Key Takeaways
- Fair Credit Reporting Act (FCRA) violations occur when consumer reporting agencies include inaccurate, misleading, incomplete, false, outdated, and unreportable information in consumer reports
- Common consumer reports include credit reports, background checks, employment background checks, tenant screening reports, and insurance reports
- Errors in consumer reporting lead to credit and loan rejections, mortgage denials, lost job opportunities and deactivations, rental denials, and higher insurance costs, security deposits, and interest rates
- Under the FCRA, the companies that make the reports and provide the data have legal obligations to report accurate information and investigate and correct errors
- If FCRA violations cause you harm or errors go uncorrected, you have legal remedies
- An FCRA lawyer helps you dispute errors, restore your reputation, and pursue compensation under federal law
What Is the Fair Credit Reporting Act (FCRA)?
Overview of the FCRA
The Fair Credit Reporting Act (FCRA) is a federal law enacted to protect consumer data in the for-profit consumer reporting industry. It provides limitations on how your data can be accessed and used, places requirements on accuracy and privacy, and sets out procedural and legal rememdies for what you can do if errors are reported or your data is mishandled.
Who the law applies to
The Fair Credit Reporting Act applies to consumer reporting agencies, companies that furnish information to consumer reporting agencies, and businesses that use consumer reports to make decisions about credit, employment, housing, insurance, or other eligibility matters.
Consumer reporting agencies (CRAs)
Consumer reporting agencies (CRAs) are the companies that compile and sell your consumer data as a report to other companies for use in financial, credit, employment, rental, insurance, and other decision-making. They include credit bureaus, background check companies, tenant screening agencies, insurance reporting companies, prescription history reporting companies, insurers, and more.
Data furnishers
Data furnishers are the companies that provide your consumer data to the CRAs. These are typically the companies that you do business with, such as banks, credit card companies, mortgage lenders, auto lenders, utility companies, and more.
Why accurate consumer reports matter
Accurate consumer reports matter because the information included in these reports is used by decision-makers to determine some of the most consequential outcomes in your life. For instance, consumer reports are used to determine whether you can have access to credit cards, personal and auto loans, mortgages, jobs, security clearance, professional licensing, insurance products, rental apartments and homes, and more.
Types of FCRA Violations
While there are many ways that companies can violate the FCRA in how they handle and manage consumer data, these are some of the most common categories and types of violations.
Credit Reporting Errors
- Incorrect account information
- Unauthorized accounts created through identity theft
- Incorrect balances and statuses
- False payment information, including missing and late payment data
- Mixed credit files- someone else’s information mixed in with yours
- Duplicate accounts
- Outdated information
- Failure to correct disputed information
Background Check Errors / Employment Background Check Errors
- Criminal records belonging to someone else (mixed files)
- Expunged or sealed records
- Inaccurate employment history
- Incorrect education verification results
- Inaccurate criminal records, including wrong charges or disposition
- Failure to provide required notices
- Incomplete, missing, or misleading criminal data
- Duplicate entries
Tenant Screening Report Errors
- False eviction records
- Incorrect rental payment history
- Mixed files- someone else’s credit, background, or rental data mixed into yours
- Failure to investigate disputes
- Incorrect criminal history
Insurance Report Errors
- CLUE report errors
- Auto insurance claim reporting mistakes
- Property insurance claim inaccuracies
- Prescription history report errors
- Incorrect underwriting information
Identity Theft Reporting Errors
- Fraudulent accounts
- Unauthorized inquiries
- Identity theft-related collections
- Imposter-related public records
- Failure to block identity theft information
- Reinserted fraudulent information
Signs You May Have an FCRA Claim
Most people discover FCRA violations the hard way- after losing out on an important opportunity or getting no where with consumer reporting agencies when trying to dispute and correct inaccuracies. Here a few examples of scenarios that should raise a red flag and cause you to take a deep dive into any consumer report associated with the opportunity.
- Loan application denied unexpectedly
- Higher interest rates despite good credit
- Job offer withdrawn after a background check
- Rental application rejected
- Insurance rates increased without explanation
- Turned down for a credit card you anticipated would be approved
- Deactivated from current rideshare or delivery driver app
For others, signs of an FCRA claim come after the dispute process has started:
- Disputes repeatedly ignored
- Information reappears after being removed
- Consumer reporting agency refuses to correct obvious errors
- Consumer reporting agency falsely claims investigation “verified” the errors
What Compensation May Be Available?
When we talk about compensation in civil law cases, including lawsuits for FCRA violations, we discuss the “damages” available, meaning the types of harms for which you may receive compensation.
- Economic damages: financial damages resulting from the errors, including lost wages and opportunities, out-of-pocket expenses (like costs associated with temporary housing or storage, postage, fees, etc.), higher interest rates or premiums
- Statutory damages: financial penalties assessed against the consumer reporting agencies for certain violations of the FCRA, ranging from $100 to $1,000 per violation
- Non-economic damages: stress, anxiety, depression, humiliation, reputational damage to your professional reputation, creditworthiness, and more
- Punitive damages in appropriate cases where the evidence supports the allegation of willful conduct on the part of the consumer reporting agency
- Attorney’s fees and costs: the FCRA fee-shifting provision makes the consumer reporting agency pay your legal bills when you’re successful against them in a lawsuit
How the FCRA Dispute Process Works
If you need to dispute consumer reporting errors under the Fair Credit Reporting Act (FCRA), there is a general process for filing disputes and a mechanism for escalating your dispute to a lawsuit if needed to get corrections or compensation.
How to Dispute Consumer Reporting Errors that Violate the FCRA
These steps for the dispute process apply to errors on consumer reports, including credit reports, background check reports, employment background check reports, tenant screening reports, and insurance reports.
- Get copies of your consumer report. You have a right to receive and review a copy of your report at the time that it’s run. If you didn’t receive a copy automatically, you can request one directly from the consumer reporting agencies that ran the report.
- Review your report for mistakes. Carefully review your report. Go through line by line, highlighting or clearly marking any errors in your personal, financial, criminal, and other details. You are looking for any inaccurate, misleading, incomplete, outdated, duplicate, or unreportable information.
- Gather evidence. You’ll need to include copies of supporting documents and reference them in your dispute letter.
- Write a dispute letter. Prepare a clear and thorough dispute letter, listing specific errors, explaining why the information is wrong, and describing the evidence you have to support your position. What is wrong, why it’s wrong, and what proof you have.
- Submit your dispute. You file a dispute with the company that created the report using their online dispute portal or mailing address. We recommend filing by certified mail to preserve all of your legal rights and create a paper trail that is under your control, including proof of receipt.
- Keep copies of everything. Maintain a copy of the letter and the documents for your file, along with the mail receipt and any adverse action notice or related communications.
- Track the timing. The consumer reporting company has 30 days to respond in most instances.
- Consider legal action. You can explore legal options with an FCRA lawyer at any point in the process, including the option to file a lawsuit and seek compensation.
When Should You Contact an FCRA Lawyer?
Correcting consumer reporting errors is something you can do on your own and many people have successful outcomes. However, what should be simple can also be turned into a complicated and convoluted process by the consumer reporting agencies and other companies involved.
Reasons to Contact an FCRA Lawyer
- Your dispute is ignored
- Your dispute is not adequately investigated
- The information in dispute is falsely confirmed as accurate by the screening company
- The information in dispute is removed but returns again
- You suffered harm as a result of the errors or failed dispute process
What Does an FCRA Lawyer Do?
- Supports the entire process. An FCRA lawyer navigates the entire process with you, from the first minute you realize there’s an error until the final moment when you get corrections and compensation.
- Researches and explains the law. Understanding the specific facts of your situation in light of the applicable law are how a lawyer builds a strong claim. A lawsuit should go after the screening company using every possible legal option available.
- Understands the problems. An experienced FCRA lawyer has seen, heard, and handled every type of reporting error.
- Anticipates legal challenges. A lawyer knows the tactics used by the screening companies and other companies to delay doing anything to fix reporting errors.
- Provides personalized legal guidance. A lawyer helps you review and understand your background check report, where the information is coming from, identify and gather necessary evidence, craft and file legally sound dispute letters, and advise you of your rights and best practices along the way.
- Files a strategic lawsuit. If errors aren’t corrected or the fallout persists, a lawyer files a background check lawsuit to hold the consumer reporting agency accountable.
- Seeks compensation. If you’ve been harmed by reporting errors and you’re entitled to compensation, a lawyer knows how to make the claim and maximize the potential outcome.
How Much Does an FCRA Lawyer Cost?
The Fair Credit Reporting Act contains a fee-shifting provision which allows you to get legal help from an attorney without paying anything upfront or out of pocket. If you work with a lawyer who uses this fee model, the consumer reporting agency pays your legal expenses when you successfully challenge them.
You can also get a free consultation so that you pay nothing to have your case evaluated by a lawyer.
Key Takeaways on Costs
- Free consultation
- No out-of-pocket attorney fees
- Fee-shifting provisions under the FCRA
- Recovery of attorney fees from defendants when permitted by law
Contact Consumer Justice Law Firm
We have one of the largest consumer reporting law firms in the nation for a reason. Our team of experienced consumer protection attorneys are dedicated to protecting your consumer rights under the FCRA.
If you’ve been harmed by FCRA violations like consumer reporting errors and ignored or mishandled disputes, reach out for a free consultation and personalized legal action plan from Consumer Justice Law Firm.
Frequently Asked Questions
What is considered an FCRA violation?
An FCRA violations is anything that violations your rights or a consumer reporting agencies obligations under this federal law. It includes things like consumer reporting errors in credit reports, background checks, employment background checks, tenant screening reports, and insurance reports, and ignored or mishandled disputes.
Can I sue for a credit reporting error?
Yes. Not every credit reporting error requires a lawsuit, but if a credit report dispute fails or is ignored or mishandled, or you suffered harm because of an error, a lawsuit is strong legal option that should be considered.
How long do reporting agencies have to investigate a dispute?
Under the FCRA, consumer reporting agencies typically must respond to a dispute within 30 days.
Can I sue if a background check cost me a job?
It depends. If a background check error cost you a job, then yes. If accurate information in your background check cost you a job, then likely no.
What should I do if identity theft appears on my credit report?
If unauthorized accounts, debts, loans, and information appear on your credit report after identity theft, you need to dispute it. Working with a credit report error lawyer can help you build a personalized recovery plan.
Can tenant screening errors violate the FCRA?
Yes. Tenant screening companies are regulated consumer reporting agencies under the FCRA. A tenant screening report that includes inaccurate, misleading, incomplete, false, duplicate, outdated, or unreportable information violates the FCRA.
Are insurance reports covered by the FCRA?
Yes. Insurance reports, also called insurance background reports, are covered by the FCRA. Inusrance report errors can be disputed and you may be entitled to compensation.
How much is an FCRA case worth?
The value of an FCRA case is highly specific to the facts and circumstances of the unique situation. One person may have a case worth tens of thousands of dollars in damages, while another person may have a case worth hundreds of thousands of dollars in damages.
If you’ve experienced harm caused by FCRA violations or had a dispute ignored or mishandled, get a FREE consultation. You pay $0 out of pocket. We only get paid when we win. No Justice, No Fee™