There have been many instances when people have brought lawsuits against credit reporting agencies over errors and omissions in the reports filed by the agencies. For some, these lawsuits have been successful. For others, they have not been. What is clear from all the lawsuits is that the credit bureaus and reporting agencies need to be more organized and specific in their claims of fraudulent activities. Many of the plaintiffs did not want to break out into a series of separate components: first, they didn’t want to litigate themselves; second, they did not want to engage in a long litigation process. For them, it was a question of principle rather than an opportunity for financial gain.
It is important for consumers to understand the basis of lawsuits filed by the Federal Trade Commission against three of the major credit reporting agencies.
This is so that consumers will have a better idea of whether they need to file a lawsuit, what sort of allegations to make, and so on. First, consumers can file a lawsuit against the agencies individually, which is a legal concept known as “personal jurisdiction.” In most states, this requires that the plaintiff show that there has been and could be a violation of the statute.
The second option available to consumers is to file a class-action lawsuit, which is governed by federal law under the Fair Credit Reporting Act.
Class-action lawsuits are not pending before the courts at this time. However, the Northeast law group recommends that a consumer who hasn’t received a free copy of their credit report and has been discouraged from checking it because of a negative mark should “filing a complaint.” The Northeast group advises that consumers should also notify the credit bureau that they have received a copy of the complaint, which will help the bureau investigate the matter.
Once the agency receives a complaint about a certain item on the consumer’s report, they must investigate.
Under the FCRA, if the bureau does not complete an investigation within 30 days, they must remove the disputed item from the report. If they do not remove it, then the consumer can initiate an investigation through the courts. Although the investigation process varies with each agency, usually the furnisher will provide information and resources to assist in the investigation.
The third option available to consumers is to hire a law firm to represent them in the dispute with the credit reporting agencies.
There are several factors to consider when engaging the services of a law firm. One, these firms have much stronger defenses of consumer lawsuits than the agencies. For instance, since the defendant is being represented by the same lawyer, the defendant is likely to feel more comfortable litigating the matter. Two, if the plaintiff cannot locate a lawyer willing to fight the furnisher, the plaintiff may want to choose a plaintiff who has a higher reputation.
Although original legislation provided the basic framework for the Fair Credit Reporting Act, the latest revisions provided additional protection for consumers.
The new law requires the bureaus to clearly state what information they consider as inaccurate. It also requires them to suspend processing a report under certain situations. This new law, along with the updated regulations, has proven to be beneficial to all consumers, and could set the stage for positive change in the way that the bureaus handle their credit information and reviews.