Suing under the FCRA (Fair Credit Reporting Act) when false credit reporting continues even after you disputed it
In this article we’d like to look at this comment from Kevin Davila:
Hi john..love the videos..looking forward to the free series…i have a question..since im on my own and no attys like you in my area..how do i overcome the response form the cra..continually saying sorry the creditor said its accurate..even when you provided proof..do i send letter to cfpb ?? Any info is appreciated.
We appreciate Kevin’s comment, and appreciate the kind words. Let’s dive right in!
First, we’d like to touch on Kevin’s comment about not having attorneys in his area.
Let’s take a minute and think about this.
Traditionally speaking, there are attorneys who will only practice in one city. For example, some attorneys will only take cases in the Atlanta area, which is 5 counties or so.
That means they won’t go to Savannah, south Georgia, etc.
With our firm, we’re licensed in Alabama. For us, that means we take cases from all over the state of Alabama, from Huntsville to Mobile, and everywhere in between. Frankly, if other attorneys bring us into cases in other states, we go to those states as well.
There’s a fear that you won’t do well if you’re not in your “home court,” but we’ve been to Manhattan, Georgia, and other places with lawsuits and it’s always been fine. Normally we are in federal court and it is basically the same everywhere.
We say all of that to say that consumers shouldn’t limit themselves to just their “neck of the woods” when they’re looking for an attorney. Look at who practices in your state and figure out what the best option is for you.
Another thing to consider is that if you have a legitimate claim, the case doesn’t always have to be brought in your state.
Let’s say that you owe Portfolio $5,000, and you settled with them for $3,000. Now they’re reporting $2,000 on your Equifax credit report. You keep disputing it with Equifax, and they say that the information is accurate and nothing needs to be changed.
You can sue Portfolio (maybe Equifax also depending on your dispute) in any state at this point. You could file the lawsuit in Alabama if you wanted. There’s always a chance it will get moved back to your home state, but if it does you and your Alabama attorney would find a lawyer in your state to help get your attorney into the court system for that case.
The bottom line is that there are options available if you’re looking for an attorney’s help with your case.
Let’s switch gears for a moment and dive into Kevin’s question about how to deal with the credit reporting agency.
We don’t think this is Kevin’s case, but something that happens from time to time is that a consumer will dispute with the credit agencies several times, and then they will come to us and ask for help. We look at their disputes, and their dispute is something like, “money isn’t real in America, so I owe nothing.”
Maybe that’s true in some sort of way, however none of the state or federal judges we’ve had cases with have sided with consumers in this argument.
However, if you have a case that’s legitimate (like our example of owing $5,000, settling with the collector for $3,000, and Equifax reporting you still owe $2,000) and they continue to not fix the issue, then you should look at suing them.
Make sure that all credit reporting agencies are reporting correctly. When one of them isn’t reporting correctly, the others quite often are wrong as well. And you may be in a position to sue the furnisher. The furnisher is the one who provided the information to the credit bureau.
If the credit agency repeatedly ignored your disputes, then at some point they reach a level of willful violation of the law.
Negligence is a dispute with the creditor, and they fail to do a proper investigation but it was not reckless or intentional.
Intentional (or willful) negligence is a whole new level. It’s reckless and dismissive of the the rules. Once credit reporting agencies or furnishers get to this level of bad conduct, consumers can get punitive damages and statutory damages under the FCRA.
With a negligence case, you can be compensated for the economic and emotional damage from the creditor. Punitive damages are for punishing the creditor for their wanton behavior to the consumer.
You can also get statutory damages under the FCRA (Fair Credit Reporting Act), which are up to $1,000 per violation. This is different from the FDCPA. With the FDCPA, it’s $1,000 for the case, no matter how many violations are in that case.
The FCRA, however, allows for more damages to be paid to the consumer.
In cases with credit reporting agencies, the bulk of the damages paid to the consumer will come from emotional damages.
Our argument with the jury is usually, “How big do the damages have to be before the credit reporting agency pays attention and starts following the rules?”
Is it $1,000? $10,000? $100,000? $1,000,000?
Legitimate cases against the credit agencies will get these companies to fix your credit reports.
They don’t want consumer protection attorneys going before the court and explaining to the judge and jury how badly their company has messed up.
Suing these companies will get them to fix your report, because they want to keep your damages as low as possible. So their thinking is if they (finally) fix the error, they won’t get popped so much at trial. It doesn’t always work out for them this way but this is their normal strategy.
This is a little bit of a detour from our question, but it’s important to understand that taking action when they’re violating the law will make them stop, and think before they violate the law again.
We hope this was helpful to you.
If you have any questions, feel free to get in touch with us!
You can reach us by phone at 1-205-879-2447, or you can fill out a contact form and we will get in touch with you quickly.
We’d be glad to help you in whatever way we can!
Have a great day.