BANKRUPTCY AND CREDIT REPORT

5/7/2024

MICHIGAN CREDIT LAWYERS QUESTION DOES BANKRUPTCY AFFECT CREDIT REPORTS?

Bankruptcy can impact your credit report in ways you may not understand. When you file for bankruptcy, it is reflected on your credit report and can stay there for up to ten years. Some people believe bankruptcy credit reporting is a bad mark. However, what bankruptcy does is eliminate debt when debts are discharged in bankruptcy. This means that the accounts discharged in bankruptcy should be reported with a zero balance making you a potentially more attractive candidate for credit in the future since your outstanding debt is reduced by the bankruptcy discharge. While true that some lenders may view you as a higher risk borrower due to the bankruptcy on your record, other lenders will see you as less of a risk if you have income since you cannot file for bankruptcy again without waiting a certain number of years, and since there would not appear to be a line of creditors in a race to the courthouse to sue you for old, discharged debts.

REBUILDING YOUR CREDIT AFTER BANKRUPTCY

There are several things you can do to help re-establish and rebuild credit after bankruptcy, such as opening a secured credit account, paying new and future credit obligations on time, or being added as an authorized used to a credit account that is in good standing. While bankruptcy can have a negative impact on your credit report in the short term, you can rebuild your credit if you take the right steps.

THE LONG-TERM EFFECTS OF BANKRUPTCY ON YOUR CREDIT REPORT

As mentioned, bankruptcy can stay on your credit report for up to ten years. However, the impact of bankruptcy on your credit score can be minimized over time, especially if you take proactive steps to improve your credit. By demonstrating responsible financial behavior, you can show lenders that you are a reliable borrower.

CREDIT LAWYERS IN MICHIGAN CAN HELP REVIEW YOUR CREDIT REPORT AFTER BANKRUPTCY FOR CREDIT REPORT ERRORS

One of the first steps you can take after filing bankruptcy to rebuild your credit is to review your credit report to ensure that all discharged debts are reported accurately. If there are credit report errors on your credit report after filing bankruptcy, these can cause you to be denied credit. Lenders may assume that you either engaged in fraud that prevented you from obtaining a discharge of that debt, or that you became delinquent on a new or existing debt after your bankruptcy discharge.

TYPES OF CREDIT REPORT ERRORS AFTER BANKRUPTCY

There are several types of post-bankruptcy credit report errors to look out for such as:

Discharged debts not reporting as discharged in bankruptcy or with a $0 balance: Debts that are discharged in bankruptcy should be reported on your credit report as “Discharged in Bankruptcy” (or similar language), and with a balance of $0.
New collection accounts being reported for discharged debts: sometimes debts that are discharged in bankruptcy will be sold or assigned either before, during, or after the bankruptcy. This type of credit report error can occur when a collector reports the collection account as having been "opened" after the bankruptcy even though other reported account information reveals that the collection account pertains to a discharged debt.
Charge-offs Reported After the Bankruptcy Filing or Bankruptcy Discharge: Sometimes creditors will report a charge-off after your bankruptcy. Charge-offs typically occur when an account is 90-120 days or more delinquent and are more derogatory than an account that is merely delinquent, but not charged-off. This is another type of credit report error after bankruptcy.
Failure to Accurately Report Reaffirmed Accounts. When you reaffirm a debt during bankruptcy, you remain liable for the debt after the bankruptcy. Therefore, the reaffirmed debt should not be reported as discharged in bankruptcy and payments made after the bankruptcy should be reflected on your credit report.

SPEAK TO A MICHIGAN CREDIT LAWYER AFTER BANKRUPTCY

If you recently filed for bankruptcy or are planning to file for bankruptcy, you may wish to speak to a credit lawyer to help review your credit reports for errors after bankruptcy. We can help you dispute credit report errors after bankruptcy if needed, and also pursue available remedies if you have been harmed by credit report errors after bankruptcy. Our consumer attorneys have helped numerous consumers recover damages under the Fair Credit Reporting Act (FCRA) for inaccurate credit reporting and credit report errors after bankruptcy. We offer reasonable fees that are contingent on the outcome of a credit lawsuit, meaning you will not owe us any attorneys' fees if we do not recover damages on your behalf. Attorney Nick Hadous is an accomplished litigator and serves on the Litigation Advisory Board for the Institute of Continuing Legal Education (ICLE) where he is a content contributor and author in consumer protection litigation including the FCRA and disputing credit reports under the FCRA. You may contact us for a free phone or Zoom consultation by calling today or using the contact form below.

DOES THE FCRA PReEMPT STATE LAWS?

5/1/2024

CREDIT LAWYERS: FCRA LAWSUITS, STATE LAWS & PREEMPTION OF COMMON LAW CLAIMS

The FCRA preempts some state laws regarding credit reporting lawsuits. See, e.g., 15 U.S.C. 1681t(b).

However, under an interpretive rule by the CFPB, 87 FR 41042, state laws that are not “inconsistent” with the Fair Credit Reporting Act (FCRA) are generally not preempted by the FCRA. This might seem encouraging to plaintiffs at first glance, but whether a state law (e.g., state common law cause of action or state consumer protection causes of action) is consistent or inconsistent with the FCRA can cause considerable confusion/litigation when state law claims are asserted along with FCRA claims.

However, in the context of credit reporting, one area that seems somewhat settled is where a consumer sues a furnisher under the FCRA and then also tries to assert state law causes of action (e.g., breach of contract, defamation) based on underlying conduct involving the furnisher’s reporting obligations. The Sixth Circuit has held that the FCRA preempts state law claims regarding furnisher reporting obligations. Therefore, common law claims like breach of contract, defamation, etc. are typically dismissed.

The FCRA “preempts all state law[] . . . causes of action concerning a furnisher's reporting of consumer credit information to consumer reporting agencies.”

See Scott v. First Southern Nat. Bank, 936 F.3d 509, 521-22 (6th Cir. 2019) (dismissing the plaintiff's state claims for breach of the duty of good faith and fair dealing and tortious interference with contractual relationships). See also Petronykoriak v. Equifax Info. Servs., 19-cv-10784, 10 (E.D. Mich. Aug. 13, 2021) (same).

Litigants may therefore wish to focus their causes of action against furnishers under the FCRA (i.e., unreasonable investigation claims) where lawsuits concern inaccurate reporting of consumer information (e.g., credit reports, background check reports, or other reports containing consumer information as defined by the FCRA).

Note: furnishers like banks and credit card companies are distinct from the consumer reporting agencies (CRAs) like Equifax/Experian/TransUnion to whom furnishers report consumer information. CRAs have broader duties under the FCRA and more types of claims are available against CRAs under the FCRA. However, one might expect similar outcomes where claims concern a CRA's credit reporting procedures or its reinvestigation of disputes which are among the main types of claims in credit litigation.

Understanding Identity Theft Laws: MICHIGAN CREDIT LAWYERS

4/23/2024

UNDERSTANDING IDENTITY THEFT LAWS IN MICHIGAN FROM A CREDIT LAWYER'S PERSPECTIVE

Identity theft lawyers understand that identity theft laws often intersect between criminal laws intended to punish criminals, civil laws intended to compensate or make identity theft victims whole, and consumer protection laws intended to protect identity theft victims. Each type of law can offer various protections and benefits, but for practical purposes the consumer protection laws regarding identity theft can help consumers restore their credit and identity, and move on with their lives.

WHAT ARE IDENTITY THEFT LAWS?

Identity theft laws are intended to protect individuals from having their personal information misused by others for fraudulent purposes and unauthorized transactions. Identity theft laws aim to prevent unauthorized access to personal data such as social security numbers, credit card information, and other sensitive details, which can be used to open new, fraudulent accounts, or to access existing accounts without authorization.

Other identity theft laws can help consumers dispute credit report errors and file lawsuits under federal or state consumer protection laws with the help of a credit lawyer or identity theft lawyer. These types of lawsuits are intended to protect consumers from inaccurate credit reports, such as fraudulent accounts or fraudulent charges appearing on the identity theft victim's credit report.

TYPES OF IDENTITY THEFT LAWS

There are many types of identity theft laws, including criminal statutes that outline specific illegal activities related to identity theft. Civil lawsuits are also available to provide victims with legal recourse to recover damages caused by identity theft. Additionally, there are federal and state laws addressing different aspects of identity theft, such as credit reporting, data breaches and identity fraud.

Michigan Identity Theft Laws and Resources

There are various federal and state laws intended to protect identity theft victims in Michigan, including laws intended to deter identity theft in the first place, laws that limit the use of personal information to prevent identity theft or unauthorized transactions, and laws intended to protect identity theft victims from inaccurate credit reports, such as identity theft credit report errors, and from being denied credit because of identity theft.

Michigan Identity Theft Protection Act

The Michigan Identity Theft Protection Act lists various prohibited activities that are crimes under MCL 445.65. These include using or attempting to use the personal identifying information of another person, with either intent to defraud, or by concealing, withholding, or misrepresenting the person's identity, to obtain credit, goods, services, money, property, a vital record, a confidential telephone record, medical records or information, or employment. See MCL 445.65.

The Michigan Identity Theft Protection Act also prohibits using or attempting to use the personal identifying information of another person, with either intent to defraud, or by concealing, withholding, or misrepresenting the person's identity, to commit another unlawful act. See MCL 445.65.

The Michigan Identity Theft Protection Act also lists various defenses. See MCL 445.65.

In addition to the above, the Michigan Identity Theft Protection Act also lists various Additional Prohibited Activities regarding: the use of a business name without authority or approval, advertising, communications, and electronic activities, misusing, obtaining, possessing or selling personal identifying information, and falsifying an identity theft police report. See MCL 445.67.

Under the Additional Prohibited Activities, a person shall not:

Make any electronic mail or other communication under false pretenses purporting to be by or on behalf of a business, without the authority or approval of the business, and use that electronic mail or other communication to induce, request, or solicit any individual to provide personal identifying information with the intent to use that information to commit identity theft or another crime.
Create or operate a webpage that represents itself as belonging to or being associated with a business, without the authority or approval of that business, and induces, requests, or solicits any user of the internet to provide personal identifying information with the intent to use that information to commit identity theft or another crime.
Alter a setting on a user's computer or similar device or software program through which the user may access the internet and cause any user of the internet to view a communication that represents itself as belonging to or being associated with a business, which message has been created or is operated without the authority or approval of that business, and induces, requests, or solicits any user of the internet to provide personal identifying information with the intent to use that information to commit identity theft or another crime.
Obtain or possess, or attempt to obtain or possess, personal identifying information of another person with the intent to use that information to commit identity theft or another crime.
Sell or transfer, or attempt to sell or transfer, personal identifying information of another person if the person knows or has reason to know that the specific intended recipient will use, attempt to use, or further transfer the information to another person for the purpose of committing identity theft or another crime.
Falsify a police report of identity theft, or knowingly create, possess, or use a false police report of identity theft.

The Michigan Identity Theft Protection Act also prohibits certain conduct in trade or commerce. See MCL 445.71. In essence, these prohibitions pertain to the denial of credit or public utility services solely because the consumer was a victim of identity theft. Under the Act, a consumer is presumed to be a victim of identity theft for the purposes of this prohibition if he or she provides the following:

A copy of a police report evidencing the claim of the victim of identity theft.
Either a properly completed copy of a standardized affidavit of identity theft developed and made available by the federal trade commission under 15 USC 1681g or an affidavit of fact that is acceptable to the person for that purpose.

The Act also prohibits certain solicitations to extend credit to consumers who do not have existing lines of credit or credit cards or who have not applied for a line of credit or credit cards with the solicitor within the preceding year.

The Act also prohibits banks, credit card companies or other financial institutions from extending credit to a consumer without exercising reasonable procedures to verify the identity of that consumer.

Violations of the Michigan Identity Theft Protection Act can lead to criminal and civil penalties.

IDENTITY THEFT LAWS AND THE FAIR CREDIT REPORTING ACT

Under the Fair Credit Reporting Act, credit bureaus and furnishers of credit information have various responsibilities to ensure accurate credit reporting, which encompass identity theft, credit report disputes, and credit report errors caused by identity theft.

Identity Theft And Credit Bureau Liability

Credit bureaus are referred to as Consumer Reporting Agencies in the Fair Credit Reporting Act.

1. Reasonable Procedures: Credit Bureaus are required to follow reasonable procedures to assure maximum possible accuracy of consumer credit report information. Credit report disputes can lead to lawsuits when a credit bureau fails to follow reasonable procedures when reporting consumer credit information. The failure to follow reasonable procedures can lead to a consumer protection lawsuit arising under 15 U.S.C. Sec. 1681e(b).

2. Reasonable Reinvestigation of Consumer Disputes of Identity Theft: Credit bureaus are also required to Conduct A Reasonable Reinvestigation of Consumer Disputes under 15 U.S.C. Sec. 1681i. Credit report disputes can also lead to lawsuits when a credit bureau fails to conduct a reasonable reinvestigation of consumer credit report disputes of identity theft. During an FCRA lawsuit, your credit lawyer or identity theft lawyer can help discover whether the credit bureau conducted a reasonable reinvestigation of a consumer dispute. This will typically occur during the "discovery" phase of litigation where evidence of the furnisher's investigation can be obtained through written requests for information, documents, admissions, and depositions.

Identity Theft and Furnisher Liability

Banks, lenders, credit card companies, debt collectors and other entities that report account/tradeline information on credit reports are referred to as Furnishers under the Fair Credit Reporting Act.

Failure to Conduct A Reasonable Investigation of Consumer Dispute By Furnisher of Credit Report Information: Credit report disputes can also lead to lawsuits when a furnisher fails to conduct a reasonable investigation of consumer credit report disputes of identity theft. During an FCRA lawsuit, your credit lawyer or identity theft lawyer can help discover whether the furnisher conducted a reasonable investigation of a consumer dispute. This will typically occur during the "discovery" phase of litigation where evidence of the furnisher's investigation can be obtained through written requests for information, documents, admissions, and depositions.

Litigation Practice Note: Prior to suing a furnisher under the FCRA for an unreasonable investigation, the consumer must first submit a credit report dispute to the credit bureau, which then sends the consumer’s dispute to the furnisher.

IMPACT OF IDENTITY THEFT LAWS AND CONSUMER PROTECTION STATUTES: DO THESE REALLY PROTECT YOU?

In short, identity theft laws may not prevent you from becoming an identity theft victim, but identity theft laws along with consumer protection laws can protect you and help you restore your credit if you are the victim of identity theft.

Identity theft laws play a key role in combating identity theft and protecting individuals from financial and emotional harm if they become identity theft victims. Criminal identity theft laws provide some deterrence and restrict the use of personal information which can reduce the likelihood of identity theft or misuse of personal information. However, many cybercriminals are not be deterred by these laws, may be untraceable, or outside the jurisdiction of state or federal law enforcement.

Civil liability for identity theft can help consumers obtain recourse, but this is dependent upon identifying the criminal or perpetrator, which is not always possible.

Consumer protection laws can offer broad protection and remedies to identity theft victims. Consumer protection statutes like the Fair Credit Reporting Act create private rights of action for certain identity theft victims and have fee-shifting provisions to ensure that consumers have access to credit lawyers and identity theft lawyers, who otherwise would be too expensive for the consumer to retain on their own or who would not be interested in pursuing identity theft lawsuits or credit report dispute lawsuits.

CONSUMER PROTECTION LAWS PERMIT ACCESS TO IDENTITY THEFT LAWYERS AND CONSUMER LAWYERS

Congress understood that fee-shifting was necessary to encourage credit lawyers to take on consumer cases, and to enforce the Fair Credit Reporting Act through civil lawsuits/private actions on behalf of consumers. Thus, the Fair Credit Reporting Act is an incredibly powerful tool available to consumers and identity theft victims.

The Fair Credit Reporting Act has encouraged consumer attorneys to handle credit and identity theft lawsuits, which in turn permits consumers to secure experienced credit and identity theft lawyers. Additionally, the Fair Credit Reporting Act helps consumers and identity theft victims restore their credit to ensure that credit bureaus and furnishers of credit report information do not report inaccurate information about identity theft victims or attempt to hold the identity theft victim responsible for fraudulent accounts or fraudulent transactions.

Identify theft lawyers can help consumers report identity theft to the appropriate law enforcement agencies, dispute identity theft credit report errors, and help ensure that credit bureaus and furnishers, such as banks, financial institutions, and credit card companies, do not hold identity theft victims responsible by reporting fraudulent accounts or fraudulent charges on consumer credit reports.

SPEAK TO AN IDENTITY THEFT LAWYER AND CREDIT LAWYER NEAR YOU

Attorney Nick Hadous is an accomplished consumer lawyer licensed in Michigan, Arizona, and California. He has litigated cases arising under the Fair Credit Reporting Act in federal district courts and federal courts of appeals. Mr. Hadous has helped consumers dispute their credit reports in accordance with the Fair Credit Reporting Act, including identity theft credit report errors, and other common credit reporting errors, and has helped consumers sue and recover damages against credit bureaus and furnishers of consumer information that violate the Fair Credit Reporting Act. Mr. Hadous currently serves on the Litigation Advisory Board for the Institute of Continuing Legal Education (ICLE) where he is a content contributor and author in consumer protection litigation, including the Fair Credit Reporting Act.

If you are struggling with identity theft credit report errors or other credit report errors, please contact us for a free phone or Zoom consultation by calling today or using the contact form below.

Identity Theft Litigation: A Comprehensive Legal Guide

4/22/2024

UNDERSTANDING IDENTITY THEFT AND IDENTITY THEFT LAWS

Identity theft can be a perplexing crime and leave victims feeling violated, shocked, and vulnerable. Often times, identity theft victims struggle to figure out how their personal information was compromised. When your personal information is stolen or misused, it can lead to financial loss, credit report errors, credit harm, damage to their reputation, and emotional distress. In today's digital age, where our identities are stored and shared online, the risk of identity theft is higher than ever and there are budding markets for stolen personal information. An identity theft lawyer can help you take the steps necessary to reclaim your financial well-being.

RECOGNIZING THE SIGNS OF IDENTITY THEFT

Detecting identity theft can be challenging. Recognizing the signs of identity theft are not always obvious and can be delayed until harm is done. Some common signs of identity theft include unauthorized transactions on your bank account, unauthorized or fraudulent charges on your credit card, receiving bills for services you didn't use, or being contacted by debt collectors for debts that aren't yours or that you do not recognize. If you notice any of these identity theft red flags, it's essential to act quickly to protect yourself from further harm. Speaking to an identity theft lawyer near you can help you learn about the process of reporting identity theft, obtaining the documents needed to substantiate that you are a victim of identity theft, disputing identity theft credit report errors, and protecting yourself from identity theft.

TAKING LEGAL ACTION FOR IDENTITY THEFT CREDIT REPORT ERROR

Identity theft litigation typically involves holding the perpetrators accountable for their actions and seeking compensation for the damages you have suffered. This also typically includes the credit report agencies or furnishers (such as a bank or credit company) who fail to take the steps needed to restore your credit after identity theft. If the credit agencies or furnishers fail to correct the inaccuracies or errors in your credit report, you may be able to file a lawsuit under the Fair Credit Reporting Act and recover damages. An experienced identity theft attorney or credit attorney can guide you through the legal steps to dispute identity theft credit report errors, help you gather evidence, and represent your interests in court.

THE IMPORTANCE OF IDENTITY THEFT LAWYERS AND CREDIT LAWYER

Identity theft lawyers can help you through the process of reporting and disputing identity theft. If you have a claim for damages, your identity theft lawyer can help you gather and present evidence in court. Navigating the complexities of identity theft litigation on your own can be difficult, feel overwhelming and stressful. Having a knowledgeable credit attorney by your side can help you regain control and enforce your consumer rights. Identity theft attorneys will advocate for your rights under consumer protections laws, and work towards a favorable resolution.

PROTECTING YOURSELF FROM IDENTITY THEFT IN THE FUTURE

Preventing identity theft is an ongoing process that requires vigilance and proactive measures such as reviewing your credit report for identity theft red flags. Additionally, taking steps to safeguard your personal information is also essential. This includes using strong passwords, multi-factor authentication, avoiding suspicious links or phishing scams, verifying sources requesting your personal information, and keeping your phone, computer, and software current. Regularly monitoring your financial accounts and credit reports can help you detect any suspicious activity early on and take swift action to address it.

SPEAK TO AN IDENTITY THEFT LAWYER NEAR YOU

Attorney Nick Hadous is an accomplished consumer lawyer licensed in Michigan, Arizona, and California with a record of success in FCRA litigation in federal trial and appellate courts. Mr. Hadous has litigated consumer law issues under the Fair Credit Reporting Act and other consumer protection statutes extensively. He has helped consumers dispute identity theft credit report errors, other common credit reporting errors, and has helped consumers sue and recover damages against the credit bureaus and furnishers of consumer information under the Fair Credit Reporting Act. Mr. Hadous currently serves on the Litigation Advisory Board for the Institute of Continuing Legal Education (ICLE) where he is a content contributor and author in consumer protection litigation.

If you are struggling with identity theft credit report errors or other credit report errors, please contact us for a free phone or Zoom consultation by calling today or using the contact form below.

HOW TO OBTAIN YOUR BACKGROUND CHECK REPORT BEFORE BACKGROUND CHECK ERRORS COST YOU A JOB OR HOUSING

4/18/2024

BACKGROUND CHECK ATTORNEYS SUGGEST REVIEWING YOUR BACKGROUND CHECK REPORT FOR ERRORS

Background check errors can be costly and seemingly come out of nowhere when you apply for a job or housing. Although background check errors and credit report errors can occur at any time, periodically reviewing your background check report and credit report for errors can help prevent background check errors or credit report errors from costing you a job or housing.

UNDERSTANDING THE IMPORTANCE OF A BACKGROUND CHECK AND BACKGROUND CHECK ERRORS CAN AFFECT YOU

Background check attorneys recommend reviewing your background check for errors when applying for a new job or your employer has requested your permission to perform a background check.

Before obtaining your background check report for employment to review for background check errors, you should understand the significance of background checks. Employers conduct background checks as part of the hiring process to ensure that they are making informed hiring decisions and to evaluate your suitability for the job which you are applying.

Background Check Lawyers Can Help You Dispute Background Check Errors

If you discovery any background check errors either before you apply for a job or during the application process, a background check lawyer can help you take immediate action such as disputing the background check errors with the screening company (known as a consumer reporting agency under the Fair Credit Reporting Act).

WHERE TO OBTAIN YOUR BACKGROUND CHECK REPORT

One of the firsts steps you can take to obtain your background check report is to know and understand the type of background check being conducted by your potential employer. Depending on the position you are applying for, the background check may include criminal history background check, credit history check, prior employment verification, and verification of your education. It is important to verify whether your background check may contain errors, especially criminal background check errors that can cause denial of employment or loss of employment.

HOW TO REQUEST YOUR BACKGROUND CHECK REPORT

Once you are aware of the type of background check being conducted, you should request a copy of your background check report. There are many consumer reporting agencies that assemble and sell background check reports to prospective employers such as Checkr, Inc., GoodHire, HireRight, Intelius, and others. You should review whether there are any background check errors. You can also request a copy of your background check from the employer or the third-party screening company that the employer hired to conduct the background check or paid for the background check report.
If you find background check errors, are denied employment or lose your current employment because of background check errors, you should consider consulting a background check attorney.

BACKGROUND CHECK ERRORS AND YOUR CONSUMER RIGHTS

Background check attorneys can help you understand your consumer rights if you were harmed by background check errors. The Fair Credit Reporting Act (FCRA) provides consumers with rights and remedies, and you may be able to recover damages for background check errors. A background check lawyer will typically review the background check report errors with you and help you obtain evidence to dispute the background check errors and any other inaccuracies contained in the background check report.

WHAT TO DO ABOUT DIFFICULTIES OBTAINING YOUR BACKGROUND CHECK REPORT

In some cases, you may encounter difficulties obtaining your background check report, particularly if the information is being withheld by the employer or the background screening company. In such cases, you should speak to a background check attorney about to ensure that your consumer rights are being upheld.

SPEAK TO A BACKGROUND CHECK LAWYER TODAY IF YOU WERE DENIED A JOB OR HOUSING BECAUSE OF BACKGROUND CHECK ERRORS

If you were denied employment because of background check errors, you are not alone and should speak with a background check attorney about your consumer rights under the Fair Credit Reporting Act. Our background check attorneys in Michigan understand how background check errors can occur, and can help you take the steps needed to dispute background check errors, remove the background check errors, and in some cases seek damages for harm caused by errors contained in your background check report.

Attorney Nick Hadous is an accomplished consumer protection attorney licensed in Michigan, Arizona, and California with a track record of success in FCRA cases in trial and appellate courts, including federal courts in Michigan, Arizona, and the Ninth Circuit Court of Appeals. We have helped consumers correct credit report errors and pursue damages for costly errors. In addition, Mr. Hadous currently serves on the Litigation Advisory Board for the Institute of Continuing Legal Education (ICLE) where he is a content contributor and author in consumer protection lawsuits.

If you are a victim of background check errors, you can reach out to us today for a free Zoom or phone consultation by calling today or using the contact form below.

CREDIT ATTORNEYS: LAWSUITS AFTER DISPUTING CREDIT REPORT ERRORS

4/16/2024

CREDIT ATTORNEY LAWSUIT BASICS

Credit lawyers play a pivotal role in safeguarding consumer rights by filing lawsuits under the Fair Credit Reporting Act for credit report errors. Lawsuits based on inaccurate credit reporting, identity theft credit report errors, and background check errors can occur before or after disputing your credit report. Credit attorneys can help empower consumers to enforce the protections afforded by the Fair Credit Reporting Act and other consumer protection statutes.

THE LEGAL BASIS FOR LAWSUITS FILED BY CREDIT ATTORNEYS

Credit attorneys typically focus on consumer protection laws like the Fair Credit Reporting Act (FCRA). The FCRA is a consumer protection statute that outline the rights and responsibilities of both consumers, consumer reporting agencies such as credit bureaus and background check reporting companies, and furnishers of tradeline information on your credit report such as banks, lenders, creditors, credit card companies, and debt collectors. When credit laws laws are violated, credit attorneys can step in to hold wrongdoers accountable in court and to seek just compensation for consumers.

Benefits of A Credit Attorney in LAWSUITS

Navigating credit disputes and the legal framework for protecting your rights under the FCRA can be daunting for the average consumer. By hiring a skilled credit attorney, consumers can benefit from the attorneys’ knowledge and experience disputing credit report errors and litigating common credit report errors and legal issues in court.

Credit Attorney: Overview of Credit Lawsuits

There are many different types of legal claims and theories that encompass credit reporting disputes and credit lawsuits and these can exists in various contexts, such as credit reporting errors, identity theft credit report errors, and background check errors. We will discuss some of the broad types of claims applicable to credit disputes and consumer reporting issues.

Credit Lawsuits: Consumer Reporting Agency Failure to Follow Reasonable Procedures to Assure Maximum Possible Accuracy Of Consumer Credit Report Information

Credit disputes can lead to lawsuits when a credit bureau fails to follow reasonable procedures to assure maximum possible accuracy of the reported consumer information contained in credit reports. This type of claim is appropriate when the consumer reporting agency follows unreasonable procedures or reports information from unreliable sources despite notice of the unreliability of the information. This can lead to widespread credit report errors affecting many consumers. Your credit attorney can conduct discovery of the consumer reporting agency’s procedures during a lawsuit.

Credit Lawsuits: Consumer Reporting Agency Failure to Conduct A Reasonable Reinvestigation of Consumer Dispute

Credit disputes can also lead to lawsuits when a credit bureau fails to conduct a reasonable reinvestigation of consumer disputes. Credit bureaus will typically forward consumer disputes to furnishers to verify the accuracy of the reported information. However, the credit bureau is still required to conduct its own investigation especially where the consumer provides sufficient information demonstrating the inaccuracy, the credit bureau knows of the inaccuracy or can otherwise independently verify the consumer dispute, such as in post-bankruptcy credit reporting. Your credit reporting lawyer can conduct discovery of the reinvestigation that was done by the credit bureau, if any, during a lawsuit. This type of claim is appropriate when the consumer reporting agency fails to conduct a reasonable reinvestigation when the consumer disputes credit report information.

Failure to Conduct A Reasonable Investigation of Consumer Dispute By Furnisher of Credit Report Information

Credit disputes can also lead to lawsuits when a furnisher fails to conduct a reasonable investigation of consumer disputes. A furnisher is an entity that reports consumer information to the credit bureaus. Examples of furnishers include credit card companies, banks, mortgage lenders, collection agencies, and other creditors. The FCRA requires consumers to dispute directly with the credit bureaus, which forwards the dispute to the furnisher. Thus, to be able to sue a furnisher under the FCRA it is necessary to dispute credit report errors through the credit bureau first. A dispute directly to the furnisher instead of the credit bureau does not suffice. Furnishers are required to conduct a reasonable investigation of consumer disputes and either verify the credit reporting, correct the inaccuracy in the credit report, or delete the inaccuracy in the credit report. Your credit lawyer can conduct discovery of the investigation, if any, that was done by the furnisher during a lawsuit. This type of credit reporting claim is appropriate when the furnisher fails to conduct a reasonable investigation of a consumer dispute of credit report information.

CAN YOU RECOVER DAMAGES FOR CREDIT REPORT ERRORS

Yes. Damages can be recoverable in credit report lawsuits, including after disputing credit report errors that do not result in the correction of inaccuracies and errors in your credit report. Credit attorneys play a crucial role in helping gather and present evidence of harm in credit lawsuits to help consumers recover damages for harmful credit reporting errors.

There are several categories of damages that may be available in credit lawsuits under the Fair Credit Reporting Act.

Actual Damages For Credit Report Errors

Actual damages include losses you incurred that were directly caused by an FCRA violation. Actual damages can include financial loss as well as emotional distress, humiliation, medical injury and other physical or non-physical harm so long as the injury is real and sufficiently serious.

Actual damages can be awarded for negligent or willful violations of the FCRA. Your credit attorney can help you gather evidence of actual damages and losses to help pursue damages for credit report errors.

Statutory Damages For Credit Report Errors

Statutory damages may also be available for credit report errors if the consumer reporting agency or credit bureau commits a “willful” violation of the FCRA. Statutory damages range from $100 to $1,000 per violation. Statutory damages are not the same as actual damages and may be awarded even in the absence of actual damages. However, as noted, the threshold requires a showing of a willful violation, which is higher than the standard for recovering actual damages, which only requires a negligent violation of the FCRA.

Attorneys’ Fees For Credit Report Errors

Attorneys’ fees may also be recovered in FCRA actions. The FCRA contains a fee-shifting provision which allows consumers to recover their reasonable attorneys’ fees. Fee-shifting statutes are important because these permit greater access to consumer attorneys who can handle your case on a contingent fee basis because of the recoverability of attorneys’ fees. If attorneys’ fees were unavailable, consumers would have a much harder time hiring consumer attorneys unless the consumer was willing to pay the lawyer out of their own pocket. Congress understood this and therefore included fee-shifting provisions in the FCRA to encourage consumer attorneys to represent consumers in FCRA lawsuits.

Punitive Damages For Credit Report Errors

In some cases, punitive damages may be awarded. Punitive damages may be awarded in FCRA cases when a furnisher or consumer reporting agency willfully violates the FCRA. Willful violations occur when there is intentional or reckless conduct, which demonstrates a disregard for the rights of consumers. Credit attorneys can develop this type of evidence during the discovery phase of FCRA lawsuits.

The amount of punitive damages can vary, and depends on the evidence and harm. There is no limit to the amount of punitive damages that may be awarded in FCRA actions. Your credit attorney

SPEAK TO A CREDIT LAWYER IF YOU HAVE CREDIT REPORT ERRORS, IDENTITY THEFT CREDIT REPORT ERRORS, OR BACKGROUND CHECK ERRORS

Don't let costly credit report errors, identity theft, or background check errors go unchecked. We fight for consumers and help consumers seek damages for violations of consumer rights. We take on the credit bureaus, background check reporting companies, lenders, credit card companies, as well as any abusive debt collectors or collection agencies that harass consumers.

Attorney Nick Hadous is a seasoned consumer attorney licensed in Michigan, Arizona, and California with a track record of success in various types of FCRA cases. He has litigated consumer law issues in trial courts and has been successful in numerous hotly contested appeals of FCRA cases in the Ninth Circuit. We have helped consumers dispute identity theft credit report errors, and correct credit report errors through removal of inaccurate information caused by identity theft and other common credit reporting errors.

Mr. Hadous currently serves on the Litigation Advisory Board for the Institute of Continuing Legal Education (ICLE) where he is a content contributor and author in consumer protection lawsuits.

If you believe you are a victim of identity theft or if your credit report contains inaccurate information, please contact our office using our contact form to schedule a free phone or Zoom consultation.

IDENTITY THEFT LAWYERS BLOG