How Does The FCRA Protect You?

What You Need to Know About the FCRA

The federal Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. Companies that provide information to consumer reporting agencies also have specific legal obligations, including the duty to investigate disputed information. In addition, users of the information for credit, insurance, or employment purposes must notify the consumer when an adverse action is taken on the basis of such reports. If you believe that you have experienced a violation of the FCRA, the law protects you in the following ways:

1. Actual Damages

If the conduct of the furnisher (the one who gives the information) or the credit reporting agency (Equifax, Experian, TransUnion, etc) has actually harmed you, then the FCRA allows you to recover damages to compensate you for your loss. This loss or damage can be in the form of emotional distress (mental anguish) or it can be the loss of a job or loss of a mortgage (i.e. you missed out on a house because of false credit reporting), etc.

Actual damages can serve as a powerful tool that can help you on the road to recovery if you have suffered from false credit reporting.

2. Attorney Fees and Costs

The FCRA allows for the recovery of attorney’s fees and costs if you are successful in your case. This is critical in allowing you to hire competent and experienced attorneys.

3. Statutory Damages

If the conduct of the defendants was intentional, then you can receive up to $1000 per violation in what are known as statutory damages. These are damages that are awarded even if you have not suffered actual damages. Instead, these damages are to encourage you to bring suit against lawbreakers and to encourage the lawbreakers to start following the law.

4. Punitive Damages

Similar to statutory damages, if there is willful (or wanton) conduct, the judge or jury can award punitive damages. These damages are to punish the wrongdoer. These damages also serve to discourage the wrongdoer and similar companies from doing this same or similar type of misconduct in the future. In the FCRA context, this has been as high as 80 times the amount of other damages awarded but more typically it will not exceed 3-5 times the actual damage award you receive.

The furnishers and credit reporting agencies should always have a chance to correct any errors since you must dispute it first. However, if they don’t correct it after you dispute it, then filing a lawsuit is certainly justified. The FCRA is designed to make it possible for you to recover damages and to punish the wrongdoer if the misconduct was intentional. Attorney fees are also provided so you can hire a lawyer even if you don’t have a high actual damage award and to also encourage the lawbreakers to quickly resolve cases.

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