What Are My Rights If The Information On My Credit Report is Wrong or Incomplete?
The Fair Credit Reporting Act (FCRA) is a federal statute that was passed originally in 1970 and revised in 2003. It was passed with the goal of increasing the accuracy, fairness, and privacy of consumer’s information in the files of credit bureaus and other specialty consumer reporting agencies and in doing so promote efficiency in the banking system. See 15 U.S.C. § 1681. This blog will examine the rights that the FCRA gives to consumers to dispute inaccuracies on their credit reports and in some cases get compensation for a credit bureau’s failure to correct incorrect or inaccurate information.
The FCRA gives you the right to know the information that is contained in your file at a consumer reporting agency. These agencies collect information about you and provide reports to other companies to help them make credit-related decisions. The three most common consumer reporting agencies are the three nationwide credit bureaus: Equifax, TransUnion and Experian.
If your file at a consumer reporting agency contains items that are incorrect, incomplete or inaccurate, you have the right to dispute that information. Some of the most common FCRA violations include the following:
Reports that include inaccurate information
- inaccurate balances or payment history;
- reporting a debt as charged off when settled or paid in full;
- reporting a debt as an open balance when it was discharged in bankruptcy;
- reporting a debt that does not belong to you.
Reports that include outdated information
- re-aging an account to continue the reporting it;
- reporting negative information more than seven years old or bankruptcies more than ten years old.
Reports that include a merging of credit files
- duplicating negative credit information with a stranger who shares a similar name, social security number or some other personal identifying information.
Failing to follow proper investigation procedures
- failure to conduct a reasonable investigation into your dispute;
- failure to inform a creditor of your dispute;
- failure to update or delete inaccurate information from your report;
- Re-inserting previously deleted information without informing you.
Requesting a credit report for an impermissible purpose
- an employer pulling your report without your permission;
- a creditor of a paid and closed account pulling your report;
- a potential creditor that you have not applied for credit with accessing your report.
Dispute Errors On Your Report
Under the FCRA, both the credit reporting company and the information provider (the person, company, or organization that had provided information about you to the credit reporting company at issue) are responsible for correcting inaccurate or incomplete information in your report. To take advantage of your rights under the FCRA, you must contact both the consumer reporting agency and the information provider. Dispute letters with copies of any supporting documentation should be sent to both entities. The letter should be sent via certified mail with return receipt requested. The credit reporting companies must investigate the items in question unless they consider the dispute to be frivolous. Once disputed, these agencies must correct or remove incorrect, incomplete or inaccurate information in your file within 30 days. This does not mean that they must remove any and all negative information. A consumer reporting agency may continue to report information that it has verified as accurate.
When the investigation is complete, the credit reporting company must give you the results of the investigation. If an investigation doesn’t resolve your dispute with the credit reporting company, you can ask that a statement of the dispute be included in your file and in future reports.
You also can ask the credit reporting company to provide your dispute statement to anyone who received a copy of your report in the recent past. Please note that a consumer reporting agency may charge a fee for this service
File An FCRA Lawsuit
If the dispute process does not correct the problem, the FCRA provides a private right of action against consumer reporting agencies for their willful or negligent failures to comply with the FCRA’s requirements. You may seek compensation for the negative effects of having such inaccurate information on your credit report. For example, have you been unfairly denied credit when applying for a mortgage loan, credit card or auto loan? Or are you paying a high interest rate due to error on your credit report? You may have been damaged by a credit bureau’s inaction in correcting your information. You may be able to sue them in state or federal court. The lawsuit must be filed either two years after the date you discovered the violation, or five years after the date of the violation.
The amount of damages you are entitled to depends on whether the violation is either willful or negligent. If the violation of the FCRA was willful, you may recover either your actual provable damages or statutory damages of $100.00 to $1,000.00 per violation. In order to prove a willful violation of the FCRA, you must either the agency knew about the violation or acted with reckless disregard of their statutory duty. See Safeco Ins. Co. of America v. Burr, 127 S. Ct. 2201 (2007).
If the violation was due to the consumer reposting agency’s negligence, you are only entitled to your actual damages, the economic harm done to you as a result of . In addition, regardless of whether the violation was willful or negligent, the statute provides for compensation with regards to your attorney fees and legal costs. However, the FCRA has a penalty for filing a lawsuit or subsequent court papers that are later determined to have been filed in “bad faith.” If you file papers in bad faith, you may be liable for the other side’s attorney fees
Spokeo, Inc. v. Robins – Injury In Fact Requirement
In Spokeo, Inc. v. Robins, the plaintiff learned that his profile on the Spokeo “people search” website stated he was “an affluent fifty-something, with children, a job, and a graduate degree.” He filed a class action lawsuit because none of those facts were true and having that information on his profile damaged his employment prospects while he was unemployed. He alleged that Spokeo had willfully violated the FCRA by failing to follow reasonable procedures to ensure the accuracy of the information it was disseminating about him. Spokeo challenged Robins’ standing to bring the action, and the case was appealed up to the United States Supreme Court.
Justice Samuel Alito wrote the Court’s 6-2 decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016), which narrowly interpreted what constituted an injury under the FCRA. The court found that purely procedural or technical violations of statutory rights are insufficient to establish standing or the ability to bring the lawsuit. Justice Alito wrote that “standing requires a concrete injury even in the context of a statutory violation,” and that Congress has the authority to “elevate to the status of legally cognizable injuries concrete, de facto injuries that were previously inadequate at law.” However, the fact Congress has made a previously intangible injury actionable “does not mean that a plaintiff automatically satisfies the injury-in-fact requirement whenever a statute grants a person a statutory right and purports to authorize that person to sue to vindicate that right.” In other words, you need to show harm or injury that resulted from the inaccurate information in order to bring an FCRA lawsuit. To illustrate this point, Justice Alito point to the example of an incorrect zip code. While it may be technically incorrect, it does not harm or injure an individual’s credit or employment prospects.
The case was sent back to the lower court for further fact finding regarding the injury to Robins caused by the information in the Spokeo profile. In the lower court, Judge O’Scannlain concluded that if one’s age, marital status, educational background, and employment history, were inaccurately listed it was much worse that Justice Alito’s example of the incorrect zip code. He found this fact pattern was likely to harm one’s employment prospects and/or create emotional distress and that “flattering inaccuracies” could hurt one’s employment prospects because they may lead a prospective employer to (1) question the applicant’s veracity or (2) determine that he is overqualified. See Robins v. Spokeo, Inc. 867 F.3d 1108 (9th Cir. 2017).
Despite this Supreme Court’s ruling, FCRA litigation has continued to accelerate. Furthermore, while we have been discussing the individual’s right to bring a lawsuit against consumer reporting agency for inaccurate information on a credit report, some attorneys have been bringing class action lawsuits for violations of the FCRA. In a class action, you sue not just for your violation but for all the similar plaintiffs in your same position.
A recent study released by the Federal Trade Commission found that 23% of consumers identified inaccurate information in their credit reports, which means there are many potential FCRA plaintiffs who have not be compensated for the damage done to their credit because of errors on their credit reports.
We recommend obtaining a free credit report every year from each of the three major credit bureaus from annualcreditreport.com. For consumers who have filed bankruptcy, we recommend checking their credit reports 90 days after discharge to ensure that the bankruptcy is being accurately reflected on their reports.
David I. Pankin is a Brooklyn bankruptcy attorney helping clients with consumer protection matters. If you have any questions about the FCRA or think there may be errors on your credit report, please contact the Law Offices of David I Pankin, PC at 888-529-9600 or by using our easy online contact form.
Fair Credit Reporting Act 15 USC § 1681
Request a Free Credit Report
Disputing Errors on Credit Reports
Spokeo, Inc. v. Robins (Supreme Court Opinion)
Robins v. Spokeo, Inc. (Later 9th Circuit Opinion)