Protecting New York Consumers Through FCRA Litigation
The federal Fair Credit Reporting Act (FCRA) requires credit reporting agencies (credit bureaus) and entities reporting information to those agencies to ensure the accuracy, privacy, and fairness of credit information. Unfortunately, not all creditors, debt collectors, debt buyers and others comply with the law. And, credit reporting agencies are often lax about fulfilling their obligation to investigate and correct information that has been disputed by the consumer.
Congress anticipated that protecting consumers might not be the highest priority for credit bureaus and those reporting to them. Therefore, the FCRA also contains powerful provisions to assist consumers in forcing compliance with the law. Under some circumstances, the statute even provides for monetary damages.
The attorneys at Schlanger Law Group LLP are dedicated to enforcing the FCRA and other consumer protection statutes on behalf of those who have been harmed by willful or negligent non-compliance. Our track record includes years of successful consumer protection litigation, including both individual and class action cases.
Credit Bureau Obligations Under the FCRA
In the United States, there are three main credit reporting agencies: Equifax, Experian, and TransUnion. Each of these agencies collects information about consumers, including payment histories, outstanding debt, employment, and other personal data. The agencies provide this data, along with a credit score based on the data collected, to a variety of entities seeking information about the consumer. Some of the most common examples include potential creditors, prospective employers, automobile insurance companies, and potential landlords.
These agencies, along with several more specialized credit reporting agencies, have several legally-mandated responsibilities under the FCRA. Some of the most important include:
- An obligation to provide you with your credit report upon written request, and to do so free of charge once a year and within a short window after you have received an adverse decision based on information provided by the credit bureau
- An obligation to promptly and reasonably investigate any disputed information on your credit report, and to correct or delete any inaccurate or incomplete information or information that cannot be verified
- An obligation to establish and follow reasonable procedures to ensure that the information they are reporting is accurate
- An obligation to remove outdated entries from your credit report—most information must be removed after seven years, though certain items are reported for ten years
- An obligation to limit disclosure of your credit report and credit score to those individuals and entities who are legally eligible to receive it
Obligations of Creditors and Others Furnishing Information to Credit Bureaus
Credit bureaus routinely receive information from banks, credit card issuers, mortgage lenders, automobile finance companies, collection agencies, and debt buyers. They may also receive information from governmental entities, utility providers, and others.
Each of these entities has an obligation to refrain from reporting information they know to be inaccurate, or that they reasonably should know is inaccurate. Some other obligations include:
Promptly updating and correcting any inaccurate information provided to credit bureaus
Establishing a procedure for responding to identity theft notices and refraining from reporting information on accounts attributable to identity theft
Notifying the credit reporting agency if you dispute a debt directly with the creditor, and refraining from reporting information about that debt until it has investigated your dispute
Obligations of Entities Receiving Credit Report Information
The FCRA also imposes obligations on those who receives and uses a consumer credit report for a permissible purpose. One key obligation is to advise you in writing if “adverse action” was taken based on information in your credit report. Some examples of adverse action include being turned down for a loan and having an application for an apartment denied.
This notice of adverse action must also contain the name of and contact information for the credit reporting agency that provided the report. When you receive this type of notice, you may request a free copy of your credit report from that agency.
Compliance with FCRA Provisions
While the obligations of both credit reporting agencies and those furnishing information to the agencies are clearly set forth in the statute, it is common for one or both entities to fail in its obligations. Some common examples include:
- Failure to appropriately investigate a disputed debt
- Failure to correct inaccurate information
- Re-reporting of accounts that have been removed as the result of a dispute
- Re-aging accounts to re-report or continue reporting them after they are legally outdated
- Re-reporting or continuing to report debts that were discharged in bankruptcy
When these and other violations occur, the FCRA provides legal remedies for the consumer, including statutory and actual damages. Punitive damages are also available, if the misconduct is deemed “willful”. In addition, the FCRA provides for mandatory attorney’s fees and costs to the successful consumer, meaning that the credit bureau or furnisher may be ordered to pay the consumer’s lawyer.
New York FCRA Litigation Attorneys
When your credit report contains inaccuracies, you may find it difficult to obtain financing for a home, car, or other important purchase. Even if your application is approved, false negatives on your credit report may result in higher interest rates and other unfavorable terms. Existing credit card accounts may be closed, or credit limits reduced.
Whether your identity has been stolen, a creditor or credit bureau has you confused with someone else with a similar name or social security number, or you have simply identified inaccuracies that the credit reporting agency can’t or won’t resolve, an experienced consumer financial protection litigator can be your best resource.
Credit reporting and identity theft/mistaken identity litigation is one of Schlanger Law Group LLP’s core practice areas, and we regularly litigate cases under the FCRA and the New York Fair Credit Reporting Act. Contact us today to learn more about how we can put that experience to work for you.