory credit reporting on the Schiano's
account.
