For most Americans, having a good credit report is essential to improving their quality of life. Good credit enables us to purchase homes, automobiles, and splurge on vacations paid for with credit cards. The credit reporting system relies upon consumer reporting agencies (CRAs) to keep track of consumers’ payment history and relies upon the efficiency and accuracy of agencies and lenders. Unfortunately, errors in reporting are commonplace and these mistakes cost consumers in higher interest rates, denied loans and even loss of employment opportunities. The Fair Credit Reporting Act (FCRA) is designed to regulate the reporting agencies and give consumers a remedy when violations occur. Some of the most common violations are listed below.
Creditors are forbidden from providing outdated or misleading information to reporting agencies and are charged with the responsibility to accurately report payment histories. If a creditor lists a debt as charged off when it has been paid, lists timely payments as late, incorrectly states the remaining balance, or supplies information on an account known to be related to identity theft, the creditor has violated the FCRA and the consumer is entitled to legal remedies.
Both creditors and CRAs are required to give the most current information available. Common violations include reporting information that is more than seven years old (or ten years old in the case of judgments), reporting closed accounts as active, failing to identify debts discharged in bankruptcy, and reporting old debts as current.
While tracking millions of consumers, sometimes information gets confused. Common mistakes are: cross-reporting information between people with similar social security numbers; misattributing information related to individuals with a suffix such as “Jr.” or “Sr.” in their names; and combining or mixing credit information for individuals living in the same city with similar names. Failing to implement safeguards and remedy cases of confused identity leading to an improperly lowered credit rating is a violation of the FCRA.
Debt Dispute Procedures
When a consumer becomes aware of an error on his or her credit report, the alleged debt may be disputed. CRAs have a legal responsibility to notify the creditor that the debt is disputed, initiate and conduct a reasonable investigation into the validity of the disputed debt, and remove any inaccurate information within thirty (30) days after getting notice of the dispute. Neglecting or disregarding the duty to implement and timely follow debt dispute and resolution procedures is a violation of the FCRA.
Just as CRAs have debt dispute procedures, so must creditors. They are required to notify every involved CRA of the dispute, supply updated and corrected information, and conduct an investigation regarding the disputed debt within 30 days of notification of the dispute (or 45 days if the consumer provides additional information after giving notice.)
Wrongfully Requesting a Credit Report
If someone pulls a credit report for an impermissible purpose, it is a violation of the FCRA. Examples of impermissible purposes include: to see if someone can pay a judgment prior to filing a lawsuit; to “check out” a potential boyfriend or girlfriend; after a debt has been discharged in bankruptcy; or by landlords attempting to collect rent without a judgment.
When a consumer has been damaged by violations of the FCRA, he or she may pursue legal remedies. Consumers may recover their actual damages, statutory damages, punitive damages, attorneys’ fees, and any other remedies deemed appropriate by a court, such as litigations costs and discretionary costs. Therefore, call Morgan Legal Group PC today.