Articles Posted in Credit Report Violations – FCRA

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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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fcraMany of our clients are getting their feet back under them now from the bankruptcies and foreclosures of the past few years.  In our efforts to help them improve credit scores, we often will see an old creditor which reports a debt inaccurately after its been sold or transferred to another.  Some of these furnishers/creditors argue that once they sell the debt, they have no further responsibility to ensure accurate reporting for that debt.

This is not true.  The duty to report accurately does not end once ownership of an account transfers or is sold.  Any furnisher must re-investigate upon receipt of a dispute from a Credit Reporting Agency (CRA).  Failure to do so, opens both the furnisher and the CRA up to liability for an FCRA violation.  If the furnisher does not respond to the dispute, then the CRA must delete the tradeline.

Damages under the FCRA can be substantial and can include claims against all three of the CRAs as well as the furnisher if they do not abide by this law.  Statutory and actual damages are available as well as attorney’s fees and costs – which are usually handled on a contingency basis where fees and costs are only due in the event of a successful recovery.  Further information can be found on our website.

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law-gavelWhat happens to the original debt when a consumer files an unlawful debt collection lawsuit?  Sometimes the creditor will file a counterclaim to force the underlying debt to judgment in an effort to turn the tide in favor of the debt collector.

Fortunately, in the Middle District of Florida there are several good recent cases that prevent this outcome.  The federal court has ruled there is no subject matter jurisdiction because there is no supplemental jurisdiction over the counterclaim based on the fact that the counterclaim is permissive and would substantially predominate over the plaintiff’s claims, and because the “set off” position didn’t support supplemental jurisdiction.  See Della Vecchia v. Ally Financial, Inc., No. 8:17-cv-2977-T-23AAS, 2018 WL 907045 (M.D. Fla. Feb. 15, 2018); Vernell v. Ally Financial, Inc., et. al., No. 2:15-cv-674-FtM-38MRM, 2016 WL 931104, at *4 (M.D. Fla. Mar. 11, 2016).

This can be an important litigation concern that could force an early and minimal settlement if it weren’t for this case law favoring the consumer.

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consumer-law-with-bkWhen you are thinking about hiring a bankruptcy attorney, what should you consider? – besides all the regular stuff like client reviews, years of practice, cost, availability, knowledgeable, friendliness of attorney and staff etc.

One thing to keep in mind is what other areas does that law firm handle and could that help you fix your situation.  As you can see from the chart above, many bankruptcy attorneys just take bankruptcy cases.  While that’s fine, most people facing a bankruptcy also have issues with their credit report, foreclosures, debt collection violations, robo calls, student loans etc.  We handle all of that.  We also have a class action team.  One consumer area we don’t handle is vehicles – I don’t know a thing about our lemon laws or other issues regarding vehicles for instance.

I’m not suggesting you hire someone who dabbles in bankruptcy to file your bankruptcy.  That is probably the worst thing you can do.  But hiring a firm that is experienced in bankruptcy plus the other issues you are facing is probably best.  We have over 25 years experience in bankruptcy plus a myriad of other consumer related issues commonly faced by our clients.

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fcraDid you ever wonder why credit reporting agencies cannot correct an error?  Even one that seems rather obvious to you?

The reason is the elaborate mechanism created by the credit reporting industry is inherently flawed.  This leads to inaccurate credit reports that lead consumers to paying too much for credit or being denied credit altogether.

The Fair Credit Reporting Act (“FCRA”) uses a standard that requires “maximum possible accuracy”.  This high burden was created by Congress in 1970 due to the need for consumer reporting agencies to assemble and evaluate consumer credit and other information  on consumers while acting in a fair, impartial manner respectful of a consumer’s right to privacy.  Congress recognized that the power to control this information could easily be misused and abused.  Credit bureaus do not consider the consumer as their customers.  They work for the creditors.

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Most of us still use the New Year as an opportunity to review the past year and set goals for the New Year.  My own practice has grown tremendously from this goal setting.  We target the best strategies to grow our practice and help our clients to get back on track financially.

As most of you know, we practice bankruptcy and foreclosure defense as we have for many years, but since student loan debt has become such a crisis, much of our work is focused on eliminating that debt.  We have developed different strategies both inside and outside of bankruptcy to reduce student loan debt.

A new tool we are adding this year involves the misreporting of student loan debt on credit reports.  Put quite simply, the student loan servicers often can’t get it right.  They send bills with different amounts owed, transfer the debt so often that it appears duplicate times on a credit report, inaccurately reports payments etc.  We intend to hold them accountable.  Stay tuned as we hope to blog about this regularly to help our readers recognize when their credit reports may be in error and costing them real money – by denied credit or increased cost of credit, insurance etc.

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robocalls
From time to time, our consumer law practice here in Tampa, Fl has had to shift gears to better use our state and federal laws that protect consumers faced with debt – and the inevitable robocalls and erroneous credit reports that come with that.

The current state of robocalls is very similar to the days of emails before spam filters.  With the advent of the internet, businesses don’t need expensive hardware.  Anyone can start a mini call center with software that auto dials and spoofs caller IDs.  Many of the calls appear local and they avoid detection as a debt collector.  Small and large companies both still use predictive dialers capable of making hundreds of thousands of calls daily despite a consumer withdrawing consent to call their cell phone.

Thankfully, over the next year or two, the FCC and phone companies will implement a call certification protocol where the phone carrier can verify the caller is legitimately using the number — and Caller IDs may once again mean something!

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credit-report-730-approved
Punitive damages are increasing as more people start challenging errors on their credit reports.

“Errors” is a funny word.  A creditor will likely claim that it was an unintentional “error” that they reported negative information on your credit.  But as it really an error?

Punitive damages are on the rise around the nation as more and more people and their consumer attorneys fight back over false information reported on their credit.  Inadequate training of personnel, sloppy record keeping, debts being bought and sold repeatedly has led to greater frequency of credit report errors.  Errors that can cause consumers thousands of dollars in increased credit costs.  The lower someone’s credit, the higher interest rate they can be charged when borrowing money.  A lower credit rating for consumers as a whole potentially increases the bottom line for financial institutions across the board.

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credit-scores
Fortunately, there are several laws that provide both protection and damages for consumers facing errors on their credit reports.  These include the Fair Credit Reporting Act (the “FCRA”), the Fair and Accurate Credit Transactions Act (“FACTA”) and most recently the Dodd-Frank amendments.

Credit reports are not only key to obtaining a home, vehicle, and credit cards, but they are also very important in obtaining employment, security clearances, insurance etc.  Even if negative credit doesn’t prevent you from obtaining any of these things, you’ll pay a much higher interest rate if your credit has been damaged.

Pull your credit regularly to make sure your creditors are following the law and not causing you harm.

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