Your credit score is an important aspect of your financial health and can have a direct impact on the monetary and employment opportunities available to you. That's why it's critical to regularly monitor your credit report for mistakes and get them fixed right away. Unfortunately, sometimes credit bureaus do not adhere to their legal obligations to fix reporting errors, causing consumers untold angst and losses. However, the Fair Credit Reporting Act (FCRA) has provisions that allow consumers to sue reporting agencies for violations of the law. Here's what you need to know about getting compensated for your losses.
Under the FCRA, you can either pursue actual damages or statutory damages. If you choose to go after actual damages, you must prove you sustained losses and those losses were the direct result of the agency's action or inaction. For example, if you were charged a higher interest rate on a home loan because the credit agency failed to fix a mistake on your report, you can request to be compensated for that.
Statutory damages, on the other, do not require you to prove you were harmed. However, you can only collect between $100 and $1,000 per violation. So even if you weren't turned down for credit or otherwise harmed by the credit agency's actions, you can still recover money based on the violation itself.
You may also recover actual damages, attorney's fees, and court costs if you can prove the agency acted negligently in its failure to adhere to the law. For example, an Oregon woman was awarded over $18 million against Equifax because of the company's failure to correct erroneous information on her credit report.
According to available information, representatives of the company informed the woman that some of her information had been mixed up with another consumer's. Additionally, she claims she was told she had to contact the creditors directly to get the mistakes fixed. However, it is the responsibility of the credit reporting agency to ensure the information they have on file is accurate. Credit agencies are required by the FCRA to launch investigations into reported errors and remove any information it is unable to verify or has been proven to be incorrect.
The failure of credit reporting agencies to follow rules such as this may form the basis for a personal injury lawsuit and allow consumers to collect compensation for willful and negligent actions.
Lastly, if the company's actions are particularly egregious, the court may also award punitive damages as a way of punishing the agency for failing to comply with the law. Out of the $18 million the Oregon woman was awarded, only $180,000 of it was for actual damages. The rest were punitive damages levied against credit agency by the jury.
Prior to Filing a Lawsuit
Before you can file a lawsuit against the credit reporting agency, you must attempt to go through the standard dispute channels to get the problem fixed. Failure to do so could cause you to be charged with filing a frivolous lawsuit and made to pay the agency's legal fees.
Additionally, going through the dispute channels can often clarify who's at fault for the incorrect information. If the creditor is purposely furnishing the credit agency false information, then you'll have to go after the creditor for damages.
Statute of Limitations
The window of opportunity for filing a lawsuit against a credit agency is short. You must file suit within 2 years of discovering the violation or within 5 years after the violation occurred.
If you're struggling to get your credit report fixed and the credit agency is violating your rights, connect with a personal injury lawyer from a firm like Breslin & Breslin/lawyers who can help you collect compensation for the damages caused by the company's conduct.