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Money and Debt

Introduction

The Fair Credit Reporting Act (FCRA) provides consumers with a strong legal claim for inaccurate consumer reporting and other events related to consumer reports. Fair Credit claims can be asserted against, credit reporting agencies, background screening agencies, banks, credit card companies, and collection agencies. Consumers can recover economic and non-economic damages, punitive damages and attorney fees. You can get a copy of your credit report at www.annualcreditreport.com. You can get a report if you are denied for a loan or credit. Your credit score determines how much you pay for things like insurance, loans and credit. Check your report for inaccuracies. 

Letter Disputing Items on Your Credit Report

Duty to Assure Accuracy

A consumer reporting agency (CRA) must follow “reasonable procedures to assure maximum possible accuracy of the information” it reports. 

How to Dispute Inaccurate Information

  • Make a written dispute rather than by telephone or online (telephone follow up is okay).
  • Identify the item specifically, e.g., by name and account number.
  • State why it is inaccurate.
  • Provide any information or documents that prove it is inaccurate.
  • State how the item is damaging you. 
  • Provide ID with name, SSN and current address. 
  • Mail by certified mail or with proof of mailing. 
  • It’s optional whether to send the same dispute to furnisher. 
  • Information resulting from mixed files or identity theft may violate this section, and it is a stronger case if the CRA has been notified of the fraud or identity theft. 

Blocking Information from ID Theft

CRAs must block reporting of any information that the consumer identifies as resulting from an alleged Identity theft upon receipt of: 

  • Appropriate proof of identity
  • Copy of an ID Theft report. 
  • Identification of such information by the consumer.
  • A statement by the consumer that the information is not related to any transaction by the consumer. 

The information must be blocked within four business days after receipt.

The CRA must promptly notify the furnisher of the blocking. 

Limitations on Reporting Consumer Information

  • CRAs may only furnish a consumer report to a person “which it has reason to believe…intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished.” 15 USC §1681b(a)(3)(A). 
  • A transaction not involving credit does not provide a basis for providing or obtaining a credit report, even if used for collection of the debt arising from the transaction. 
  • A credit transaction involving the identity thief is not a transaction “involving the consumer” within this subsection. 
  • Companies that obtain the victim’s consumer report for transactions involving the identity thief are also subject to liability under this section. 

Consumer Reporting Agencies

CRAs are companies that compile consumer credit information or other information for the purpose of furnishing consumer report to third parties.15 USC §1681a(f). 

 

The Big 3 are: Equifax, TransUnion, Experian. There are employment screening companies that obtain public records. Specialty CRAs compile and maintain records for medical records, residential and tenant history, employment history and insurance claims. 15 USC §1681a(p) and (w). 

 

Are Background Check Companies “Consumer Reporting Agencies?” YES, most qualify because they: 

  • Regularly engage in practice of compiling information on “consumers.” for the purpose of furnishing “consumer reports” to third parties for a fee and do so through interstate commerce. 15 U.S.C. §1681a(f) 

Important Notices to Consumer

  1. Notice by CRA: Where potentially adverse public record information is included in a report, CRA must provide notice to the consumer at the time this information is reported to the employer: that it is reporting public record information, the name and address of the person to whom the information is being reported, or in the alternative, CRA must use “strict procedures” to insure public record information reported is complete and up to date.15 USC §1681k(a)(1) and (2) Strict procedures per 15 USC §1681k(a)(2) are more rigorous than “Reasonable Procedures.”
  2. Notice by Employer:  Before taking any adverse action based in whole or in part on the report, the person intending to take such action shall provide the consumer: 

A copy of the report, and a description of the consumer’s rights under the FCRA 15 USC §1681b(b)(3). Failure to give notice violates “Conditions on use for adverse action.” “Adverse Action” includes: Job denial, firing, demotions, and reassignment. 

 

How far in advance must documents be sent? 

It must be sufficient to allow consumer to resolve inaccuracies before any decision is made. 

You must file an action the earlier of two years after discovery of the violation, or 5 years after the date of the violation. 15 USC §1681p. 

Damages

Actual damages include: 

  • Denial of credit, increased cost of credit, lost opportunity to obtain credit, and failure to receive unsolicited offers. 
  • Damage to reputation, derogatory info sent to insurers, creditors, banks and employers. Recipients on the credit report show who has received it. 
  • Reputation in profession or among peers.
  • Loss of financial independence
  • Loss of self esteem
  • Invasion of privacy
  • Emotional distress, embarrassment, frustration of:
    • being denied credit
    • having to explain errors on the credit report
    • having to dispute with the defendant
    • frustration of the defendant not fixing it
    • knowing that false information is being reported
    • Physical symptoms: headache, loss of sleep, nausea, crying, irritable 
    • Interference with normal and usual activities (time spent trying to fix errors, get credit, review reports
    • Interference with work, distracted, inability to concentrate

Duty of CRA to Reinvestigate Disputed Information

  • CRA must do reasonable reinvestigation of any information disputed by a consumer. 
  • CRA must notify furnisher of the dispute within five days. 
  • CRA must provide furnisher with all relevant information provided by consumer. 
  • CRA must delete or modify information that is found to be inaccurate or incomplete or cannot be verified. 
  • CRA must complete reinvestigation within 30 days. 
  • CRA must send consumer written results of reinvestigation. 

Duty of Furnisher to Investigate

  • Furnisher must investigate upon receiving dispute notice from CRA. 
  • Investigation must be reasonable.
  • Furnisher must review all relevant information sent by CRA.
  • If furnisher finds the information is inaccurate or incomplete, it must: 
  • Report results to all CRAs to which it furnished the information and delete or block the reporting of the information to CRAs. 
  • Investigation must be completed within 30 days. 
  • No cause of action if the dispute is directly from consumer. 
  • If inaccurate information is disputed and not corrected, you have a case.