What is the Fair Credit Reporting Act (FCRA)?
The Fair Credit Reporting Act is a federal statute passed in 1970. The
statute drafts out the the basic credit reporting rights of all consumers.
In specific, FCRA is designed to protect consumers in regards to their
privacy, fair treatment and accuracy of their credit files with consumer
reporting agencies (CRA) including Credit Bureaus, and specialty reporting
agencies such as employment history, check screening, medical records
and payday lending agencies.
Information reported by creditor, debt collectors, and the credit bureaus
(Experian, Equifax, and Transunion) must all conform to the Fair Credit
Reporting Act or the could be held liable for damages.
What Are My Rights Under FCRA?
Under the FCRA you have basic rights concerning any information consumer
reporting agencies have collected on you. Some of the major rights under
the FCRA include:
If at any time information about you has been used against you by a third
party that 3rd party must provide you with the information (Name of CRA,
phone #, address,etc) of the CRA they received your consumer information
from. Eg. if you are applying for a mortgage and the bank rejects your
loan after seeing your credit score they must provide you with the necessary
contact information of the credit reporting agency that they used.
You have the right to know what information (including your credit score)
is in your file with any CRA. if at any time you are interested to know
what information a CRA has on you may request a file disclosure with that
agency. Most of the time the CRA will charge you a standard fee, however,
in some situations it will be free (in cases such as identity theft, to
dispute inaccuracies or if any information has been used against as exemplified
above). In addition with the case of credit reporting agencies you can
request your credit report for free once a year.
If you have requested your file and find inaccuracies you can file a dispute
with that CRA. If you file a dispute the CRA the agency MUST investigate
your claims. Any discrepancies they confirm MUST be removed or appropriately
adjusted within 30 days.
In addition to false information in your file, CRAs MUST remove any outdated
negative information about you. That means after 7 years any adverse information
such as failed child support payments, delinquent accounts, or filed lawsuits/judgements
MUST be removed from your file. The one exception is bankruptcy which
will stay on your record for 10 years before it can be removed.
Any employer MUST seek out your expressed written consent before they can
access your records from a CRA.
If your rights have been violated you may be able to seek out damages from
the infringing party.
Recent Developments with the Fair Credit Reporting Act
In the past two years there has been a huge increasing trend of class action
lawsuits involving FCRA violations. This trend is in direct correlation
to widespread implication of online job applications by many companies.
When the FCRA passed it had a clause in it that stated that in order for
an employers must get the expressed written consent of their applicants
in order to seek out CRA reports on said applicants. This provision requires
that employers seeking consumer reports on potential employees first have
these applicants fill out a separate form for a background check. In the
recent years many corporations have been transitioning to the use of online
job application processes. Many of these online job applications lump
in the background check instead of following the law of providing separate
forms leading companies violating the rights of thousands of applicants
in the process. While this business practice has been going on for years
it went largely unnoticed until 2014. Since this practice was brought
to light hundreds of class action lawsuits have been brought up against
some of the largest corporations in the country (including Whole Foods
and Century 21). In the case of each violation each violated party received
$1000 in statutory damages, some receiving additional punitive damages
on top of that.
Recent FCRA Cases
in 2014 in the case of The UNITED STATES OF AMERICA v. TELECHECK SERVICES
the Federal Trade Commision levied $3.5 million in penalties against TeleCheck
Services for violations of FCRA. TeleCheck is a CRA that deals with check
authorizations allowing companies to look in to consumer histories to
see if they have a history of bouncing checks. Under the FCRA consumers
have the power to dispute the information on their file and have the CRA
investigate those claims. Telecheck was found to be rejecting disputes
and refusing to investigate. In addition to this Telecheck was also found
to ignoring proper procedure in what cases the did elect to investigate.
The $3.5 million in penalties brought up against Telecheck was the 2nd
largest FCRA settlement the FTC has ever brought up in a FCRA case.
Earlier this month in the case of FRANCESCA FORD, ISABEL RODRIGUEZ v CEC
ENTERTAINMENT, INC. D/B/A CHUCK E. CHEESE’S a $1.75 million class
action lawsuit was granted by a California district court. In the case
Chuck E Cheese’s failed to provide job applicants with separate
background check disclosure forms violating the rights of over 28,000
people’s FCRA rights. In addition 400 applicants had adverse action
taken against them as a result of the illegal background check. The case
have its final approval hearing this coming December.
A similar case to the class action lawsuit above is Fernandez v. Home Depot
USA, Inc. In this case Home Depot failed to provide over 120,000 applicants
proper background check forms. For violating the FCRA requirements for
background check disclosure forms Home Depot was hit with $1.8 million
in damages. Since this ruling came down this past April, Home Depot has
apparently failed to learn from their mistakes as they have already found
themselves in yet another lawsuit for FCRA violations.
Credit Lawyer in New York City
If you have information on your credit report that you believe to be erroneous,
contact our knowledgable
credit lawyers. Our New York City law offices provide assistance across New York with
fixing credit, credit correction, credit repair, and credit rehabilitation.
Contact us for a free evaluation by calling, or fill out the form below.