CREDIT ATTORNEYS: LAWSUITS AFTER DISPUTING CREDIT REPORT ERRORS

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.
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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.  
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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. 
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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.  
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