Credit Reporting Litigation

Fighting for New Yorkers’ Rights Under the Fair Credit Reporting Act (FCRA)

credit reporting litigation attorneys

Credit reporting can have an enormous impact on a person’s life. You probably know that consumer credit scores and credit histories impact credit card offers, auto loans, and financing of other consumer goods. But, many people don’t realize that credit ratings may also affect everything from the price you pay for car insurance to your ability to rent an apartment.

When you apply for a mortgage, your credit history will largely determine not only whether your application will be approved, but also your interest rate and other loan terms. In short, your credit score could save (or cost) you tens of thousands of dollars.

Clearly, it’s important that your credit report is accurate. However, a study conducted by the Federal Trade Commission (FTC) revealed that about one in five consumer credit reports contained a “potentially material error”—that’s an error that could impact the consumer’s credit score, access to credit, interest rates, and other options.

Too often, consumers feel powerless when they discover inaccuracies on their credit reports, file unsuccessful disputes, or have inquiries ignored. Fortunately, federal law provides consumers with powerful tools to fight back. The attorneys at the Schlanger Law Group LLP commit the full force of their extensive litigation and consumer protection experience to that battle.

Common Causes of Credit Report Inaccuracies

Some credit reporting errors are simple mistakes that you can easily resolve by filing a dispute. However, some inaccuracies are more difficult to correct, either because the credit reporting agency (CRA) or creditor is careless, or because a purported creditor is reporting dishonestly.

Credit Reporting Errors

Some of the most common reasons a credit report may contain errors include:

  • Mixed or merged consumer credit files: One of the most common credit reporting agency errors involves mixing or merging of consumer credit information. Most often, this occurs when two people have similar identifying information, such as names and Social Security numbers.
  • Reporting errors: Creditors have a legal obligation to report accurate information, but mistakes happen. A creditor may incorrectly report that a payment was missed because of changes in the creditor’s loan servicing procedures, or may simply fail to properly post payments or update balances due. Many creditors won’t take the initiative to resolve this type of error, putting the burden on the consumer to monitor his or her credit report and dispute any inaccurate entries.
  • Identity theft: Unfortunately, identity theft is extremely common, and thief isn’t always a stranger. A consumer may just as easily suffer identity theft at the hands of a troubled family member, a disgruntled ex-spouse or partner, or a dishonest business. Many consumers first discover that their identities have been stolen when unfamiliar accounts begin to appear on their credit reports. Although it wasn’t the consumer who opened those accounts or received funds, removing this type of information from your credit report can be difficult, and often requires the assistance of an experienced credit protection attorney

Fraudulent Credit Reporting

Though many credit reporting inaccuracies are honest mistakes, some creditors make fraudulent reports as a means of pressuring consumers to make payment. Some examples include “re-aging” to restore a debt that is too old to legally appear on the consumer’s credit report and reporting debt that has been discharged in bankruptcy.
Often, this type of fraudulent reporting isn’t discovered until the consumer applies for a mortgage, car loan, or other high-dollar loan. Dishonest creditors, debt collectors, and debt buyers count on a significant percentage of consumers paying the listed debt because it is the quickest and easiest way to clear the item and move forward with the loan.

Failure to Investigate and Correct Misreporting

Many credit reporting errors originate with a creditor’s accidental or intentional misreporting. However, when a consumer disputes a credit report entry, the credit bureau has an obligation to conduct a reasonable investigation and correct inaccuracies.
Some credit reporting agencies fail in this duty, or make it difficult and confusing for consumers to report inaccuracies. In such cases, the credit bureau may be liable for damages under the FCRA, even though the inaccuracy originated with the creditor.

Your Rights Under the Fair Credit Reporting Act

The Fair Credit Reporting Act, or “FCRA,” is a federal law that establishes the rights of consumers with regard to their credit reports. The statute also imposes obligations on credit reporting agencies, furnishers of credit information, and businesses and individuals using credit report data.

Some key FCRA provisions include:

  • Establishing the consumer’s right to review information contained in his or her credit report
  • Creation of a clear-cut dispute process for consumer’s identifying potential errors or fraudulent reporting
  • Mandatory procedures for CRAs investigating disputes and furnishers responding to requests for verification
  • A requirement that entities relying on credit report data to make adverse decisions notify the consumer in writing of their decision and the reason for it
  • Establishment of a window of opportunity to receive a free credit report after notification of an adverse action
  • A limitation on how long a debt may appear on a consumer’s credit report
  • An obligation to block any information that a consumer has identified as resulting from identity theft promptly after notification

The dispute process under the FCRA provides consumers with a means of correcting erroneous credit report information. But, that’s only the beginning. The statute also provides for damages and attorney fees when the CRA or creditor has willfully violated the law.

Damages Under the FCRA

Consumers who have fallen victim to knowing violations of the FCRA may be entitled to monetary damages. Depending on the type of violation and the extent of harm, the award may be based on the actual damages suffered by the consumer, or may be set by the statute. The FCRA also provides for punitive damages if the consumer shows willful misconduct on the part of the credit bureau or the creditor that reported the information.

If the consumer is successful, the FCRA makes the businesses that violated the law responsible for the consumer’s attorney’s fees. This is a powerful provision, as it allows consumers who could not otherwise afford attorneys to secure representation on a contingent basis and assert their rights.

New York Credit Report Litigation Attorneys

When inaccurate information on your credit report interferes with your ability to secure credit, affects your interest rates, makes a negative impression on prospective employers, or otherwise harms you, it’s time to fight back. Though the battle against a massive credit reporting agency, credit card company, or other entity may be daunting, you don’t have to face them alone.

Schlanger Law Group LLP’s practice is dedicated to protecting consumers’ rights. Consumer protection a complex area of law involving statutes with which many general practitioners have little experience or familiarity. Bringing cases on behalf of victims of inaccurate credit reporting is one of the firm’s core practice areas. To learn more about how we can help you fight back, contact us today.

Schlanger Law Group LLP serves clients in New York City, Westchester, Long Island, and throughout the United States with their consumer protection, class action, credit reporting, and identity theft issues.