The Fair Credit Report Act (FCRA) is an act that protects consumers against the misuse and misreporting of credit information. It was put in place by Congress in 1970 and it governs the conduct of credit reporting agencies and the businesses and individuals that provide information to credit reporting agencies.
Violations of the FCRA can lead to lower credit scores, denial of credit, = higher interest rates on loans, and negative employment actions.
This article will look at some common violations of the FCRA so you can consider whether the CRAs and your creditors are respecting your consumer rights.
Common Violations of the FCRA
Here are a few common violations of the FCRA:
Furnishing and Reporting Old Information
It is up to CRAs and the companies and individuals that report to them to keep information on credit reports current. However, there are many instances when updated information slips through the cracks. Here are some common examples:
- Failing to accurately report a debt that was discharged in bankruptcy
- Reporting old debts as new or re-aging accounts
- Reporting a debt as active that has been voluntarily closed by a consumer
Furnishing and Reporting Inaccurate Information
Sometimes the information CRAs use on credit reports is inaccurate. Here are some common examples of these types of violations:
- Inaccurately reporting a debt that has been paid or settled
- Getting the amount of the balance due incorrect
- Reporting timely payments as late
- Listing someone as a debtor on an account when they were an authorized user
- Supplying information on an account where identity theft was previously reported
- Not adhering to the proper procedure when reporting identity theft
In some cases, CRA’s may mix your files with someone else’s resulting in inaccurate information on your credit report. Here are some situations in which this is likely to happen.
- If two people have similar social security numbers
- If people have the same surname but one is Jr. and one is Sr.
- If people have the same last name and similar first names
- If people have similar names and live in the same city under the same zip code
Failing to Follow Dept Dispute Procedures
When you submit a dispute, it is up to CRAs and creditors to take the proper measures. This includes conducting an investigation into your dispute, correcting inaccurate information and sometimes removing the disputed debt from your credit report. However, these organizations don’t always follow the required procedures.
Here are some ways CRAs can fall short on their duties:
- Failing to notify the creditor that the debt has been disputed
- Failing to conduct a reasonable investigation into the disputed item
- Failing to correct or delete an inaccurate, incomplete or unverifiable information within 30 days of a consumer filing the dispute
Here are some way’s creditors fall short on their duties:
- Failing to notify all CRAs involved that the consumer is disputing the debt
- Failing to submit corrected information to the CRA after the investigation has been conducted
- Continuing to send CRAs information they know to be incorrect
- Failing to conduct an investigation into the disputed item within 30 days of filing (45 days if additional information is submitted during the investigation)
- Failing to provide information about the procedure to follow if a dispute needs to be filed
- Failing to provide you with the results of the investigation within 5 days of the investigation being completed
In dealing with credit matters, the consumer’s privacy must be protected and sensitive information should only be given to parties who have a ‘permissible purpose’. These include the following:
- Insurance providers
- Utility companies
- Employers (with the consumer’s consent only)
Requesting a Credit Report for an Impermissible Purpose
Whoever pulls your credit report must have a permissible purpose to do so. Here are some examples of instances when a credit report might be pulled for an impermissible purpose:
- When someone pulls your credit report to determine if you are collectible before having the legal right to collect a debt
- When an employer pulls your credit report without your permission
- When a creditor on a debt you filed bankruptcy for pulls your credit report to check on your current financial activity
Every consumer is entitled to receive notices concerning the reporting, handling and use of their credit information. If a CRA or creditor fails to provide notice, this may be a violation of the FCRA. Here are some common examples of these violations.
- A creditor fails to notify you when it supplies negative credit information to a CRA
- Someone who requested your credit information fails to notify you of a negative decision made based on your credit score
- A creditor fails to notify you of your right to dispute inaccurate credit information
- A creditor refuses to identify the source from which they obtained your credit information
If you feel a CRA or creditor has violated the FCRA regarding your credit, Samuel Ford of Alexander Shunnarah Personal Injury Attorneys can help. With years of experience in the field of consumer protection, SVHC will help you seek justice.
Samuel Ford of SVHC offers free consultations and, if you have a claim, you may be able to recover all associated costs and attorney’s fees, meaning SVHC may be able to represent you at no cost to you! Contact Samuel Ford today!