People often ask how to deal with a debt collector.  Here are some simple rules that will help control the situation.

1.  Pay your bills if you can. The easiest way to deal with a debt collector is to not need to- that is, pay your bills on time every month. By the way, this also means that your credit score will be as high as it can be in your situation.  (there is more  to a credit score than payment history, but history is the biggest part).

2. Talk to the lender before you miss payments.  If you fall behind on your bills, it is often easier to deal directly with the creditor to help you fix the situation than if the account is turned over for collections, so as soon as you realize you are going to have a problem, contact the lender. Sometimes they will work with you, sometimes they will not.

3. Prioritize your debts. If you have tried dealing with the lender, the next thing to do is prioritize who gets paid first, and who gets paid last.  I will talk about why this is the order next week.

a. Food comes first. If you don’t have enough money for food, then no one gets anything.  Don’t be ashamed to apply for food stamps (called SNAP) and other government assistance.

b. Your car and home payments come second. This does not include second homes, second cars, etc, but does include the payment on your first and second mortgage on your home.  These assets are important, because you need a roof over your head, and a way to get to work.

c. Utilities (lights, water, gas) come third. It is much easier to maintain your ability to have a roof, and a car if there is heat and air conditioning, water, etc.

d. Current bills.  Medical bills, credit cards, store cards, etc.

e. Luxury expenses.  Vacations, jewelry, etc.  If you are paying for these things, you should be paying all of your bills. If you are not paying all of your bills, you should not spend money on luxury expenses.

4. Reduce your expenses. This is much more important for a long term problem than a short term issue.  If you are out of work, but going back, conserve your cash, and keep going. If you are at a new, lower paying job, reducing your expenses is much more important.  Downsize your house, downgrade the car.  You need to look for a less expensive solution.

5. Communicate with the debt collectors.  That first call or letter will not be the last if you don’t respond.  Request verification of the debt. Start with making sure they are collecting an account that you owe.  Dealing with a mistaken identity or ID theft is different from dealing with your own accounts. Verify the amounts they are requesting.

6. Consult a lawyer and maybe a financial planner.  You need to know your rights, and how to get out of this mess.  Above all, don’t play ostrich. Sticking your head in the sand and saying I can’t see you will not make the problem go away.

If you have been impacted by anything we mentioned here, please make an appointment to see us.

NO FEE IN YOUR FDCPA CASE UNLESS WE RECOVER!!

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or
party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.303.0204
You can fax us: 804.303.0209
You can contact us by US MAIL:
Krumbein Consumer Legal Services, Inc.
5310 Markel Rd.
Suite 102
Richmond, VA 23230

There are 3 ways to order your consumer disclosure.  Phone, mail and internet.

To order by phone, you can call the central source for these files, at 877-322-8228 (877-FACT-ACT).  This is a phone call, and the process takes about 10 minutes.  This call is to the central source for Equifax, TransUnion and Experian.  You will need your name, address, prior address if you have lived there less than 2 years, and your social security number.

To order by mail, you download the form, print it and mail it.  The address is Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.

We recommend against ordering on the internet, because there are legal issues (which have to do with technicalities in the law) with doing so.  If you wish to do so, point your browser to the Annual Credit Report Request Services, and follow the on-screen directions.  You should print the file you get. There are free applications available to print your credit file to PDF, so you don’t even have to have paper.  We like CutePDF.com, but there are others that work just fine.

You should NOT use FreeCreditReport.com or FreeCreditScore.com.

FreeCreditReport.com and FreeCreditScore.com are sales services for Experian’s ConsumerInfo.com, which sells credit monitoring.  Credit monitoring costs $14.95 per month, or $179.40 annually.

Your score is not important to you. Your score is a reflection of your credit file.  If your credit file is accurate, then your score will be correct, and anyone who tells you that they can remove accurate information is lying.  (There will be another blog post about credit repair organizations).  If your credit file is inaccurate, then your score is irrelevant, because it is false information that is being graded.

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.303.0204

You can fax us: 804.303.0209

You can contact us by US MAIL:

Krumbein Consumer Legal Services, Inc.

5310 Markel Rd.

Suite 102

Richmond, VA 23230

Tax Return ID Theft is on the rise.  Yahoo News has a story about how it is getting bigger.

Tax Return ID Theft is when someone else uses your social security number and other personal identifiers to work or obtain other government benefits.  Usually this is done by an illegal alien, who needs your personal information to give to an employer so they can work.

To combat this growing scourge, it is important for you to safeguard your information and documents. Just as the advertisements suggest, you should destroy documents with your full social security number rather than just throw them away.  You are even better protected by not disposing of them at all.

If you are the victim of tax return fraud, you should contact the IRS, and send in a Tax Form 14039, a tax ID theft Affidavit.  This will help some in your efforts to control the damage.

But you should also be checking your credit file. Identity thieves rarely limit themselves to just your work records.  You should be ordering your consumer disclosures from the 3 national credit reporting agencies. You can do this by mail, or phone.  Download the form for requesting your credit report by mail, or call the central number for ordering by phone-  877-322-8228.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.303.0204

You can fax us: 804.303.0209

You can contact us by US MAIL:

Krumbein Consumer Legal Services, Inc.

5310 Markel Rd.

Suite 102

Richmond, VA 23230

CONSUMER REPORTING AGENCY REINVESTIGATIONS and The Fair Credit Reporting Act

All references to code sections are courtesy of the Legal Information Institute at Law.Cornell.edu.

The Fair Credit Reporting Act requires the Credit Reporting Agencies, or Consumer Reporting Agencies to conduct a reinvestigation and the procedures around that reinvestigation.

The section that discusses the requirements for reinvestigation of a disputed item is 15 U.S.C. §1681i.

As usual, we start with the statute.  Please note that we will only be reviewing the section on reinvestigations, so the rest of the section will not be reprinted or discussed.

This section requires the consumer credit reporting agencies to have procedures if they are unable to verify information, or if they discover that information is inaccurate.

It requires that the information that they cannot verify be deleted or changed, and that information that is inaccurate be changed or deleted.

An example of unverifiable information is where the furnisher of the information provides information that a person has failed to make certain payments (ie: been late) on a debt, but is unable to provide the records that show that the person has not made those payments.

In this case, the consumer credit reporting agencies must remove the information that the person has failed to make those payments.  They have to report that the person is current.

Another example of inaccurate information is an account created by identity theft.  Clearly, it is not accurate to report that a person owes money to a certain creditor when that account was opened by someone else.  In this case, they must delete the inaccuracy, and remove all reference to this account.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

CONSUMER REPORTING AGENCY REINVESTIGATIONS and The Fair Credit Reporting Act

All references to code sections are courtesy of the Legal Information Institute at Law.Cornell.edu.

The Fair Credit Reporting Act requires the Credit Reporting Agencies, or Consumer Reporting Agencies to conduct a reinvestigation and the procedures around that reinvestigation.

The section that discusses the requirements for reinvestigation of a disputed item is 15 U.S.C. §1681i.

As usual, we start with the statute.  Please note that we will only be reviewing the section on reinvestigations, so the rest of the section will not be reprinted or discussed.

(5) Treatment of inaccurate or unverifiable information

(A) In general

If, after any reinvestigation under paragraph (1) of any information disputed by a consumer, an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall—

(i) promptly delete that item of information from the file of the consumer, or modify that item of information, as appropriate, based on the results of the reinvestigation; and

(ii) promptly notify the furnisher of that information that the information has been modified or deleted from the file of the consumer.

This means that, under the Fair Credit Reporting Act, the consumer credit reporting agency must, after reviewing the credit file and information that you provided in conjunction with your request for reinvestigation, must remove the disputed information, if the information cannot be confirmed.

For example- If you have a credit card or perhaps a line of credit with a bank, and the bank reports that you are late one month.  You have proof that you sent payment, and that they cashed your check on or before the due date.

In order to preserve your rights, you must send your dispute to the consumer credit reporting agencies, and provide them with all the information they need to review this account.  If the consumer credit reporting agency cannot verify that the information is accurate, they are required to either delete the information or alternatively, to modify the reporting of the tradeline in the credit file to show that you were not late, and notify the furnisher of the information (your creditor) that they have removed or modified the information in your credit file.  Under a different provision, they are required to have specific procedures to prevent the inaccurate information from reappearing in your credit file.

If the information is accurate, it is proper for the information to remain, so it is important to remember that just because you dispute, and they deal with your dispute incorrectly, does not mean that you have a right to sue.  The Fair Credit Reporting Act is NOT like the Fair Debt Collection Practices Act.  They must report inaccurate, or accurate but misleading and incomplete, information in order to have a right to sue at all.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

KCLS LIMITS THE GEOGRAPHY IN WHICH WE TAKE CASES.

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

YOUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.673.4358

You can fax us: 804.673.4350

You can contact us by US MAIL:

Krumbein Consumer Legal Services, Inc.

1650 Willow Lawn Drive

Suite 300

Richmond, VA 23230

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

The Fair Credit Reporting Act is designed to protect consumers from inaccurate or outdated information on credit reports.

CONSUMER REPORTING AGENCY REINVESTIGATIONS and The Fair Credit Reporting Act

All references to code sections are courtesy of the Legal Information Institute at Law.Cornell.edu.

The Fair Credit Reporting Act requires the Credit Reporting Agencies, or Consumer Reporting Agencies to conduct a reinvestigation and the procedures around that reinvestigation.

The section that discusses the requirements for reinvestigation of a disputed item is 15 U.S.C. §1681i.

As usual, we start with the statute.  Please note that we will only be reviewing the section on reinvestigations, so the rest of the section will not be reprinted or discussed.

(4) Consideration of consumer information

In conducting any reinvestigation under paragraph (1) with respect to disputed information in the file of any consumer, the consumer reporting agency shall review and consider all relevant information submitted by the consumer in the period described in paragraph (1)(A) with respect to such disputed information.

How does this impact you?

The Consumer Credit Reporting Agencies have a duty to consider the information that you provide them.  That means that if you send them a copy of a judgment order that you do not owe the plaintiff money, they are obligated to consider that information.

That also means that when you send a ID Theft Affidavit, or a police report, they must consider that information.  The ID Theft Affidavit and police report are less reliable, as people make mistakes.  They can have old accounts that they do not remember, and thereby be mistaken, so they logically cannot just take your word for it.  They have to CONSIDER your information.  That means that if you provide a affidavit, or some other document with a comparable signature, they should be comparing the signatures.

This obviously comes into play much more with inaccuracies of the “not mine” type.

However, the incorrect status cases also have this issue.  For example, if the credit card company claims that you were late, or did not get a payment during a certain month, then if you provide a copy of the statement from that month (showing the minimum payment due and the due date) and the cleared check, showing that they got at least the minimum payment, on or before the due date.  With that information, the credit reporting agency has all the information necessary to show that the payment was made on time.  If you only provide a copy of the check, they do not have all, but they do have information they must CONSIDER, so they have to actually investigate.

But how does this play out in reality? Do you think that the Consumer Credit Reporting Agencies consider the information that you provide?

Our experience, and the experience of many courts around the country show that the opposite is true.  In Cushman v. Trans Union Corp, a US 3^rd Circuit Court of Appeals opinion from 1997, the court explained that a Consumer Reporting Agency (in that case, TransUnion) could not merely parrot the information of the creditor who was furnishing the data.  In Apodaca v. Discover, a case from the District of New Mexico, the district court held the same against Equifax.  In Whitesides v. Equifax Credit Information Services, Inc., the court in the Western District of Louisiana followed the same line against Experian.  In Crabill v. Trans Union, LLC, 7^th Circuit Court of Appeals, 2001, again, the court found that Trans Union was “parroting”.

While it is possible that the Consumer Credit Reporting Agency has actually looked at your documents, it is unlikely.

HOWEVER WE MUST STRESS THAT THE INFORMATION MUST BE INACCURATE OR THERE IS NO CASE AT ALL.  A technical violation is not a violation.  See, for example, the case of Deandrade v. Trans Union, LLC, 1^st Circuit Court of Appeals, 2008, in which the consumer had sued his mortgage company under a different statute, to undo his mortgage, claiming there were errors. Before that case was resolved, he sued TransUnion as they continued to report that the mortgage was still due.  Because the underlying case had not been resolved, it was unclear that the consumer had no liability for the mortgage, and therefore, it was reasonable for the Consumer Credit Reporting Agency to continue to report that he owed money, albeit with a notation that the account was disputed.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.673.4358

You can fax us: 804.673.4350

You can contact us by US MAIL:

Krumbein Consumer Legal Services, Inc.

1650 Willow Lawn Drive

Suite 300

Richmond, VA 23230

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

The Fair Credit Reporting Act is designed to protect consumers from inaccurate or outdated information on credit reports.

CONSUMER REPORTING AGENCY REINVESTIGATIONS and The Fair Credit Reporting Act

All references to code sections are courtesy of the Legal Information Institute at Law.Cornell.edu.

The Fair Credit Reporting Act requires the Credit Reporting Agencies, or Consumer Reporting Agencies to conduct a reinvestigation and the procedures around that reinvestigation.

The section that discusses the requirements for reinvestigation of a disputed item is 15 U.S.C. §1681i.

As usual, we start with the statute.  Please note that we will only be reviewing the section on reinvestigations, so the rest of the section will not be reprinted or discussed.

(2) Prompt notice of dispute to furnisher of information

(A) In general

Before the expiration of the 5-business-day period beginning on the date on which a consumer reporting agency receives notice of a dispute from any consumer or a reseller in accordance with paragraph (1), the agency shall provide notification of the dispute to any person who provided any item of information in dispute, at the address and in the manner established with the person. The notice shall include all relevant information regarding the dispute that the agency has received from the consumer or reseller.

(B) Provision of other information

The consumer reporting agency shall promptly provide to the person who provided the information in dispute all relevant information regarding the dispute that is received by the agency from the consumer or the reseller after the period referred to in subparagraph (A) and before the end of the period referred to in paragraph (1)(A).

What does this mean for you?

That the consumer [credit] reporting agency must forward the information that you provide to them on to the furnisher.  It is not enough for them to take your dispute, and communicate the substance, but they must actually forward all the relevant information.

For example, if you dispute that an item (tradeline) on your credit file (credit report) is yours, they should send a copy of your dispute to the furnisher, so that the furnisher can compare signatures.  The key to an account that is identity theft account is that someone else took your name, and social security number, and signed their signature. Their signature will not be the same as yours.  If the furnisher has a copy of the signature they can look and compare, but if the consumer (credit) reporting agency does not send them a copy, they cannot compare.

Our advice is to send a separate dispute letter to the furnisher of the information, because the nature of the dispute is not always easy to distill into a dispute form.  If you let the furnisher know, AS WELL AS THE CONSUMER REPORTING AGENCY, then there is an ability to actually review documents.

Note that there is no private right of action to sue a furnisher for not investigating when you directly dispute, but, it is an additional source of information that they should consider.  See, eg: Alabran v. Capital One, E.D. VA, 3:04-cv-935, 12/8/05 (document 87).

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.673.4358

You can fax us: 804.673.4350

You can contact us by US MAIL:

Krumbein Consumer Legal Services, Inc.

1650 Willow Lawn Drive

Suite 300

Richmond, VA 23230

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

The Fair Credit Reporting Act is designed to protect consumers from inaccurate or outdated information on credit reports.

CONSUMER REPORTING AGENCY REINVESTIGATIONS and The Fair Credit Reporting Act

All references to code sections are courtesy of the Legal Information Institute at Law.Cornell.edu.

The Fair Credit Reporting Act requires the Credit Reporting Agencies, or Consumer Reporting Agencies to conduct a reinvestigation and the procedures around that reinvestigation.

The section that discusses the requirements for reinvestigation of a disputed item is 15 U.S.C. §1681i.

As usual, we start with the statute.  Please note that we will only be reviewing the section on reinvestigations, so the rest of the section will not be reprinted or discussed.

(a) Reinvestigations of disputed information

(1) Reinvestigation required

(A) In general

Subject to subsection (f) of this section, if the completeness or accuracy of any item of information contained in a consumer’s file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file in accordance with paragraph (5), before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer or reseller.

(B) Extension of period to reinvestigate

Except as provided in subparagraph (C), the 30-day period described in subparagraph (A) may be extended for not more than 15 additional days if the consumer reporting agency receives information from the consumer during that 30-day period that is relevant to the reinvestigation.

(C) Limitations on extension of period to reinvestigate

Subparagraph (B) shall not apply to any reinvestigation in which, during the 30-day period described in subparagraph (A), the information that is the subject of the reinvestigation is found to be inaccurate or incomplete or the consumer reporting agency determines that the information cannot be verified.

This section requires a Consumer Credit Reporting Agency to conduct a reinvestigation of their own if a consumer disputes the completeness or accuracy of an item in a credit file.

If a consumer disputes an item (called a tradeline) on a credit file (most people call it a credit report), they have to do certain things.  One of the things they must do is an investigation of their own.  They are not allowed to just believe the information that is passed to them by the furnisher of the information.  This is called parroting, and courts around the country have said that this is prohibited.  See, eg: Cushman v. TransUnion, 3^rd Cir, 1997.  They must look for themselves.

REMEMBER- The Fair Credit Reporting Act is about ACCURACY.  If the item you are disputing is accurate and complete, there is no right to sue. This law is NOT strict liability- this means that you must show that they did something wrong, and that as a result of the fact that it is inaccurate and their reinvestigation did not solve the problem, that you suffered actual damages.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.673.4358

You can fax us: 804.673.4350

You can contact us by US MAIL:

Krumbein Consumer Legal Services, Inc.

1650 Willow Lawn Drive

Suite 300

Richmond, VA 23230

YOU MUST BE A VIRGINIA RESIDENT.

If you are not a Virginia Resident, click here to find a lawyer near you.

The Fair Credit Reporting Act is designed to protect consumers from inaccurate or outdated information on credit reports.

MAXIMUM POSSIBLE ACCURACY and The Fair Credit Reporting Act

All references to code sections are courtesy of the Legal Information Institute at Law.Cornell.edu.

The Fair Credit Reporting Act requires the Credit Reporting Agencies, or Consumer Reporting Agencies to have a procedure to assure “maximum possible accuracy”.

The section that discusses the requirements for maintain a credit file is 15 U.S.C. §1681e subsection [b].

As usual, we start with the statute.  Please note that we will only be reviewing the section on maximum possible accuracy, so the rest of the section will not be reprinted or discussed.

(b) Accuracy of report

Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.

The key term here is that the Fair Credit Reporting Act regulates information that is about you by making it illegal to report inaccurate or outdated information.

So, what is inaccurate?

1. Not your account (you never opened or used the account, etc.)
2. Illegal use of your account (someone charged something to your account but it was not you)
3. Wrong status (Bankrupt, they changed the age of the account, you were never late, etc.)

NOT YOUR ACCOUNT

This comes in 2 major varieties, with some minor variations.

1. Identity theft
2. Mixed credit file

Identity theft is where someone other than you opens an account in your name, using your name, your social security number, your date of birth, but you never see the account, the card, or the money.

Mixed credit file is where your name is similar to someone or your social security number is similar to someone.  In this circumstance, the credit bureaus cannot tell the difference between the 2 of you, so what is on 1 is on both.

ILLEGAL USE OF THE ACCOUNT

This is where you have a credit card with a company, but someone steals your card, and uses that card to purchase things for themselves.  This is classic credit card theft.

Another example is where you have the account, but someone steals the card number, and uses that card number to purchase things for themselves or others.  This is the newer version of credit card theft.

WRONG STATUS

This is the situation of a paid off account that shows that you owe money.

This can also be an account that shows that you were late when you never were.  There are a number of credit card companies that play games, and they might receive the money on the 10^th, when the payment is due, but they don’t process the check until after the 20^th when it is late.  Then they report that you were late, and charge you a late fee.  A secret about me —First Tennessee Bank did this to me in the 80s and 90s, and this is one of the reasons I went into consumer law.  Another example is mortgage companies that do the same thing.

Bankrupt accounts reporting as still due and owing, or charged off.  This is a common problem.

Accounts that are delinquent often go to Debt Collectors.  Sometimes they change the date the account first became delinquent, which is the key date the Credit Reporting Agencies use to determine when the account comes off your credit report.  Most delinquent accounts can only be reported for 7 years, but some can be reported for 10 (for example Bankruptcy) and others can be reported for as long as they are outstanding (for example tax liens). There is no time limit for a good account to be reported.

If you have been damaged by any of these actions, you could be entitled to recover actual damages, attorney fees and costs, and in the right circumstances, punitive damages are available.  Getting to punitive damages is very hard, so we usually tell clients that punitive damages are likely to be limited, if available, in their case.

In each of these cases, the key thing is that the information is inaccurate.  Remember, the Fair Credit Reporting Act can only help fix problems of false, inaccurate information.  If the information is true, you cannot remove that information, no matter how much you might try.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.673.4358

You can fax us: 804.673.4350

You can contact us by US MAIL:

Krumbein Consumer Legal Services, Inc.

1650 Willow Lawn Drive

Suite 300

Richmond, VA 23230

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The Fair Credit Reporting Act is designed to protect consumers from inaccurate or outdated information on credit reports.

FAIR CREDIT REPORTING ACT BASICS

In this blog entry, we will NOT go into details of what happens or what to do, only the basic outline of what happens and what is supposed to happen when dealing with credit reporting issues under the Fair Credit Reporting Act (FCRA).  It is a little bit long, because there is so much information, but bear with us.

All references to code sections are courtesy of the Legal Information Institute at Law.Cornell.edu.

So what is the Fair Credit Reporting Act?

The Fair Credit Reporting Act, or FCRA, is the law that requires that your credit file, commonly called a credit report be accurate.  It is found in the US Code at Title 15, Chapter 41, Subchapter III, or Title 15 US Code sections 1681 through 1681x.  Prior to the advent of this act, state and local law on defamatory statements were what controlled the dissemination of inaccurate information.  It required a showing of malicious intent, a standard which is pretty hard to ascribe to a corporation or business.

Congress passed the FCRA to protect consumers (individuals) from the credit reporting issues of the Consumer Reporting Agencies, commonly called Credit Reporting Agencies.  For brevity, we will call Consumer Reporting Agencies CRAs for this article.

Later, the FCRA was amended to add protections from actions of furnishers and users of consumer credit files.  Furnisher is not a term that is defined, but has been held to mean any entity (person or business) that provides information to the CRAs.  Users are entities (persons or businesses) that access the information stored at CRAs.

So who are the CRAs?  And who are Users? And who are Furnishers?

The BIG 3 CRAs are Equifax Information Services, LLC (Equifax), Trans Union, LLC (TransUnion) and Experian Information Solutions, lnc. (Experian). There are others, some are up and coming companies that are attempting to challenge the Big 3, like Innovis Data.  Others are “specialty” reporting agencies, like Medical Information Bureau, ChexSystems, and TeleCheck Services.

Users are companies who either you would like to do business with, or THINK you would like to do business with them.  Examples are Discover Card, American Express, Chase, CitiBank and Capital One.  They have a legitimate interest in seeing your credit file, to see if you are the kind of person who pays their bills.  They want to loan money to people who, by and large, pay their bills.  Preferably not all at once, so they can charge interest, but still, you should pay your bills.

Furnishers are the same people as users, only they are providing feedback about how well you pay them.  Examples are Discover Card, American Express, Chase, CitiBank and Capital One.  They are telling other people about their experiences with how you pay your bills- on time, late, or not at all.

So what kinds of things are violations?

The FCRA regulates most portions of the credit reporting industry.

Impermissibly accessing a person’s credit report allows, not only civil damages, similar to invasion of privacy, but in some cases, also criminal penalties.

The CRAs must maintain an accurate file on you, and their failure can lead to civil damages.

The CRAs also must investigate your complaints.  If you tell them something is wrong, they must investigate, tell the furnisher, and if the information is inaccurate or unverifiable, change or delete the information.

Furnishers must also be tasked with reporting to the CRAs your credit reporting history accurately, but, they must be notified properly before you can sue them for those damages. We recommend that you tell the furnisher what they are reporting wrong.  Tell them in detail, and preferably in writing.  YOU DO NOT HAVE A RIGHT TO SUE FOR THE FURNISHER MESSING THIS PART UP.  See 15 USC 1681s-2[c] and [d].

However, if you also notify the CRAs of the inaccuracy, they must send your dispute to the furnisher, and once they get the dispute that way, they must fix the problem, or face the possibility of being sued.  You must dispute to the CRA dispute addresses.  We suggest that you do your dispute in writing, sent by certified mail, return receipt requested.  It is not necessary to do this, but it makes proving that you notified them of the dispute easier.

What can you sue for?

FCRA is not a strict liability lawsuit, like the FDCPA or TILA or other actions.  Technical violations are NOT something you can sue for.  The FCRA is there to protect you from inaccurate information, so as numerous courts have said, you can only sue for information that is inaccurate.  But what is inaccurate?

Examples of inaccurate information are

1. Identity theft, where someone unknown to you (or maybe known to you, but you did not know they were doing this) opened an account that you did not know was being opened.
2. Mixed Credit File, where the CRAs have mixed you up with someone else, and their information is on  your credit report.  Mixed files and ID theft may be very hard to tell apart until the lawsuit has been filed, and discovery has started.
3. Reporting an account that you have paid as still owing.
4. Reaging, where they are reporting that an account that you failed to pay years ago, as a recent failure to pay.  This is particularly common when the statute of limitations has passed for the collector or creditor to sue to collect the money.  Most negative information can only be reported for 7 years, but there are exceptions.  15 U.S.C. §1681c.
5. Bankrupt account reporting, where the consumer has filed Bankruptcy, and the creditor either still, or again, reports the debt as owing or charged off, rather than discharged in Bankruptcy.  This may also be a violation of the discharge of Bankruptcy, 11 U.S.C. §524.

In each of these cases, if the information is there, it can cause damages, such as loss of ability to obtain credit on terms that YOU deserve. This can lead to other issues, which we will discuss in great detail in another blog entry.

If you have been damaged by any of these actions, you could be entitled to recover actual damages, attorney fees and costs, and in the right circumstances, punitive damages are available.  Getting to punitive damages is very hard, so we usually tell clients that punitive damages are likely to be limited, if available, in their case.

If you have been impacted by anything we mentioned here, you can make an appointment to see us.

NO FEE IN YOUR FCRA CASE UNLESS WE RECOVER!!

OUR LEGAL FEES:

The rights afforded to you, as a consumer, under the FCRA and the FDCPA means that a corporation or party who has violated your rights may ultimately be made to pay for statutory damages, actual damages, and your legal fees. Therefore, if we agree to represent you in any case, you won’t pay any attorney’s fees unless we are successful and we recover on your behalf. We are here to serve and have assisted many consumers TO enforce their legal rights. Let us try and see if we can help you too. That means you pay no fee in your case unless we recover.

Contact us by e-mail or by telephone or fax or US Mail.

You can call us: 804.673.4358

You can fax us: 804.673.4350

You can contact us by US MAIL:

Krumbein Consumer Legal Services, Inc.

1650 Willow Lawn Drive

Suite 300

Richmond, VA 23230