Congress enacted the Fair Credit Reporting Act (FCRA) to provide consumers with important consumer rights regarding the information found in their credit reports. The FCRA also provides consumers a valuable opportunity to correct erroneous or inaccurate information in their reports. Originally passed in 1970, the Fair and Accurate Credit Transactions Act of 2003 made substantial changes to the FCRA. Now, the Fair Credit Reporting Act addresses not only the accuracy of credit reports, but also offers identity theft protection and restricts unsolicited marketing of financial products to consumers. Despite these valuable rights, many consumers are not aware of them.
Basic Protections Under the Fair Credit Reporting Act
One of the biggest changes to the FCRA in 2003 was that consumers were given the right to receive one free credit report per year. Prior to this change, credit bureaus were generally permitted to charge fees when a consumer requested a credit report. A consumer is also permitted to receive a free report if a company denies credit or employment, or offers them a higher interest rate based on information reported by the credit reporting agency. Consumers also have the right to dispute any inaccurate information with both the reporting agency and the company that provided the information. The law also addresses identity theft, heightens accuracy requirements, and comprehensive reinvestigation processes.
Common Fair Credit Reporting Act Violations
Unfortunately, violations of the FCRA continue to occur regularly and most consumers are unaware of these violations until they need their credit report accurate. By then, it is often too late. The most common ways that creditors and credit reporting agencies violate the Fair Credit Reporting Act include:
• Mixing credit files between people with similar names or differing generations, such as Jr., Sr. and III
• Identity theft cases are among the most common violations as the 2003 changes to the law specifically addressed how identity theft reports must be handled, yet few creditors or reporting agencies are following these guidelines.
• Reporting authorized users as being responsible for accounts as co-debtors
• Failing to provide adverse action notices by creditors to consumers prior to reporting negative information to credit reporting agencies
• Altering the date of last activity in an effort to keep negative information in a credit report for a longer period of time
• Verifying negative information disputed by a consumer without conducting a reasonable and adequate investigation
Enforcing the Fair Credit Reporting Act Through Consumer Rights Attorneys
Although consumers are sometimes able to correct information in a credit report by their own initiative, credit reporting agencies are still less likely to correct inaccurate credit data based on a consumer’s dispute. For this reason, consumers often must resort to using the services of an attorney to force the correction of inaccurate credit data. Consumer Rights Attorneys have the knowledge, skills, experience, and abilities to address violations of the Fair Credit Reporting Act. Consumer Rights Attorneys also generally offer free consultations to consumers who believe they are victims of unfair credit reporting practices.
Knowing FCRA rights provided to consumers is the first step in addressing any problems contained in a credit report. By understanding these important FCRA rights, consumers can take steps toward correcting any errors discovered in credit reports. When the credit reporting agency or the creditor continue to violate the Fair Credit Reporting Act, the consumer may have a right to legal action.