Wrong Information Reported to the CRAs?

Use these links to jump to different sections:

• What must furnishers do under the law?
• What if a furnisher has caused a consumer damage?
• How do consumers prove damages?
• What should consumers do?

Most consumers understand the role of the large credit reporting agencies (CRAs), but the role of furnishers is just as important. The big three CRAs, of Experian, Equifax and Transunion, rely on others to provide correct information for the credit files they maintain. These providers of credit information are labeled “furnishers” under the Fair Credit Reporting Act (FCRA), and can include:

• Creditors
• Landlords
• Insurers
• Employers
• Debt collectors

What must furnishers do under the law?

Furnishers are required by the FCRA to provide accurate consumer information to the CRAs, as well as correct any inaccurate consumer information. If a consumer files a dispute with one of the CRAs, the furnisher of the disputed information is required to complete the following steps under the FCRA:

• Conduct an investigation of the inaccurate information
• Review all relevant information provided by the consumer
• Report the results back to the CRA within 30 days

Furnishers have the same duties when a consumer files a dispute directly with the furnisher. If the investigation shows incorrect information, incomplete information or unable to be verified, the furnisher must either:

• Modify the information
• Delete the information
• Permanently block the reporting of that information

What if a furnisher has caused a consumer damage?

A furnisher’s credit report error could result in a consumer being denied credit or losing out on a job opportunity. Furnishers are liable for damages they cause by not complying with the requirements of the FCRA. The amount of damages a furnisher may be liable for will depend on the furnisher’s conduct and whether that conduct is found negligent or willful. Negligent conduct is conduct that falls short of what a “reasonably prudent person” would do; willful conduct is conduct performed with knowledge or reckless disregard of the law. If a furnisher’s conduct is found negligent or willful, the furnisher is liable for the consumer’s actual damages, which can include the following:

• Out-of-pocket expenses
• Lost wages
• Lost credit opportunities
• Emotional distress and humiliation
• Damage to reputation

How do consumers prove damages?

Calculating damages like out-of-pocket expenses and lost wages should be straight-forward. However, emotional distress damages and damages to the consumer’s reputation may be more difficult to calculate. These damages can be awarded even in the absence of out-of-pocket expenses, and there is no limit to the amount of damages—if a consumer can prove the loss. Emotional distress damages must be supported by something more than a victim’s bare allegations. The consumer’s dispute must be coupled with additional evidence of actual or genuine injury, which can take the form of:

• Testimony regarding the surrounding circumstances
• Testimony of the injured party’s conduct
• Corroboration of other witnesses
• Medical or psychological evidence

Willful violations of the FCRA open the door for statutory and punitive damage awards. Punitive damages are primarily tools of deterrence, and must be both reasonable and proportionate to the amount of actual damages to the consumer. Victims may also recover their attorney fees and court costs from a furnisher who violates the FCRA. The award of attorney fees often allows consumers to hire an attorney on a contingent-fee basis—meaning the consumer will pay nothing to the attorney unless the attorney recovers money damages from the furnisher and CRAs.

What should consumers do?

Consumers must keep an eye on their credit reports and credit accounts, if there is an error, they should formally dispute it, in a written dispute letter, via certified mail with the bureaus; the online dispute process offered by the CRAs does not provide a reliable record of the dispute. When consumers don’t get the results they feel they should when disputing with furnishers or CRAs, it may be time to contact an experienced Virginia consumer attorney to determine if relief for their credit woes is available through the courts. For more information on this area of law, see our overview of consumer law.