Cases involving errors on your credit report fall under the Fair Credit Reporting Act
Your good name is one of the most valuable things you possess. Yet, according to a study conducted by the United States Public Interest Research Group, over 79% of credit reports from the national credit bureaus (Experian, Trans Union and Equifax) contain either serious errors or mistakes of some kind. These errors can have serious impact on a person’s life, as credit reports are used from everything from granting credit and setting interest rates to obtaining insurance and employment.
The Fair Credit Reporting Act (15 U.S.C. § 1681 et seq.) is the federal legislation that regulates the credit reporting industry, including the national credit bureaus Equifax, Experian and Trans Union. The Fair Credit Reporting Act, or “FCRA”, was enacted to protect consumers from the damage that errors in their credit reports could cause. Perhaps most important to consumers, the FCRA established the mechanism used to dispute inaccuracies appearing on consumer’s credit reports. Once an inaccuracy (i.e. an account that is not the person’s account but is showing up on their credit report or an account that is reported as derogatory but was never past due, etc.) is disputed to the credit bureau which is reporting the inaccuracy, the credit bureau has 30 days to perform a reasonable investigation of the disputed item. The FCRA also requires that the credit bureau relay the consumer’s dispute to the company that furnished the disputed information (called the “furnisher”) who then must also reasonably investigate the dispute. Once the “investigation” is complete, the credit bureau must send an updated copy of the credit report to the consumer, showing the results of their investigation.
The credit bureaus often fail to perform the reasonable investigation required by the FCRA. When that happens, the consumer has a claim under 15 U.S.C. § 1681i. If the furnisher fails to perform a reasonable investigation, which also happens quite often, the consumer has a claim under 15 U.S.C. § 1681s-2(b).
The FCRA also requires credit bureaus to follow reasonable procedures to assure maximum possible accuracy of the credit reports they generate. 15 U.S.C. § 1681e(b). Despite this requirement, the credit bureaus often publish credit reports that contain obvious errors, such as when the credit bureaus combine the credit information of one consumer with that of another consumer who has a similar name and/or social security number.
If the credit bureau and/or furnisher negligently violate the FCRA, the consumer can recover his or her actual damages, plus attorneys’ fees and expenses. 15 U.S.C. § 1681o. If the violation is willful, i.e if it was done either intentionally or with reckless disregard, consumers can also recover punitive damages. 15 U.S.C. § 1681n.
The typical lawsuits fall under three categories.
One is the identity theft victim, who has his identity stolen when the imposter opens credit cards, etc. using his name and social security number. Of course, the identity thief doesn’t pay the bill, resulting in the credit card being charged off and reported onto the identity theft victim’s credit report as a bad credit item. The victim learns of the fraud account(s) when he or she is denied credit and requests a credit report to learn why. The victim then disputes the fraud account(s) but because the credit bureaus and furnishers almost never go beyond simply comparing the name and social security number of the person to the name and social security number on the account (which in identity theft cases almost always match, hence the identity theft), the fraud accounts do not get removed, ruining the person’s credit.
Another common case is the mixed file case where the credit bureau mixes the credit files of two people with similar names and/or social security numbers. If one of these people has bad credit, it lands on the other person’s credit report, ruining his or her credit. The same dispute process is used and sometimes works, but often just for a short while because, when the report is re-generated in the future, the same loose matching logic is used, causing a re-mixing of the two credit files.
The last common case is where something is just mis-reported by the furnisher – i.e. a credit card company reports an account as late which was never late. If the credit bureau and/or credit card company fails to correct the error after it is disputed to the credit reporting agency, the consumer has a claim under 15 U.S.C. § 1681i.
The Kittell Law Firm is the only law firm in Mississippi that routinely represents consumers in Fair Credit Reporting Act litigation and one of the few such firms in the nation. Christopher Kittell has spoken multiple times at the annual FCRA conference hosted by the National Association of Consumer Advocates since the conference’s inception in 2001. Kittell usually speaks multiple times over the weekend long seminar and has helped plan the seminar the last few years.
In addition to Mississippi, Kittell has represented consumers in FCRA cases all over the nation, including cases in New York, Montana, Connecticut, Arizona, Kansas, Colorado, Alabama, Georgia, Tennessee, Louisiana, Maryland, and Indiana and cases currently underway in New Jersey, Oklahoma, Texas, and Virginia.
In one case, Kittell represented a young woman who sued a major bank for fraudulently reporting her to a credit bureau even after she had proven by the bank’s own procedures that the charged off account the bank was reporting was not hers. As part of Kittell’s representation of this client, two mock trials were conducted and both mock juries returned large verdicts for the client. A settlement conference was conducted with the bank, during which the mediator and representatives of the bank were shown video of the mock jury deliberations and verdicts. The bank then settled the case for $600,000.00.
In another case, Kittell was co-counsel on a lawsuit against Trans Union that resulted in a verdict of $4.47 million dollars, which at the time was the largest verdict ever against a credit bureau. In that case, Trans Union had corrected the erroneous accounts appearing on the consumer’s credit report after a previous lawsuit, only to reinsert the erroneous accounts mere months later. The jury awarded the consumer $50,000 in actual damages and $4.47 million dollars in punitive damages.
The recent amendments to the FCRA require the credit bureaus to each give you one free credit report per year. A website called www.annualcreditreport.com was set up to facilitate requesting your free credit reports. However, DO NOT USE THIS WEBSITE as the credit bureaus insert arbitration clauses into your online requests for your credit report, which could potentially waive your right to a damages trial. To request your free credit report from each of the three national credit bureaus, use the written form (which does not contain an arbitration clause) which you can download from https://www.consumer.ftc.gov/articles/pdf-0093-annual-report-request-form.pdf and then mail to the address on the form.
If you need to dispute errors on your credit report, write letters (sent certified mail, return receipt requested, if possible) disputing the errors to the following addresses:
Experian Information Solutions
701 Experian Pkwy
Allen, TX 75013
Equifax Information Services
P.O. Box 740256
Atlanta, GA 30374
P.O. Box 2000
Chester, PA 19022
In your dispute letters to the credit bureaus, be sure to include your full name, Social Security number, date of birth, address and phone number in your dispute letter and itemize each error/account that you are disputing.