A person’s credit is an extremely valuable thing. Credit effects a person’s ability to borrow money for a home, obtain insurance, obtain credit cards from banks, and even find a job. A consumer’s credit is generally reported through what are known as consumer reporting agencies, which are businesses that collect and disseminate information about consumers that is used for credit evaluation and other purposes, including employment. The familiar credit bureaus (Equifax, TransUnion and Experian) are credit reporting agencies, and hold a consumer’s credit report in their data base. Fortunately, there is a federal law that allows consumers who are harmed by inaccurate credit reporting information to seek damages from either the credit reporting agencies or the creditors who report to the credit reporting agencies.
The Fair Credit Reporting Act is a federal law that was originally enacted 1970, and which is enforced by the United States Federal Trade Commission. The law also provides private people with the right to sue for damages that consumers suffer due to erroneous or inaccurate credit reporting. The most common types of errors are those that are made by the carelessness of one of the credit reporting agencies, and include errors resulting from confusion of people with similar names. Errors are also often made by the creditors reporting debts to the credit reporting agencies, which often include reporting debts to the credit reporting agencies that have already been paid. Errors are also often made when the creditors or the credit reporting agencies fail to remove debts that have been resolved through bankruptcy or which have been eliminated during a lawsuit. In any event, a credit error can have a serious impact upon a consumer, and can dramatically effect a person’s life and employment.
The Fair Credit Reporting Act allows consumers who are damaged by credit errors to sue the credit reporting agencies and/or the creditors for the damages that they suffer. The law provides for the credit reporting agencies’ and the creditors’ liability for both willful (that is, intentional) violations of the Fair Credit Reporting Act, and also provides for their liability for violations of the Fair Credit Reporting Act that are simply negligent. The law also provides that a consumer who wins a case against a credit reporting agency or a creditor can recover his or her attorneys fees. Punitive damages are also available, not to compensate an injured consumer, but rather to punish a creditor or credit reporting agency that is responsible for a consumer’s damages.
In one significant case, a jury in Orlando, Florida awarded $2.9 million to a consumer whose credit file had been mixed up with another person with a similar name and social security number. The credit reporting agency was repeatedly notified of the dispute and of the mixup, and although the agency had repeatedly removed the inaccurate credit entries from the consumer’s account, it ended up later including them, and others, on her credit report. The errors resulted in approximately 25 false accounts being placed on her credit report over the years, which caused the consumer to suffer the denial of credit, damages to her reputation, economic damages, and emotional distress. The jury heard evidence from which it concluded that the credit reporting agency was careless and thereby did not comply with the Fair Credit Reporting Act, and awarded the consumer a substantial amount of money.
Errors on credit reports can be haunting to consumers, and it therefore important to be vigilant about your credit report. There is a specific statute of limitations contained in the Fair Credit Reporting Act, so if you believe that you have been damaged as a result of an error on your credit report, you should act promptly such that your rights are not waived. If you, or someone you know, has been injured by inaccurate credit reporting, please contact us so that we may discuss your legal rights.