Articles Posted in Credit Report Violations – FCRA

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how-to-tell-if-a-debt-collector-is-legit-832x400-1When is it time to ignore calls versus doing something about them?

If you are being harassed or threatened collection actions on old debt, there are many things to consider.  First, a legitimate collector is required to send you something in writing within five days of the initial contact under the FDCPA.  That’s sort of a litmus test.  Receiving nothing in writing is a violation, but it’s also a sign of a debt scammer.

Second, check your credit report via annualcreditreport.com.  If the debt is on there, it’s causing you harm and you should do something about it.  Contact us or another consumer attorney — the first steps would be to dispute the debt.  Often the consumer rules aren’t being followed.  For instance, balances are reflected more than once, or are inaccurate in other ways.  We often file actions under the Fair Credit Reporting Act which may result in the debt being removed once and for all (waiver of debt or trade line deletion), and you may receive damages due to the inaccuracies.  Everything relies on good credit it seems.  Bad credit can harm you in all kinds of ways.  You don’t pay us up front – we only get paid if we are successful in obtaining a recovery.

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People are often confused about how attorney’s fees work – when do you have to pay your own, and when does the losing party have to pay?  This question is very important when you are faced with a decision of whether to “take someone to court”.  In the United States, each party pays their own attorney’s fees unless a contract or statute states otherwise.  Often a person is denied justice unless a contract or statute allows recovery of attorney’s fees because it simply does not make financial sense to right all wrongs.

Many consumer protection or debt harassment protection statutes such as the FCCPA, FDCPA, and the FCRA provides for the recovery of attorney’s fees.  Attorneys act essentially like mini attorney generals in that regard.  We can sue for someone under a statute that provides payment from an offending creditor for instance.

Contracts are another way in which attorney’s fees are recoverable.  You might read in a mortgage or debt related contract that the creditor is permitted to obtain its attorney’s fees and court costs if it has to pursue legal action to collect a debt.  While these contracts don’t clarify this, an attorney’s fee provision in a contract goes both ways, at least in Florida.  If the consumer is the prevailing party, the consumer can obtain their attorney’s fees and court costs as well.

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A mortgage servicer called a “furnisher” for purposes of credit reporting is responsible for updates to a borrower’s credit report.  Many times following a foreclosure, there is a limited time for the lender to seek a deficiency judgment.  Here is Florida it is one year.  If a year goes by, and the lender fails to seek a deficiency judgment then it waives the amount it is still owed after the foreclosure sale of a home.

Here’s the good news:  If a lender fails to report a deficiency as having been eliminated, discharged or abolished, it is then reporting inaccurate information.  This inaccurate reporting opens the door to the furnisher’s liability under the federal Fair Credit Reporting Act, 15 U.S.C. Section 1681 et seq., (the “FCRA”) per the Ninth Circuit (California) in a recent case.  Gross v. CitiMortgage, Inc., 20-17160 (9th Cir. May 16, 2022).

This case is being compared to a leading contempt case, where the Supreme Court in Midland Funding  LLC v. Johnson, 137 S.Ct. 1407, (2017) found that a debt collector who filed a proof of claim in a bankruptcy that was obviously barred by the statute of limitations did NOT engage in false, deceptive, misleading, unconscionable, or unfair conduct so there was no violation of the Fair Debt Collection Practices Act.  While this decision involved a different set of circumstances and a different law, it is clear that these two views could be considered as inconsistent.

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debt-collection-dos-and-dontsNow that debt collectors are back and moratoriums are falling away, this is a good opportunity to remind Florida consumers about limitations that bind debt collectors.  Basically, things they may do or say that could get them into trouble, and give you recourse to sue or settle or more favorable terms.  So what do we look for?

  • Misleading letters regarding payment options, statute of limitations, or credit reporting.
  • Letters lacking required disclosures or misleading about dispute process.
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Credit-ReportWhat are the most common errors on a credit report that lead to FCRA claims — and resulting damages?

  1. Status Disputes – error/inaccuracy standards which give rise to valid disputes:
  • these are things that are factually inaccurate such as:
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Denied-ins-policyIn our consumer practice, I was surprised to see that denials of life insurance or annuities are often a violation of the Fair Credit Reporting Act (“FCRA”).  The medical screening reports are often ad hoc and inaccurate.

If you have applied for life insurance and been denied, don’t give up.  Instead, check your report with Medical Information Bureau (“MIB”).  You may find that it’s patched together and has information well over the allowed seven years or contains otherwise inaccurate diagnosis.

Prescriptions and your Rx history are tracked by Milliman INtelliscript based out of Brookfield, Illinois – 871-211-4816.

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credit-confid-infoWhen you have an apartment or employment denial, you can call the numbers listed below for the screening company and request a copy of the background report:

  • Accurate Background, Inc. – Irvin, CA 800-216-8024
  • First Advantage Corp. – Atlanta, GA 800-845-6004
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credit-report-wrongThe FCRA requires that “[w]henever 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.” 15 U.S.C. Section 1681e(b).

That’s a high burden “maximum possible accuracy”!  And it is not being met.  In one over the top case of ours, despite a client providing proof of life, she was reported as deceased by her student loan servicer over and over again wrecking havoc on her credit report.

More typically we run into instances where student loans are incorrectly reported as being in default when in fact they are no longer owed due to a settlement or discharge in bankruptcy.  This in fact is becoming our bread and butter raising these types of claims.

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arbitrationAre you looking down the barrel of an arbitration clause in your consumer/creditor agreement?  I’ve posted before (Arbitration Clauses in Consumer Contracts – How to Avoid Being Thrown out of Court) on some local case law here in Florida to help avoid arbitration clauses – but here’s a new case in the consumer’s favor in Bankruptcy Court for the Middle District of Florida.

The Bankruptcy Court ruled that an arbitration clause did not constrain the court’s contempt powers, “[w]ords in a consumer agreement cannot deprive the bankruptcy court of the inherent power to enforce compliance with an injunction.”  Verizon Wireless Personal Communications, LP v. Bateman, No. 14-5369, Adv. Pro. No. 18-1394 (M.D. Fla. Sept. 24, 2019).

So if you’re in bankruptcy, or had a previously filed one that you can reopen (without a filing fee), challenge the arbitration clause in bankruptcy – you may be much more likely to win!

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check-your-credit-reportIt’s very easy to file an online or even phone dispute with a credit bureau.  It’s fine to start a dispute in this manner.  However, to ensure that all parties are required to investigate the dispute and update the consumer’s credit report, it is important to provide notice to the furnisher as well.  A furnisher is the party who reports to the credit reporting agencies (“CRAs”).

In an April 2019 decision, Hunt v. JP Morgan Chase Bank, Nat’l Ass’n, the 11th Circuit, the appellate court governing the State of Florida, held that a class action could not go forward against the furnisher of consumer information because it (JP Morgan Chase) was not notified of the dispute.  When JP Morgan Chase initially provided information to the CRAs about a consumer’s account being past due, this was an accurate statement.

The Court did not address whether JP Morgan Chase had an obligation to “refresh” information it had previously provided — had it received notice of the dispute.  Finding that the furnisher did not receive notice of the dispute, the Court stopped its analysis there.

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