Consumer lawsuits against Credit Reporting Agencies (CRAs) under the FCRA most commonly occur under two different statutory provisions. A consumer will allege that a CRA published inaccurate information on a credit report in violation of 15 U.S.C. 1681e(b), or allege that a CRA failed to conduct a reasonable investigation after receiving a consumer credit dispute notice in violation 15 U.S.C. 1681i(a). Other FCRA violations against credit reporting agencies can and do happen, but the bulk of the credit report lawsuits occur under either one and often times both of these statutory provisions.
1681e(b) claims center upon allegations that the credit reporting agency has published inaccurate credit reports without following reasonable procedures to assure the accuracy of the information reported. For some credit report inaccuracies, the CRA has published inaccurate judgment, bankruptcy, tax lien, or other derogatory public record information. In some instances, information from another consumer will appear on your credit report. This scenario is referred to as a mixed credit file or merged credit file. Mixed credit files can cause lots of problems for a consumer like a failed home loan purchase, denial of a home refinance, or even a job loss in some instances. CRAs have a duty to assure the accuracy of the information reported and by reporting another person’s derogatory information on your credit report, the credit reporting agency may be in violation of the law. You should consult a lawyer that accepts FCRA cases if you believe that you have a mixed or merged credit file.
1681i(a) of the FCRA is another major source of lawsuits between consumers and Equifax, Experian, and Trans Union. Under this FCRA provision, a credit reporting agency must conduct a reasonable investigation of disputed credit accounts and must notify the furnisher of the consumer’s dispute so that the furnisher may conduct their own independent investigation. CRAs typically rely on an automated process that simply notifies the furnisher of the type of dispute by category. After receiving the response from the furnisher, some lawsuits have shown that credit reporting agencies simply repeat the furnisher response without conducting their own independent investigation. This is referred to as “parroting” and there have been instances in which punitive damages have been awarded against credit reporting agencies for parroting information and disregarding statutory duties to conduct independent credit report investigations.
For information on how you can dispute inaccurate information in your credit report or what happens to your credit dispute after you mail a dispute letter, please see my previous posts. If you would like to contact me about your particular sitiauation in Virginia or for a referral to a lawyer in your area, please contact me at (703) 390-9205.