Common Violations of the FCRA

Here are some of the more common ways that creditors, collectors, and CRAs violation the FCRA.

Furnishing and Reporting Old Information

CRAs and the creditors who supply information to them must provide and keep your credit information current. When your credit circumstances have changed and the information in your credit report is not updated to reflect these changes, this may be a violation of the FCRA. Some examples of this include:

• failing to report that a debt was discharged in bankruptcy
• reporting old debts as new or re-aged
  reporting an account as active when it was voluntarily closed by a consumer, and
  reporting information that is more than seven years old (bankruptcy) or ten years old (civil judgments).

Furnishing and Reporting Inaccurate Information

• Your creditor must not supply information to a CRA that it knows (or should know) is inaccurate. That includes:
  reporting a debt as charged off when you settled it or paid it in full
  misstating the balance due
  reporting late payments when you paid timely
  listing you as a debtor on an account when you were only the authorized user, or
  supplying credit information on an account where identity theft was previously reported (or failing to maintain a reasonable procedure for you to report identity theft).

Mixed Files

CRAs can also run afoul of their obligations to report accurate credit information about you. In many instances, this happens when a credit bureau mixes your file with that belonging to someone else with similar background information.

Some common cases of mixed files include:

• morphing or duplicating negative credit information with a stranger who shares a similar social security number
• failing to distinguish the Jr. and Sr. in similar surnames
• mixing the information of persons with the same last name and similar first names, and
• combining or mixing credit files of persons with similar names living in the same city or zip code.

Failing to Follow Debt Dispute Procedures

When you submit a written dispute about the accuracy of an item on your report, credit bureaus and your creditors must take certain actions in response. Their duties include conducting a reasonable investigation of your dispute, correcting any inaccurate information, or even removing the disputed debt from your credit report. There are a number of ways they can fall short of their duties, depending on whether they are the CRA or the creditor.

Debt Dispute Violations by CRAs

Some common violations by a CRA include failing to:

• notify a creditor that you dispute the debt that it has reported
• conduct a reasonable investigation of your dispute, or
• correct or delete any inaccurate, incomplete or unverifiable information within 30 days of the receiving notice of your dispute.

Debt Dispute Violations by Creditors and Other Information Suppliers

Some common violations by a creditor or other information furnisher include

• failing to:notify every CRA involved that you dispute the debt
• submit corrected information to the CRA subsequent to investigating your dispute
• refrain from continuing to submit information that it knows (or should know) is incorrect
• conduct an internal investigation of your dispute within 30 days (or 45 days of you supply additional information during the investigation)
• provide you with a reasonable procedure (including an address) to submit a written dispute or report of identity theft, or
  inform you of the results of its investigation within 5 business days after it completes the investigation.

Privacy Violations

CRAs cannot release your credit report to just anybody. They can only give them to authorized persons. CRAs may disclose your report only to persons or entities that have a “valid need,” such as:

• creditors
• landlords
• insurance providers
• utility companies, and
• employers (only if you previously consented).

Requesting a Credit Report for an Impermissible Purpose

Even though your employer, creditor, or landlord might be allowed to pull your credit report, they must still have a permissible purpose to do so. If someone pulls your credit report for an impermissible purpose, then it may be a violation of the FCRA.

Some examples of impermissible purposes include:

• someone pulls your credit report to determine if you are collectible before filing a lawsuit against you on an involuntary debt or other non-credit matter (for example, in determining whether to file a personal injury lawsuit)
• your employer pulls your credit report without your permission, or
• a creditor on a debt you discharged in bankruptcy pulls your credit report to check out your current financial activity.

Withholding Notices

You are entitled to notices concerning the reporting, handling, and use of your credit information. Notice violations under the FCRA might occur when:

• a creditor fails to notify you when it supplies negative credit information to a CRA
• a “user of credit information” (such as prospective employer or lender) fails to notify you of a negative decision based upon your credit report
• a creditor fails to provide you with your credit score if it was used as part of any credit decision
• a creditor fails to notify you of your right to dispute inaccurate credit information
• a creditor fails to notify you of your right to obtain a free credit report, or
• a creditor or “user of information” refuses to identify the source of the credit information it obtained about you.

Remedies

If any of these three types of entities (credit bureau, creditor, or information user) violated your rights under the FCRA, you may be able to sue them in state or federal court for damages.

Damages for a Willful Violation

If you can show that the credit reporting agency (CRA), information furnisher, or entity using the information willfully violated its obligations under the FCRA, then you may be entitled to recover up to all of the following damages:

Basic Damages (pick one):

• actual (provable) damages (no limit), or
• statutory damages damages between $100  and $1,000 (to get these you don’t have to prove that the violation harmed you).

If the violator was an individual  who lied to get your credit report, or used it for an improper purpose, then the greater of:

• your actual, provable damages (no limit), or

• $1,000 flat (no minimum).

• Punitive damages,  as decided by the court.

• Attorneys fees and costs.

Definition of “Willful”

A willful violation doesn’t just mean that you have to prove that the CRA or other entity actually knew that it violated your rights. Rather, it is enough to prove that it was acting recklessly — that is, the CRA or other entity knew or should have known that it was running afoul of the FCRA.

Damages for a Negligent Violation

You are also entitled to damages if you can show that the CRA or other entity  negligently  failed to comply with its obligations under the FCRA. Damages here include:

• actual damages (no set limit or minimum), and

• attorneys fees and costs.

Beware: Penalty for a Frivolous FCRA Lawsuit

The FCRA has a penalty for filing any lawsuit or subsequent court papers that are later determined to have been filed in “bad faith or for purposes of harassment.” You (or the defendant) may have to pay the other side’s attorney fees if you/they file bad faith papers and lose.

When and Where to File a Lawsuit for FCRA Violations

You can file a complaint in either federal court or your state’s court. There is a time limit (called a statute of limitations) for filing a FCRA complaint. It must be filed no later than:

• two years after the date you discovered the violation, or

• five years after the date of the violation.