Summary:
In Saffold v. First Citizens Bank (No. 5:24-CV-487-M-RJ, E.D.N.C. Sept. 30, 2025), Chief Judge Myers denied—albeit without prejudice—the bank’s motion to dismiss a Fair Credit Reporting Act (FCRA) claim brought by consumer Amanda Saffold. The dispute arose from a 2020 settlement between Saffold and First Citizens resolving prior collection activity that she alleged violated consumer protection laws. The settlement included mutual releases, a representation by the bank that it would discharge the debt and cease collection, and a clause requiring either party to give 14 days’ written notice before alleging breach.
Saffold later discovered that TransUnion continued to report her account as delinquent and disputed the entry, asserting that First Citizens failed to correct its reporting in violation of the FCRA. The bank sought dismissal, arguing the settlement’s release barred the claim and that it had no continuing duty to ensure credit reporting accuracy.
The court rejected both substantive defenses. Applying North Carolina contract law, Judge Myers found that Saffold’s promise not to sue was dependent on the bank’s promise to “fully release and forever discharge” her debt. If the bank continued to report a balance, that would breach the agreement and relieve Saffold of her obligation not to pursue further claims. The Court also held that the settlement did more than simply end collection—it extinguished the debt itself, and therefore, continuing to report it as due could violate both the contract and the FCRA.
However, Saffold failed to allege that she complied with the agreement’s notice provision. Her dispute through TransUnion did not constitute notice under the contract, which required direct written notice to the bank’s counsel. Because she had not alleged that she sent such notice, her complaint was procedurally deficient. Nonetheless, the court denied the motion to dismiss without prejudice and granted her leave to amend by October 14, 2025, to allege proper notice.
Commentary:
The Saffold decision is a helpful illustration of how consumer credit reporting disputes often live at the intersection of federal statutory rights and private settlement contracts. Even when a creditor agrees to “discharge” a debt, its obligations may continue through the accuracy duties imposed by the FCRA. Yet, as this case shows, procedural precision still matters—particularly when settlements include notice-and-cure provisions.
For consumer and debtor counsel, one practical takeaway is to ensure that settlement agreements explicitly address post-settlement credit reporting duties. Rather than relying on general release language or “cessation of collection” clauses, consider including a clause such as:
Credit Reporting Accuracy Provision:
Creditor agrees to report to all consumer reporting agencies to which it furnishes information an update to their records to reflect that the Account has been satisfied, settled in full, or otherwise carries a $0 balance with no past-due status. Creditor shall not report or cause to be reported any derogatory information regarding the Account after the Effective Date of this Agreement.
Such a provision transforms the creditor’s obligations from implicit to enforceable, reducing ambiguity about whether continued derogatory reporting constitutes a breach.
In sum, Saffold reminds practitioners that settlements resolve disputes only when they are drafted—and followed—with the same care as any other legally binding agreement. A promise to “forever discharge” the debt should also mean a promise to stop saying otherwise to the credit bureaus.
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