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A Florida federal court held that a party cannot rely on a sham arbitration award to substantiate a Fair Credit Reporting Act ("FCRA") claim.
In Buczek v. Trans Union LLC, No. 05-80834 CIV, 2006 WL 3666635 (S.D. Fla. Nov. 09, 2006), Shane Buczek leased a BMW but claimed that he "does not recall" signing the agreement or possessing the car. After Buczek defaulted on the payments, the car was repossessed. He became current on the payments and the car was returned to him. After a second repossession, the car was sold at auction.
Buczek was charged with a deficiency balance which was listed as a delinquency on his Trans Union credit report. He disputed the delinquency as a violation of the FCRA.
The Court disregarded Buczek's contention that the balance was not delinquent because it was nullified by an arbitration award in his favor from the "National Arbitration Council." There was no arbitration agreement contained in the original BMW lease. Further, there was no other agreement to arbitrate disputes between the parties. "'Absent a valid contractual agreement to arbitrate, a demand for arbitration is not binding.'" Czarina LLC v. W.F. Poe Syndicate, 358 F.3d 1286 (11th Cir. 2004).
Trans Union was free to disregard the sham arbitration and ignore the award that arose from it. The Court granted Trans Union's motion for summary judgment.
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