Kemonty Harvey financed the remote purchase of a 2017 Tesla Model X through USAA Federal Savings Bank in March 2022. USAA wired $54,518.00 to a dealer in Jamestown, North Dakota — Michel Auto Sales Inc. — but the vehicle was never delivered to Harvey in Virginia. Harvey alleged on information and belief that the account receiving the funds did not belong to the dealer and was not in that entity's name. He reported the fraud to USAA and law enforcement four days after the transaction closed, stopped making payments, and disputed the loan account on his credit reports three separate times. Each time, USAA verified the information, and the negative reporting remained, allegedly causing Harvey credit denials, a home loan denial, a decreased credit score, damage to reputation, and emotional distress.
Harvey sued USAA in the Eastern District of Virginia, asserting that USAA violated the Fair Credit Reporting Act by failing to conduct a reasonable investigation after he disputed the credit-report entries. His theory: because the vehicle was never delivered, his repayment obligation was never triggered — or was otherwise unenforceable due to fraud — making USAA's negative reporting inaccurate.
Judge Roderick C. Young granted USAA's partial motion to dismiss the FCRA claims, applying the Fourth Circuit's recent decision in Roberts v. Carter-Young, Inc., 131 F.4th 241 (4th Cir. 2025). Under Roberts, reported information is actionably inaccurate under the FCRA only if it is objectively and readily verifiable. Where the accuracy inquiry requires complex fact-gathering and in-depth legal analysis, it does not meet that standard.
The court found that Harvey's dispute failed the test. Resolving whether he owed repayment despite the fraud required determining, among other things, whether receipt of the vehicle was a condition precedent to the loan contract and whether fraud constituted a force majeure extinguishing his obligations — questions of contract interpretation, not objectively verifiable facts. The court drew a direct analogy to Mader v. Experian Info. Sols., Inc., 56 F.4th 264 (2d Cir. 2023), a Second Circuit case that Roberts itself relied upon, where the post-bankruptcy validity of a student loan debt was held non-cognizable under the FCRA because of the bespoke legal reasoning required to resolve it.
The court noted that the Loan Agreement on its face did not release Harvey from repayment once the loan was funded, and that the federally required Holder Rule notice in the agreement — preserving claims and defenses against USAA that Harvey might have against the seller — did not change the analysis, because investigating those fraud claims and assessing whether the contract was void ab initio are not circumstances objectively and readily verifiable by a non-lawyer responding to a credit dispute.
Because Harvey failed to plausibly allege that USAA reported inaccurate information in the first place — a threshold requirement for any claim under 15 U.S.C. § 1681s-2(b) — both FCRA counts were dismissed. Harvey's Virginia Consumer Protection Act claim and intentional misrepresentation claim remain pending, as USAA's motion targeted only the federal counts.