Common Fair Credit Reporting Act Violations

22 Nov Common Fair Credit Reporting Act Violations

The Fair Credit Reporting Act (FCRA) is ultimately designed to protect consumers. The law does this by giving consumers certain rights and governing the ways credit bureaus gather and share consumers’ information. Some consumer rights set forth by the FCRA include the right to know what is in your credit file and know your credit score, the right to dispute inaccurate information, the right to control access to your file, and more.

The FCRA is enforced by the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB.) When a credit bureau or business is found to have committed Fair Credit Reporting Act violations, the violator is subject to paying fines and damages.

Common FCRA violations include:

1. Neglecting to report debt discharged in bankruptcy proceedings: When a debt has been properly discharged in a bankruptcy proceeding, the creditor’s records and the consumer’s credit bureau records must be updated to reflect the discharge. All too often, discharged debt is inaccurately categorized as “charged off” or “closed by credit grantor.” This inaccurate categorization is an FCRA violation.

2. Misrepresenting an account’s status as active, post voluntary closure: Similarly, when a consumer voluntarily closes a credit account, creditors and the credit bureaus must update the consumer’s credit report to show the voluntary closure. Unfortunately, credit bureaus often fail to make this change, resulting in accounts appearing as active and delinquent. This FCRA violation can have a significant negative impact on a consumer’s credit score.

3. Incorrectly designating a consumer as a debtor instead of an authorized user: If you are an authorized user on someone else’s credit card account but are not a co-debtor, it is an FCRA violation for credit bureaus to report the debt as yours on your credit report. This inaccurate reporting can harm your credit reputation if the person responsible for the debt fails to honor their obligations to the creditor.

4. Failing to classify a disputed debt as such: You have the right under the FCRA to dispute inaccuracies on your credit report. When you report a dispute, the credit agency you contacted is required to notify the other credit bureaus of the dispute. All credit bureaus must then note on your file that the debt is disputed. A failure to identify the debt as a disputed debt is an FCRA violation.

5. Unauthorized credit inquiries by credit reporting agencies: The FCRA gives consumers control over who can access their records. When someone (employer, landlord, prospective creditor, etc.) accesses your credit report without your express permission, your credit score can suffer. Such unauthorized access is a violation of the FCRA, and the person or company who pulled your credit may be liable for damages.

6. Credit reporting agencies deviating from proper complaint-handling procedures: The credit bureaus are required to follow certain procedures when investigating and resolving complaints brought by consumers. When the bureau doesn’t follow these procedures or fails to take corrective action to remedy an error, they have violated the FCRA’s rules. A consumer harmed by this inaction has rights.

7. Confusing financial data of consumers with similar names/numbers: One of the most frustrating and common FCRA violations occurs when the credit bureau mixes information in your credit record with information in the record of someone else with the same or a similar name or a similar social security number. Careless mistakes in entering information can result in significant damage to your credit reputation.

8. Including outdated information on a consumer’s credit report: The FCRA requires credit bureaus to keep consumers’ records updated as situations change. If your credit report still shows information from more than seven years ago, shows old debts as current, includes inaccurate balances due, or otherwise shows outdated information, the bureau may be violating the FCRA.

Concerned About FCRA Violations? Let Stein Saks, PLLC Help!

Unfortunately, these common FCRA violations negatively impact consumers every day. FCRA violations can lead to being denied employment, difficulty obtaining credit, being turned away when trying to rent apartments, and more. These outcomes can be frustrating and time-consuming for victims. What’s more, FCRA violations can lead to personal and professional embarrassment.Stein Saks, PLLC is committed to fighting for consumers’ rights, stopping abusive practices, and helping victims obtain the compensation they deserve when their rights have been violated. Our services include representing victims of Fair Credit Reporting Act Violations. If you feel your FCRA rights have been violated, contact us today to schedule an initial consultation with an experienced consumer advocacy lawyer.