You probably know that, as a consumer, you have certain rights under the federal Fair Credit Reporting Act (FCRA). This law primarily regulates the way credit reporting agencies — Experian, Equifax and TransUnion — use the information they receive regarding your credit history. The law also applies to other entities such as banks, landlords and credit unions as well as businesses that use information on credit reports for hiring purposes.
Individuals are becoming increasingly aware of their consumer rights. Still, even the savviest of consumers are often surprised to learn about the most common violations of rights granted to them under the FCRA. Here are the abuses we see all too frequently in our practice:
Reporting inaccurate information
Information provided to the credit reporting agencies must be correct. The most prevalent way this duty is breached occurs when furnishers provide the bureaus inaccuracies related to:
incorrect balances or payment history,
a debt that's been settled or paid; and
a debt that doesn't belong to you.
It's best to dispute errors with each of the consumer reporting agencies. They are legally obligated to conduct an investigation upon receiving the dispute so that they can correct or delete inaccurate information.
Providing and reporting outdated information
Information furnished to credit reporting agencies is required to be current. Violations of this conduct include failing to report a discharge of bankruptcy, re-aging an account to continue the reporting in an effort to receive payment, and reporting information more than seven years old.
Merging credit files
Credit reporting agencies are prohibited from mixing the credit files of its consumers. This duty is breached by the bureaus when someone's negative credit information is duplicated in the file of another person. Typically this occurs when the victim shares a similar name, social security number and/or other personal identifying information. It can also happen as the result of identity theft.
Failing to follow proper investigation procedures
When credit reporting agencies reports inaccurate information, you have a right to dispute the information and request an investigation. The bureaus are then required to conduct a reasonable investigation into your claim and report back to you. Violations of this nature happen when the credit reporting agencies fail by:
not conducting a reasonable (re)investigation or doing so in a negligent manner, include failing to inform a creditor of your dispute;
conducting a unreasonable investigation into your dispute, by failing to follow their own procedures; or
failing to update or delete inaccurate information from your report after an investigation.
Requesting a credit report for an impermissible purpose
The law limits those who are allowed to review your credit report to certain entities that have a "permissible purpose." This class of people and businesses are able to pull your credit report if you have a current or potential relationship with them. These include:
Even so, there are countless scenarios in which someone in this class pulls your credit report without a permissible purpose:
Your former creditor pulls your credit report after you discharged that debt in bankruptcy;
A landlord attempting to dig up dirt to terminate a lease.
An employer pulls your credit report without having your written permission; or
Someone requests your report to use it as evidence against you in a divorce, criminal, personal injury, or other non-credit lawsuit or proceeding.
Car dealers who pull a report without your consent.
There are others who would rarely have a permissible purpose, such as if a co-worker or ex-boyfriend pulls your credit report without your consent.
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If errors such as these have stayed on your credit report after your dispute, you may be entitled to compensation. Under the FCRA, the credit reporting agencies and furnishers can be liable for your actual damages, statutory damages up to $1,000 and punitive damages. Plus, the law provides that the bureaus and furnishers pay your attorney’s fees so you don’t incur any out of pocket expenses in pursuing your claim.
If information about you is inaccurately being reported, or if you feel that you're rights have been violated, please contact us for a free case review.