Remedies for FCRA Violations

Under the Fair Credit Reporting Act (FCRA) (15 U.S.C. §§ 1681 and following), you have a right to the fair and accurate reporting of your credit information. You're also entitled to certain privacy rights concerning your credit information and protection from the misuse of your credit data.

If someone or a company, such as a credit reporting agency, violates your rights under the FCRA, you have remedies available. Those remedies might include:

• actual damages
• punitive damages
• attorneys' fees, and
• costs.

The type of remedy will depend on whether the violation was intentional or negligent.

What Is the Fair Credit Reporting Act?

The FCRA governs the behavior of consumer reporting agencies (also called "credit bureaus" or "credit reporting agencies") and the businesses or individuals that report information to the consumer reporting agencies. The credit bureaus compile this information into your credit reports.

Creditors, landlords, and employers may rely on information in your credit reports when making decisions to extend credit to you, give you a job, or rent a home or apartment to you.

What Is the Purpose of the FCRA?

The FCRA provides rules about who can access your report, what can be reported and for how long, and what credit reporting agencies and information suppliers (also called "furnishers") must do if you dispute information. If a credit reporting agency or another entity violates the FCRA, you might suffer harm.

For example, inaccurate information in your report could lead a creditor to deny you a car loan or credit card, an employer to refuse to hire you, or a landlord to decide not to rent to you. You could suffer other harm as well.

What Is a Violation of the Fair Credit Reporting Act?

Fair Credit Reporting Act violations are common. Credit reporting agencies are obligated to ensure the credit reports they prepare are accurate. (15 U.S.C. § 1681e(b) (2024).) They have to follow reasonable procedures to verify the accuracy of the data they collect and disclose. If they report inaccurate or old (outdated) information, such as incorrect account statuses (for example, reporting an account as delinquent if it isn't), unpaid balances that were settled, or information that belongs to another person because of a mix-up of records, they can be held accountable.

Another frequent FCRA violation is the failure of furnishers of information, like lenders and debt collectors, as well as credit reporting agencies, to investigate disputes after consumers initiate them. (15 U.S.C. § 1681s-2, 15 U.S.C. § 1681i (2024).) When a consumer identifies incorrect information in their credit report and disputes it, furnishers are required to promptly investigate and update the information if it was indeed incorrect. If the furnisher (or credit reporting agency) fails to do so, that's an FCRA violation.

Also, an employer might violate the FCRA when conducting a background check during the hiring process. The FCRA requires employers to get written consent from applicants or employees before accessing their credit reports. They also must notify the individual if they intend to take any adverse action based on the report, such as not hiring the person or terminating their employment. If an employer didn't get proper consent or provide the required notice, that's a violation of the FCRA. (15 U.S.C. § 1681a(h) and (y)(2), 15 U.S.C. § 1681b(a)(3)(B) and (b)(2) (2024).) The FCRA strictly limits who can access your credit reports and under what circumstances.

Other common violations of the FCRA include privacy violations and not providing certain required FCRA notices.

What Happens If the FCRA Is Violated?

If an FCRA violation happens, you can sue in court.

FCRA Violation Penalties

Here are the remedies that are available for FCRA violations.

What Are the Damages for a Willful Violation of the FCRA?

If you can show that the credit reporting agency, information furnisher, or entity using the information willfully violated its obligations under the FCRA, then you may be entitled to recover up to all of the following damages:

• basic damages: your actual, provable damages (no limit) or statutory damages between $100 and $1,000 (to get these, you don't have to prove that the violation harmed you)
• if the violator was an individual who lied to get your credit report or used it for an improper purpose, then the greater of your actual, provable damages (no limit) or $1,000 flat
• punitive damages, as decided by the court, and
• attorneys' fees and costs. (15 U.S.C. § 1681n (2024).)

A "willful" violation doesn't just mean that you have to prove that the credit reporting agency or other entity actually knew that it violated your rights. Rather, it's enough to prove that it was acting recklessly—that is, the credit reporting agency or other entity knew or should have known that it was running afoul of the FCRA.

What Are the Damages for a Negligent Violation of the FCRA?

You are also entitled to damages if you can show that the credit reporting agency or other entity negligently failed to comply with its obligations under the FCRA. Damages here include:

• actual damages (no set limit or minimum), and
• attorneys' fees and costs. (15 U.S.C. § 1681o (2024).)

Beware: Penalty for a Frivolous FCRA Lawsuit

The FCRA has a penalty for filing any lawsuit or subsequent court documents that are later determined to have been filed in "bad faith or for purposes of harassment." You (or the defendant) might have to pay the other side's attorney fees if you (or they) file bad faith papers and lose. (15 U.S.C. § 1681n, 15 U.S.C. § 1681o (2024).)

How Can I Sue for FCRA Violations?

You can file a complaint in either federal court or your state's court, subject to a time limit, called a "statute of limitations."

What Is the Statute of Limitations on a FCRA Claim?

Your suit must be filed no later than the sooner of:

• two years after the date you discovered the violation, or
• five years after the date of the violation. (15 U.S.C. § 1681p (2024).)

Report FCRA Violations

To report FCRA violations, you can file a complaint with the Consumer Financial Protection Bureau.

Talk to a Lawyer About FCRA Violations

To learn more about filing a lawsuit for FCRA violations, talk to a consumer protection lawyer or debt settlement lawyer.