Is Your Credit Report Accurate?
50 years after the Fair Credit Reporting Act (“FCRA”) was adopted, the credit reporting system is still broken, as evidenced by the more than a quarter-million complaints about the three largest credit bureaus submitted to the Consumer Financial Protection Bureau (“CFPB”). The credit bureaus and the companies that supply them with information still have serious problems in ensuring the accuracy of credit reports and the dispute process meant to fix the reports remains arbitrary and ineffective. “A key reason in the structure of the system is that consumers are the commodity, not the customer of the credit bureaus. When Equifax, TransUnion, or Experian fails to respond to consumers’ problems, we can’t vote with our feet to leave,” said National Consumer Law Center attorney Chi Chi Wu.
Americans frequently suffer from credit reporting abuses, such as having their credit files “mixed” with the wrong person, negative information that remains even after court judgments or legal settlements declare that a consumer doesn’t owe a debt, the after-effects of identity theft when credit bureaus and creditors don’t believe the victim, and being labeled as dead when they are alive and breathing. According to a Federal Trade Commission study, out of an estimated 208 million Americans with credit reports, about 42 million consumers have errors on their credit reports, and 10 million have errors that can be life-altering.
To make matters worse, the widespread inaccuracies are rarely remedied through the dispute process that Congress required the credit bureaus offer to consumers. Some “furnishers” (creditors or other companies that supply information to the credit bureaus) still conduct antiquated, perfunctory investigations into credit reporting disputes and ignore CFPB guidance on how information provided by the consumer is to be considered. Making matters worse, the credit bureaus still fail to conduct their own independent investigations. They thoughtlessly accept what a furnisher tells them, even when what they are told is contrary to established evidence such as court judgments.
So, what are aggrieved consumers to do? When you are the victim of a FCRA violation, you can sue in court. But first, you must go through the formal dispute process with the credit reporting agencies. A call or letter directly to your creditor will not do the trick. While there are options on how to file a dispute, including online, we recommend that you send a letter by certified mail to each offending credit bureau that describes the inaccurate information being reported and encloses all of your supporting documents. Of course, make a copy of exactly what you submit. If the inaccurate information is not fixed during the dispute process, you are then free to file a lawsuit in federal or state court against the credit bureau(s) and/or the furnisher of the false information.
The remedies recoverable under the FCRA include all actual damages. For example, inaccurate information in your report could lead a creditor to deny you a car loan or credit card, an employer to refuse to hire you, or a landlord to decide not to rent to you. Actual damages include both economic damages and general damages, including an award for emotional distress type harm when proven. If the violation is determined to be willful on the part of the defendant, punitive damages may also be awarded. Finally, a credit bureau and/or furnisher that violates the statute by reporting false information and failing to acknowledge the merits of your dispute may be ordered to pay your attorneys’ fees.
If after filing a good faith dispute with a credit bureau inaccurate information remains on your credit report and continues to cause you harm, please feel free to contact Bordas & Bordas for a free consultation.
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