The Fair Credit Reporting Act (FCRA) protects consumers from abuse by credit reporting agencies (CRAs) while allowing lenders and others to continue using credit reports to determine a person’s credit risk. Also known as credit bureaus, CRAs compile information from your credit history, like how you pay your bills and when. The major credit bureaus are Equifax, Experian, and Transunion.
Landlords, employers, and others use this information to make determinations on whether to let you rent an apartment or lend you money. However, you could suffer harm if there is inaccurate or incomplete information in your file. If a credit card collection agency is suing you for an old credit card debt, or if you are the victim of another FCRA violation, contact Mike Agruss Law today for a free consultation.
Can I Sue for FCRA Violations?
“Credit repair” companies attracted consumers with services or products that promised to repair their credit reports so that they can have a fresh start for their future and improve their credit scores. But these “quick fixes” were too good to be true and could not have possibly delivered what consumers needed to accomplish their debt legally. Despite consumers giving these “credit repair” organizations their money, negative credit information stayed on their credit reports for the legal time periods, which are typically 3 to 7 years. Additionally, debt collectors still contacted them, causing anxiety and humiliation.
The Federal Credit Repair Organizations Act is a consumer protection law enacted in September 1996. This statute prevents credit repair organizations from misleading or misrepresenting their services and engaging in fraudulent activities. The Act also prevents credit reporting agencies from sharing your credit score or other information without your authority. Inaccurate information in credit reports harms Americans, but you can sue to receive damages for harms suffered.
Under the FCRA, you have the right to accurate and fair credit file reporting. If a credit bureau, creditor, or another person or entity violates the FCRA, then you can sue. You have up to two years after the date that you discovered the FCRA violation but in some cases, you may have up to five years after the date of the violation to sue, so call Mike Agruss Law so we can determine the statute of limitations in your particular case.
Maximum Actual Damages in an FCRA Lawsuit
If your rights are violated under the FCRA, then you could potentially receive actual damages, punitive damages, and attorneys fees. How much and what type of damages you receive depends on whether the violation was intentional or due to negligence.
Upon proving that a CRA (credit reporting agency) or another entity violated your rights under the FCRA, you may be able to recover actual damages, which have no limit, or statutory damages between $100 and $1,000. In a situation where an individual violated your rights and lied to receive a copy of your credit report or used it fraudulently in a case of identity theft, then your damages will be greater than your actual damages or $1,000. Actual damages refer to provable financial losses that you suffered as a result of the violation.
Statutory Damages
In order to meet the standard of willful violation, your attorney must prove that the violation was reckless and that the person or entity doing the violation knew it. In some cases, there are multiple credit file report cases against a single defendant that could include hundreds of violations. Statutory damages can be provided when the same defendant makes multiple violations against many different victims.
Willful Violations of the FCRA
Unfortunately, there are actors and entities that violate the FCRA and violate your trust.
One type is a privacy violation. The credit bureaus can’t divulge your information without your authorization. If a new employer, landlord, or another entity that has no need for your credit information gets a hold of your credit report without your permission, then that is a violation. You do not need to provide your credit information to a university, to a supervisor in a job you’ve applied for, or to anyone that you were planning on going into business with.
Another violation is requesting credit information from a bureau without a permissible purpose. For example, a new potential employer needs written permission from you to check your credit and a valid reason to check it.
Your loan collector or credit card company should never supply incorrect or inaccurate information to a CRA, like overstating the total balance on your account or reporting on-time payments as late. At no point should they provide information that they know is untrue. Doing so is a violation of the FCRA.
An obvious mistake is when a CRA mixes information from two different people who have very similar information. If you have a very common name or if you are Jr. or Sr., and you live in the same area as someone else with similar information, then the bureaus are required to ensure that the information they provide is accurate. Inaccurate information, such as confusing you as someone with the same name in the same area, is a violation of your rights under the FCRA. If you have a common first name or the same name as someone else in your family, then you should check your credit report. Regularly checking your report can ensure that you’re not a victim of identity theft or an error.
What is an FCRA Dispute?
The FCRA identifies two different types of disputes: direct disputes and indirect disputes. A direct dispute is one where you dispute incorrect or inaccurate information on your credit report directly to the company that furnishes the information, usually a creditor. When you dispute wrong information to a CRA, such as Equifax, that is an indirect dispute.
Many people think that the best route is to file a direct dispute with the company that furnished it since, after all, they are the ones that provided the wrong information. But actually, an indirect dispute can accomplish more. First, by law, the credit bureau needs to conduct a reasonable investigation of the information that you are disputing. They must also notify the data furnisher of your dispute, which then makes them responsible for conducting a reasonable investigation of your claim. Lastly, if your efforts are in vain, then under the law, you can sue the credit bureaus and the data furnisher in federal court.
Because an indirect dispute allows you to file a lawsuit under the FCRA, and federal litigation may be required to get the inaccurate information removed from your report credit file, this is often recommended to make effective changes. When you come in for your free consultation, our FCRA attorneys can explain to you the process and the advantages and disadvantages of each type of decision in your specific case.
Most Common Credit Report Errors
The three most common credit report errors are due to inaccurate information or incomplete information in your credit file. They are:
- Wrong address;
- Misspelled name;
- A completely wrong name.
According to the Consumer Financial Protection Bureau, other errors you should look out for include incorrect date of last payment or the date that you opened the account, closed accounts that are reported as open or accounts that are incorrectly reported as late or delinquent. Another common mistake is when someone is reported as the owner of an account when they’re really just an authorized user.
If you find an error, then you can dispute credit report errors by gathering proof of the error and sending a letter to the credit bureau that has the wrong information. The major credit bureaus have an online dispute process that tells you what documentation you will need to verify your identity and the false information under federal law.
Resolving Credit Report Problems
Errors on your credit report can be devastating. You could be denied credit, unable to get a loan, and prevented from opening a new line of credit. Errors that are particularly concerning are those that suggest that you may be the victim of identity theft. You may be a victim of identity theft if a payment is reported late when you paid it on time or if there are derogatory marks in your credit history from over seven years ago.
In order to fix credit report errors quickly, you must contact the credit bureau and the organization that provided the inaccurate information to the bureau. Both of these entities are responsible for correcting inaccurate or incomplete information in your report in accordance with the Fair Credit Reporting Act. All three credit bureaus – Equifax, Experian, and Transunion – accept online submissions.
Your dispute letter should also include contact information like your complete name, correct address, telephone number, and email address. If the bureau requests hard copies, then you should send copies of documents supporting your dispute, but never originals. You will have to indicate your reason for the dispute and upload your information, like your passport.
It could take anywhere from 30 to 45 days to complete the investigation of your dispute. If your dispute is denied, then you can file a complaint with the Consumer Financial Protection Bureau.
How Often are Credit Reports Wrong?
An estimated 34% of Americans have found at least one error on their credit reports. With over a third of Americans finding issues with their credit reports, the major credit reporting companies recommend that consumers check their credit reports for potential credit report errors, not just inaccurate contact information. Common credit report errors include:
- Inaccurate credit limits;
- Incorrect dates of payments or late payments;
- Incorrect dates that accounts were opened or closed;
- Incorrect balances on accounts.
We Protect Consumers
Since 2012, Mike Agruss Law has helped thousands of clients through the dispute process, and we are eager and ready to help you, too. We highly recommend that all of our clients get their free credit report to check for inaccuracies or wrong information. When you need help disputing credit report errors, we can provide you with the legal assistance you need.
Contact our consumer law offices today to schedule a free consultation regarding your rights under the Fair Credit Reporting Act. We use this consultation to learn about what happened, explain the law to you in greater detail, and provide guidance on the next steps you should take and when you should take them. Upon determining that you have a valid case, we begin investigating and working hard to ensure success in your case. Facing a violation can feel overwhelming and like a major block in your life, but we can help you to move forward.
