What is the FCRA and How Does it Protect You?
What is the FCRA and How Does it Protect You? The Act (Title VI of the Consumer Credit Protection Act) protects information collected by consumer reporting agencies such as credit bureaus, medical information companies and tenant screening services. The Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681 et seq., governs access to consumer credit report records and promotes accuracy, fairness, and the privacy of personal information assembled by Credit Reporting Agencies (CRAs). The law regulates the way credit reporting agencies can collect, access, use and share the data they collect in your consumer reports.
Why does it matter how information about your credit is used?
Whenever you apply for a credit card, a car loan, a mortgage loan or any other form of credit, the issuing company checks your credit history to assess your creditworthiness. The terms you are offered for credit (such as a loan) may be based in part on your credit score and information in your credit report.
Your credit history affects more than just your ability to get loans or the annual percentage rate (APR) on your credit cards. For instance, prospective landlords could check your credit report to see how creditworthy you are when deciding whether they can trust you to pay your rent on time.
In some states, employers may check your credit report for hiring purposes. Also, depending on the state, insurance companies may check your credit to determine whether to offer you coverage.
Tips for Consumers to Protect Your Rights
- Regularly Check Your Credit Report: Review your credit report regularly to ensure the information is accurate and up to date. You can request a free report annually from each of the three major CRAs.
- Dispute Inaccuracies Promptly: If you find any inaccuracies in your credit report, dispute them promptly with the CRA that provided the report. Include any supporting documentation to help resolve the issue.
- Protect Your Personal Information: Safeguard your personal information to prevent identity theft. Use strong passwords, avoid sharing sensitive information online, and monitor your accounts for suspicious activity.
- Understand Your Rights: Familiarize yourself with your rights under the FCRA to better protect your credit information and take action if your rights are violated.
Here are some sample FCRA claims, including common scenarios and the specific sections of the FCRA that might be invoked.
1. Inaccurate Information on Credit Report
Claim: A consumer finds incorrect information on their credit report, such as an account that doesn’t belong to them or a payment marked as late that was actually paid on time.
Relevant FCRA Sections:
- Section 611 (15 U.S.C. § 1681i): This section requires consumer reporting agencies (CRAs) to investigate disputes over the accuracy of information within 30 days.
- Section 623 (15 U.S.C. § 1681s-2): This section places responsibilities on furnishers of information to CRAs to provide accurate information.
Sample Claim: “Defendant Equifax reported inaccurate information on Plaintiff’s credit report, specifically listing a late payment on an account that was paid on time. Plaintiff disputed this information on [date], but Equifax failed to correct the error within the 30-day period mandated by 15 U.S.C. § 1681i. Furthermore, Defendant [Creditor] continued to furnish incorrect information despite having received notice of the dispute, in violation of 15 U.S.C. § 1681s-2.”
2. Failure to Investigate Dispute
Claim: A consumer disputes inaccurate information on their credit report, but the CRA fails to conduct a reasonable investigation.
Relevant FCRA Sections:
- Section 611 (15 U.S.C. § 1681i): This section mandates that CRAs must conduct a reasonable investigation of disputed information.
Sample Claim: “Plaintiff disputed an erroneous collection account on her credit report with Defendant TransUnion on [date]. Despite providing evidence that the debt was paid, TransUnion failed to conduct a reasonable investigation as required under 15 U.S.C. § 1681i, resulting in continued reporting of the inaccurate information.”
3. Failure to Notify Consumers of Negative Information
Claim: A creditor furnishes negative information to a CRA without notifying the consumer.
Relevant FCRA Sections:
- Section 623 (15 U.S.C. § 1681s-2): This section requires furnishers of information to notify consumers when they report negative information to CRAs.
Sample Claim: “Defendant [Bank] reported a delinquent account to Defendant Experian on [date]. Plaintiff was not notified by the bank about the negative reporting, which is a violation of 15 U.S.C. § 1681s-2(a)(7).”
4. Mixed File
Claim: A consumer’s credit report contains information that belongs to someone else, often due to similar names or Social Security numbers.
Relevant FCRA Sections:
- Section 611 (15 U.S.C. § 1681i): This section covers the CRA’s obligation to investigate disputes.
Sample Claim: “Plaintiff’s credit report, maintained by Defendant Equifax, contains multiple accounts belonging to another individual named John Smith. Despite multiple disputes filed by Plaintiff, Equifax failed to correct the mixed file, violating 15 U.S.C. § 1681i by not conducting a reasonable investigation.”
5. Unauthorized Access to Credit Report
Claim: A third party accessed a consumer’s credit report without a permissible purpose.
Relevant FCRA Sections:
- Section 604 (15 U.S.C. § 1681b): This section limits access to credit reports to specific permissible purposes.
Sample Claim: “Defendant ABC Company accessed Plaintiff’s credit report on [date] without any permissible purpose as defined under 15 U.S.C. § 1681b. Plaintiff did not apply for credit, authorize the inquiry, or have any existing relationship with Defendant.”
6. Failure to Provide Adverse Action Notice
Claim: A consumer is denied credit or faces other adverse actions based on their credit report, but the creditor fails to provide the required adverse action notice.
Relevant FCRA Sections:
- Section 615 (15 U.S.C. § 1681m): This section requires users of consumer reports to provide an adverse action notice if a decision is based on information from a consumer report.
Sample Claim: “On [date], Plaintiff applied for a loan with Defendant XYZ Bank and was denied. The denial was based on Plaintiff’s credit report, but XYZ Bank failed to provide the required adverse action notice, violating 15 U.S.C. § 1681m.”
Remedies and Damages
Under the FCRA, consumers can seek various remedies for violations, including:
- Actual Damages: Compensation for any actual harm suffered (e.g., denied credit, higher interest rates).
- Statutory Damages: Up to $1,000 for willful violations.
- Punitive Damages: Additional damages for willful violations intended to punish the violator.
- Attorney’s Fees and Costs: Recovery of legal costs and attorney fees.
CONSUMER RIGHTS LAW FIRM, PLLC
Consumer Rights Law Firm, PLLC is a law firm that specializes in helping clients who are facing harassment from debt collectors in any form, including telephone communication. Our office has been assisting consumers since 2010. We have an A+ rating with the Better Business Bureau.
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If you are interested in learning more about how to safeguard yourself, call us at (877)700-5790 for immediate assistance or visit our website at We Stop Debt Collection & Phone Harassment – Call Now at 877-700-5790 (consumerlawfirmcenter.com)
Success Stories
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