Fair Credit Reporting Act (FCRA)

The Fair Credit Reporting Act (FCRA) is a federal law in the United States that was enacted in 1970 to promote accuracy, fairness, and privacy in the information collected and maintained by consumer reporting agencies (CRAs). The FCRA regulates how CRAs collect, use, and share consumer information and provides specific rights to consumers regarding their credit information.

Here are some key provisions and consumer rights under the FCRA:

1. Access to Credit Information:

   • Consumers have the right to request and obtain a copy of their credit report from each of the three major CRAs (Equifax, Experian, and TransUnion) once every 12 months for free. This can be done through the official website AnnualCreditReport.com. You can also sign up on Credit Karma and receive your credit reports for free all the time.

2. Accuracy of Information:

   • CRAs must follow reasonable procedures to ensure the accuracy of the information in consumers’ credit reports. Consumers have the right to dispute inaccurate or incomplete information, and CRAs must investigate disputes within 30 days.

3. Notification of Adverse Actions:

   • If a consumer is denied credit, employment, insurance, or any other benefit based on information in their credit report, the entity that made the decision must provide the consumer with an adverse action notice. This notice must include the name, address, and phone number of the CRA that provided the report, a statement that the CRA did not make the decision, and a notice of the consumer’s right to obtain a free copy of their credit report and dispute its accuracy.

4. Limitations on Access to Credit Reports:

   • The FCRA limits who can access a consumer’s credit report and for what purposes. Generally, credit reports can only be accessed by entities with a legitimate need, such as lenders, employers (with the consumer’s consent), insurance companies, and landlords.

5. Consumer Consent for Employment Credit Checks:

   • Employers must obtain written consent from a consumer before accessing their credit report for employment purposes. If an adverse employment action is taken based on the report, the employer must provide a pre-adverse action notice and a copy of the credit report to the consumer.

6. Identity Theft Protections:

   • Consumers have the right to place a fraud alert or credit freeze on their credit reports if they suspect identity theft. A fraud alert notifies potential creditors to take extra steps to verify the consumer’s identity before granting credit. A credit freeze restricts access to the consumer’s credit report, making it more difficult for identity thieves to open accounts in the consumer’s name.

7. Limitations on Negative Information:

   • The FCRA sets time limits on how long negative information can remain on a consumer’s credit report. Most negative information, such as late payments and collection accounts, can remain on a credit report for up to seven years. Bankruptcies can remain for up to ten years.

8. Right to Seek Damages:

   • Consumers have the right to sue CRAs, furnishers of information, and users of credit reports for violations of the FCRA. They may seek actual damages, statutory damages, punitive damages, and attorney’s fees.

The FCRA is enforced by the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission (FTC). Consumers who believe their rights under the FCRA have been violated can file complaints with these agencies or seek legal counsel to pursue their rights.

Under the Fair Credit Reporting Act (FCRA), consumers have the right to seek damages if their rights under the act are violated. The FCRA allows for two types of legal actions: claims for willful noncompliance and claims for negligent noncompliance. The damages available to consumers differ depending on the nature of the violation.

Willful Noncompliance

If a consumer reporting agency (CRA), furnisher of information, or user of a credit report willfully violates the FCRA, the consumer may be entitled to the following damages:

1. Actual Damages: These are damages that compensate the consumer for any actual harm suffered as a result of the violation. This can include financial losses, emotional distress, and other out-of-pocket expenses.

2. Statutory Damages: In cases of willful noncompliance, consumers can opt to receive statutory damages ranging from $100 to $1,000 per violation, even if they cannot prove actual damages.

3. Punitive Damages: These are damages intended to punish the violator and deter future misconduct. There is no set limit on punitive damages, and they are awarded at the discretion of the court based on the severity of the violation.

4. Attorney’s Fees and Costs: If a consumer prevails in a lawsuit, they may also be awarded reasonable attorney’s fees and court costs.

Negligent Noncompliance

If the violation is due to negligence, rather than willful misconduct, the consumer may be entitled to the following:

1. Actual Damages: Consumers can recover actual damages suffered as a result of the violation. This can include financial losses, emotional distress, and other out-of-pocket expenses.

2. Attorney’s Fees and Costs: If a consumer prevails in a lawsuit for negligent noncompliance, they may also be awarded reasonable attorney’s fees and court costs.

Examples of Violations

Violations of the FCRA can include:

• Failing to investigate a consumer’s dispute regarding inaccurate information on their credit report.
• Providing a credit report to a third party without a permissible purpose.
• Failing to provide required notices to consumers, such as an adverse action notice when credit is denied based on a credit report.
• Including inaccurate or outdated information on a credit report.

How to Pursue Damages

If you believe your rights under the FCRA have been violated, you can take the following steps to pursue damages:

1. Document the Violation: Keep detailed records of any violations, including dates, times, and descriptions of the events.

2. File a Complaint: You can file a complaint with the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC). These agencies enforce the FCRA and can investigate your complaint.

3. Dispute the Information: If the violation involves inaccurate information on your credit report, file a dispute with the CRA and the furnisher of the information. The CRA is required to investigate your dispute and correct any inaccuracies.

4. Consult an Attorney: Consider consulting with a consumer rights attorney who specializes in FCRA cases. An attorney can help you understand your rights, gather evidence, and file a lawsuit if necessary.

5. File a Lawsuit: If necessary, you can file a lawsuit in federal or state court to seek damages for the FCRA violation.

By understanding your rights and the remedies available under the FCRA, you can take appropriate action to protect yourself and seek compensation for any harm caused by violations of the act. If you feel like your rights have been violated under the FCRA, please call us now at 877-700-5790.