The Fair Credit Reporting Act (FCRA) is a federal law that was enacted in 1970 and aimed at protecting consumers’ credit information. The FCRA regulates how credit reporting agencies can use and share consumer data.
Despite the act being in place for over 45 years, there are still many businesses that violate its provisions. In this blog post, we will explore some of the most common FCRA violations so you can be sure your business is in compliance.
The Top 5 FCRA Violations You Need to Know About
1. Not Obtaining Written Permission from the Consumer Before Obtaining a Credit Report
Under the FCRA, businesses are not allowed to obtain a consumer’s credit report without first obtaining written permission from the consumer.
This permission must be in writing and must expressly state that the consumer’s credit report may be obtained for the purpose of making a decision about extending credit to the consumer.
2. Not Disclosing to the Consumer that a Credit Report Will Be Obtained
All businesses must disclose to consumers that a credit report will be obtained prior to requesting or obtaining the consumer’s credit report. This disclosure can be made orally, in writing, or electronically.
3. Relying on an Outdated Credit Report
The FCRA prohibits businesses from relying on credit information that is more than four months old when making decisions about extending credit to consumers.
This means that if a business obtains a consumer’s credit report on May 1st, it cannot rely on that information when making a decision about extending credit on September 1st.
4. Not Promptly Providing Adverse Actions Notices
If a business takes adverse action against a consumer based in whole or in part on information in the consumer’s credit report, then the business must provide the consumer with notice of the adverse action. The notice must include:
- The name, address, and phone number of the credit reporting agency that supplied the information used in taking the adverse action;
- A statement that the credit reporting agency did not make the decision to take the adverse action and is not responsible for the adverse action;
- A statement indicating that the consumer has a right to obtain a free copy of his/her credit report from the credit reporting agency within 60 days; and
- A statement indicating that the consumer has a right to dispute directly with the credit reporting agency any information in his/her credit report used to take adverse action against him/her that he/she believes is inaccurate or incomplete.
5. Refusing to Provide a Free Annual Credit Report
Under federal law, each of the three major credit reporting agencies – Equifax, Experian, and TransUnion – is required to provide consumers with one free annual copy of their credit report upon request.
This free annual copy does not include your FICO score, but it includes all other information in your file, such as your personal information, account history, inquiries, etc.
Ways You Can Be Victimized By FCRA Violations
- Being denied credit, employment, insurance, or another opportunity because of information in your credit report that is inaccurate or incomplete
- A background check is performed on you without your knowledge or consent
- Having your identity stolen and used to apply for credit, employment, insurance, or another opportunity
- Being denied access to your own credit report
- Being charged for goods or services that you did not receive
- Receiving unsolicited offers for goods or services that you did not request
- Problems caused by fraudsters opening new accounts in your name without your knowledge or consent
- Harassment by debt collectors who are collecting on a debt that is not yours
- Being sued by someone who is using your identity without your knowledge or consent
- Having your tax refund intercepted by someone who filed a tax return in your name without your permission
- Being contacted by an employer who has received false information about you from a consumer reporting agency
There are many other ways consumers can be victimized by FCRA violators as well.
Remedies For FCRA Violations
If you’ve been the victim of FCRA violations, there are steps you can take to seek justice.
File A Complaint With The Federal Trade Commission
The FTC is responsible for enforcing the FCRA, so they are a good place to start if you believe you have been victimized by one of these scams. You can file a complaint online at https://reportfraud.ftc.gov/#/
Make sure to include as many details as possible, including the name and contact information of the company involved, what happened, and when it happened.
Talk to a Credit Reporting Lawyer
You also have the option of filing a lawsuit against the company directly. If you win your case, you may be entitled to damages such as lost wages, legal fees, and emotional distress damages. Most of these attorneys will take your case for no money out of your pocket.
To learn more about this option, you should speak with an experienced attorney who specializes in Consumer protection law.
Contact your state Attorney General
You can also file a complaint with your state Attorney General’s office. Many AG offices offer online complaint forms that you can use to file your complaint.
Tips for Avoiding FCRA Violations in the Future
There are certain steps you can take to protect yourself from these types of scams in the future:
1. Check Your Credit Report Regularly
You are entitled to one free credit report from each of the three major credit bureaus every year. Requesting your report regularly will help ensure that any inaccuracies are quickly caught and corrected.
2. Know Who Has Access To Your Information
Be aware of which companies have access to your personal information and make sure that you trust them completely before providing them with any sensitive data.
3. Educate Yourself About Your Rights
It is important to know what rights you have under the FCRA so that you can spot potential violations and take appropriate action if necessary.
Protecting yourself from fraudsters is an important part of being a responsible consumer. By taking steps like these, you can help reduce your risk of becoming a victim of FCRA violations.
Your Rights Under the Fair Credit Reporting Act
The Fair Credit Reporting Act (FCRA) is a federal law that promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies (CRAs).
Understanding your rights under the FCRA is important because it allows you to take steps to improve your credit score and report any inaccuracies. Here’s what you need to know about your rights under the FCRA.
Right to Access Your Report
Under the FCRA, you have the right to request a free copy of your credit report from each of the three major CRAs (Equifax, Experian, and TransUnion) once every 12 months.
You can request your report online, by phone, or via mail.
Keep in mind that you’ll need to provide some basic information, including your name, Social Security number, date of birth, current address, and previous address (if you’ve moved within the last two years). Once you’ve made your request, the CRA will send you a copy of your report within 15 days.
Right to Dispute Inaccuracies on Your Report
If you find inaccurate or incomplete information on your credit report, you have the right to dispute it with the CRA. Under the FCRA, CRAs are required to investigate any items that you dispute.
Once an investigation is complete, the CRA must provide you with written results that include a description of what was found during the investigation. If an error is found, the CRA must correct it and send updates to anyone who received your report in the last six months.
You can also ask them to send notice of the correction to anyone who received your report in the last two years if it was used for employment purposes.
The Fair Credit Reporting Act protects consumers’ credit information and regulates how businesses can use and share this data.
The FCRA gives consumers certain rights when it comes to their credit reports. These rights include the right to access their reports and dispute any inaccuracies that they may find.
Understanding these rights is important because it allows consumers to take steps to improve their credit scores and protect their personal information.