The Fair Credit Reporting Act: Damages for Inaccurate Reporting After Bankruptcy
Every person who has ever been extended credit should obtain a free, annual credit report. These could be obtained from the three consumer reporting agencies (TransUnion, Equifax and Experian). They should check to see if any person is furnishing the agencies with inaccurate or incomplete information. It is particularly important for individuals who have received a discharge in any chapter of bankruptcy. People should obtain and carefully review his or her credit reports approximately two to three months after being discharged.
It is not uncommon for creditors to furnish inaccurate information to one or more of the consumer reporting agencies. This can have an adverse effect on one’s credit rating or scores. The reporting of inaccurate information can give rise to valuable claims under the Fair Credit Reporting Act (the “Act”). We have recovered as much as $60,000 against a large financial institution for furnishing inaccurate information about a consumer to the consumer reporting agencies. Now, do I have your attention?
Certain steps must be taken before a consumer can sue a consumer reporting agency or person. The consumer must initiate a written dispute with the agency that issued a credit report containing inaccurate or incomplete information. Initiating a dispute with only the person who furnished inaccurate information to a consumer reporting agency is insufficient to trigger claims under the Act.
The dispute must be in writing, either online or via mail. Initiating a dispute by certified mail is preferable. Including return receipt requested to the consumer reporting agency that is reporting inaccurate or incomplete information is also advisable. Saving copies of letters is easier than screen shots if the information is entered online. Documentation must be saved if litigation ensues. The letter must contain all the information that is pertinent to the dispute so that person furnishing inaccurate or incomplete information and the consumer reporting agency can conduct a reasonable investigation/re-investigation of the dispute. Attached to the dispute letter should be all relevant documents.
Under the Act, a consumer reporting agency must provide notification of any dispute by a consumer to any person who furnished the agency with information in dispute by no later than the fifth business day after the agency receives notice. The notice by the agency must include all relevant information regarding the dispute that the agency has received from the consumer. This is why it is critical that the consumer provide as much detail and documentation to the agency as possible when initiating a dispute. There is no such thing as a consumer providing too much information or documentation concerning a dispute to a consumer reporting agency.
Within thirty days after receipt of a dispute by a consumer, the consumer reporting agency must conduct a “reasonable re-investigation”. This is done to determine whether the disputed information is inaccurate and record the current status of the disputed information. It can also require they delete the item, or modify information as appropriate. The consumer agency is required to provide written notice to a consumer of the results of its re-investigation of a dispute not later than five business days after completing its re-investigation.
Any person who furnishes information to a consumer reporting agency that receives notice of a dispute with regard to the completeness or accuracy of any information provided by that person must conduct an investigation. This investigation is with respect to the disputed information and they must review all relevant information provided by the consumer reporting agency. They then must report the results of its investigation to the consumer reporting agency.
If the information disputed by a consumer is found to be inaccurate or incomplete, the person furnishing the information to a consumer reporting agency must take action. They need to promptly modify that item of information, delete that item of information, or permanently block the reporting of that item of information. The investigation by a person who has furnished disputed information to a consumer reporting agency must be completed within thirty days of the date that a consumer initiates a dispute with the agency.
A consumer reporting agency or any person furnishing inaccurate or incomplete information to an agency may be sued by a consumer under the Act. The agency or person is responsible for not conducting a reasonable investigation or re-investigation of the disputed information, and is liable to the consumer for any actual damages sustained by the consumer for negligent noncompliance with certain requirements imposed under the Act (i.e., the requirement to conduct a reasonable investigation or re-investigation of disputed information contained in a credit report).
In a successful civil action, a consumer recovers actual damages under the Act. The consumer is also entitled to recover court costs and reasonable attorney’s fees as determined by the court. Any person who willfully fails to comply with certain requirements imposed under the Act with respect to a consumer is liable to the consumer for any actual damages sustained by the consumer, or damages of not less than $100 and not more than $1,000, such amount of punitive damages as the court may allow, and court costs and reasonable attorney’s fees as determined by the court.
To initiate a dispute as to any item of information contained in your credit report that you believe is inaccurate or incomplete, please call Mike Gartland at DelCotto Law Group (859) 231-5800 or email him at [email protected]lgfirm.com.