Credit reporting errors can be a nightmare that turns your life upside down, often at the very moment when it looks like life is about to change for the better. Credit reporting errors can prevent you from getting a loan, a job, insurance or housing. Unfortunately, consumers who are harmed by credit reporting errors may have no idea why they were turned down, or that there are laws to protect them from credit reporting errors.
If your credit report or background screening report contains errors, you have the right to have those errors corrected. If the reporting agency fails to the correct the errors and you suffer damages as a result of the error, West Virginia consumer rights attorney Jeff Mehalic is here to help you recover fair compensation at the expense of the reporting agency at fault.
Call Mehalic Law PLLC today at 304-346-3462 to learn more about your rights and how we can help. Our firm proudly represents clients in Morgantown, Wheeling, Martinsburg and other areas in West Virginia.
Read more about repairing your credit at the links below:
- Consumer Reporting Agencies – Not Just Credit Reports
- Fair Credit Reporting Act (FCRA)
- Common Credit Report and Background Screening Errors
- When and How to Check for Errors
- Compensation for Harm Caused by Credit Report and Background Check Errors
- Getting Started with Your Free Consultation
Most consumers are well aware of the “big 3” credit reporting agencies Equifax, Experian and Transunion. But many do not know about and have never heard of the many specialty consumer reporting agencies that provide background check screening services to potential employers, landlords and insurance companies. Your credit report is just one of many types of consumer reports.
Consumer reports can include a very wide variety of information including:
- Criminal record
- Sex offender record
- Terrorist watchlist information
- Credit reports
- Check writing history
- Judgements and liens
- Civil lawsuits
- Eviction reports
- Rental history
- Employment history
- Professional license verification, including sanctions or suspensions
- Driving record
- Loss history report – home and auto insurance claims, also known as a CLUE report
- Medical records
Errors on your consumer reports can cause a multitude of problems including:
- Losing your job, being denied a job, having a job offer rescinded
- Inability to get a loan, mortgage, credit card or another type of credit
- Paying higher interest rates
- Being denied housing
- Paying a higher deposit on housing
- Being denied insurance
- Paying higher insurance premiums
The Fair Credit Reporting Act (FCRA) is a federal law implemented in the 1970s to promote accuracy, fairness, and privacy of the information that consumer reporting agencies collect. While the FCRA requires accurate reporting, it generally falls on you, the consumer, to find errors and take action to have them corrected. If you find errors and report them to the agency that is reporting the inaccurate information, the agency is required to correct the error. If it does not, you have the right to sue for compensation.
In 2003, the FCRA was amended so that you are now entitled to one free copy of your credit report every 12 months, from each of the credit bureaus – Equifax, Experian, and Transunion. You are also entitled to a free annual copy of your report from national specialty consumer reporting agencies. These are not sent to you automatically. You must request each one which, in itself, can be a frustrating and time-consuming process.
The free annual reports can help you research your records to determine if there are errors before those errors create problems for you, and it is prudent to take advantage of that opportunity each year.
You are also entitled to a free file disclosure under many circumstances including:
- An adverse action such as credit denial or being turn down for a job or housing
- You have placed a fraud alert in your file due to identity theft
- You are a fraud victim
- You are unemployed and plan to apply for a job in the next 60 days
- You are on public assistance
When you discover credit reporting or background check errors and report them, the reporting agency has 30 days to investigate and remove or correct any inaccurate, incomplete, or unverifiable information within 30 days. If it fails to do so, you can and should take legal action to have the information corrected and if the inaccuracy has caused you harm, you should pursue monetary compensation.
Yes, you can sue consumer reporting agencies, such as Equifax, for Fair Credit Reporting Act Violations. Attorney Jeff Mehalic can help. You do not pay attorneys’ fees out-of-pocket. The fees are paid from the settlement itself or awarded by the court. You will not be asked to pay a fee retainer or an hourly rate.
Credit reporting errors are frighteningly common. According the Federal Trade Commission (FTC), one in five Americans has at least one error on one of their reports with the three major credit bureaus. This does not include errors in information with specialty consumer reporting agencies, such as the many companies offering background screening, many of which use unreliable methods of gathering the information they report.
Credit and background screening errors can be the result of carelessness or intentional wrongdoing. Having a common name increases your risk of having errors on your report.
Common credit report and background check errors include:
- Wrong name
- Mixed or merged reports
- Address that has never belonged to you
- An arrest where no charges were filed
- Criminal convictions from someone else’s record
- A single criminal charge listed multiple times
- Misclassification of crimes, such as a misdemeanor listed as a felony
- Missing information about a criminal charge, such as being found innocent
- Information that has been sealed or expunged
- Debt that has been discharged in bankruptcy
- Debt that has been written off listed as delinquent
- Same account listed more than once
- Same debt listed more than once
- Accounts that do not belong to you
- Debts that are older than seven years old
- Bankruptcy that is older than 10 years old
- Eviction of someone else with your name
- Closed accounts listed as open
- Same account listed multiple times with different creditors
- Account incorrectly listed as delinquent or late
- Wrong date on missed payment
- Incorrect balance or credit limit
- Debts from an ex
- Errors that have been corrected but have reappeared on your report
Many of the companies that perform background checks do not bother to verify that the information is correct or that it even belongs to the right person. This is especially true of screening companies that offer fast results.
Ideally, you should keep an eye on your credit reports and check all three at least once a year, even if you do not suspect a problem.
If you have suffered an adverse action, you have the legal right to know why and the opportunity to correct any errors on your credit report or background check that led to the adverse action. Examples of adverse actions include:
- Turned down for credit
- Denied housing
- Turned down for job opportunity
- Denied insurance
- Charged high insurance premium, interest rate or deposit
Under the FCRA, if you have suffered an adverse action due to information in your credit report or another consumer report, you have the right to know which agency provided the information and to see the information in your file. If you are not automatically provided with the name of the reporting agency as well as their address and phone number, request it. Potential creditors, employers, landlord, insurers and others who rely on these reports to make decision are obligated to provide the information.
You will then need to request a copy of the report and check it for errors. Reporting agencies must provide your report for free if you have suffered an adverse action. If you find errors, you must contact the reporting agency to dispute the error. The agency must respond or correct the error within 30 days. If they fail to respond or correct the error, you then have the right to sue.
The harm you can suffer as a result of credit report and background screening errors can be financially devastating and emotionally crushing.
It could mean losing the chance to buy your dream home, buy a vehicle or start a business. You may be prevented from launching the career you have been working toward all of your life. You could lose the job you already have. Background screening errors can prevent you from renting a home and could mean that you and your family become homeless or are forced to move to a dangerous area.
These are just a few examples of the type of harm that you may suffer. You may be able to recover compensation for both economic and non-economic losses. You may be able to recover statutory damages, punitive damages and attorneys’ fees.
Economic damages are the money you lost. Examples include paying higher interest, being turned down for a loan, lost earnings from being fired. Non-economic damages are your suffering that does not carry a specific dollar value. This can include mental anguish, embarrassment, difficulty sleeping, loss of enjoyment of life and more.
Statutory damages may be awarded even if you did not suffer economic damages if you can prove that the reporting agency acted intentionally. FCRA allows for $1,000 in statutory damages for each violation. In rare cases where you can prove that the reporting agency acted recklessly or the violation was intentional, you may receive punitive damages. Punitive damages are meant to punish the wrongdoer rather than to compensate you.
Your attorneys’ fees are also paid, either out of the settlement or by court award.
Credit report and background check errors are very serious and when agencies fail to correct them, they are in violation of federal law. You have the right to sue for compensation for the harm they have caused, but you will need the help of an experienced consumer rights attorney.
Contact Mehalic Law PLLC today online or at 304-346-3462 to schedule your free initial consultation. Jeff Mehalic helps clients from Morgantown, Wheeling, Martinsburg and nearby areas in West Virginia, and he is ready to help you.