Victory for consumers in a Fair Credit Reporting Act case! The government is not above the law in cases where it refuses to remove false information from a consumer report. In the attached opinion, this firm defeated the government’s attempt to weasel out of the law that applies to all furnishers of credit information. Order Denying Defendant’s Motion to Dismiss
I was in Court the other day, representing a client who was being sued by a debt collector. Prior to my client’s case being called, I watched a debtor try to explain to the judge why she did not owe the debt. Her explanation sounded plausible, but the judge gave the debt collector a judgment for the full amount.
You might ask, “Why did this happen?” Well, it turns out that the debtor failed to answer the complaint correctly, missed a deadline for answering discovery, and did not respond on time to a motion filed by the debt collectors attorneys. The judgment was over $10,000.00.
The judge called my client’s case next. It was a lawsuit for more than $10,000.00. I pointed out to the Judge that the other side had failed to meet a crucial deadline. The Judge agreed and the debt collector’s lawsuit became worth very little. After that hearing, the case settled for a very small amount. My client saved over $7,500.00 and more importantly, my client did not get a judgment on his credit report.
The difference between these two outcomes is stark.
If you are sued, get a lawyer who knows what he or she is doing.
Your Credit Report: Timing is everything.
We receive several calls a week from consumers who have been denied credit because of false derogatory information in their credit reports. Many of these callers are trying to finance a car or a house and the false information is either preventing the loan from going through or else threatening to increase interest rates well above what they’d otherwise be entitled to.
These consumers want fast results. Unfortunately, given these facts, no such thing is possible. The Fair Credit Reporting Act, 15 U.S.C. 1681 et seq. (“FCRA”) — the federal law which governs credit reporting and which pre-empts all of the various state laws — sets out a procedure which takes up to 45 days before the consumer has a right to bring a lawsuit.
It is crucial that you understand that you, as a private citizen, cannot bring a lawsuit against a company merely for lying about you to the credit bureaus. That’s what the law says. It requires the consumer to initiate a dispute through the credit bureaus before the law recognizes any damages or liability. The procedure can take up to 45 days. If the dispute is done properly and the furnisher of the false information fails to do a reasonable re-investigation, only then is there a potential cause of action.
The time to check your credit is well in advance of a major purchase. The best way to do this is to avoid the re-sellers you see advertised on television and go to www.annualcreditreport.com and get one of each of the three major reports. Do not get a merged report or a three-in-one report. My experience is that these merged reports exclude vital information you will need to dispute false information and also leave out other data which may be helpful later. Print each one out. Keep them in order and do not mark them up; in other words, don’t write on them or make a scratch copy for notes, but keep a clean copy.
At this point, your best bet is to sit down with someone who is familiar with these reports and whether the data is accurate. Call my office if you need help. Even where the debt belongs to you, you can still challenge false information being reported about that debt where it has an unduly negative affect on your ability to obtain credit.
Be forewarned: the dispute process is counter-intuitive. if you screw it up, you will not have a viable lawsuit against the company that is reporting false information against you.
Call my office if you need help. We handle FCRA cases regularly and have had great success in the past.
[The Ripoff of the Day is Credit Reporting in general. This will be the subject of a later post. Maybe several.]