Can You Sue For Incorrect Credit Reporting?

What Can I Do?

You absolutely have the right to raise disputes for what you believe are errors on your credit report. As soon as a dispute is raised, the credit reference agency must begin an investigation into what you have raised or remove the error. If the credit reference agency does not remove what you have claimed to be inaccurate, they still have to get in contact with you. There are times where they may communicate that the creditor who has made the error has defended their position and stands that their report is correct. If this happens, you have to take further action. You can try:
  • Getting in contact with the creditor
  • Raising a second dispute with the reference agency with extra information
  • Raise a complaint about the reference agency to a Government body
  • Raise a complaint about the creditor to a Government body
  • Lodge a complaint to the State’s consumer protection
  • Speak with your senator
  • Sue the reference agency
  • Sue the creditor
If your credit reference agency does not change your report and you’re convinced that the information on your report is incorrect, you will have to ramp up the action.

Getting In Contact With The Creditor

Finding contact details of a creditor can be tricky, especially if the creditor has been purchased by somebody else or ceases to exist. However, most details of the creditor should remain online somewhere – if not, try and ask the credit reference agency if they have any details about the financial institution. It’s best to start with a telephone call, but sometimes it’s not that simple. It’s always a good idea however, to write a letter or email – either initially or as a follow-up. The best thing about written communication is that you can provide evidence with date and time stamps to a court. Emails can often indicate if the person you have contacted has refused to respond too. You should send a copy of the letter to the credit reference agency – and if you’re sending an email, it’s a good idea to CC in the credit reference agency. This is even better for evidence, as a secondary party should be able to confirm your history of contact. If you have contacted the creditor before, they do not necessarily have to respond to the same raised dispute. However, if you provide more information or evidence to your dispute – you could get through to a more senior staff member like the CEO or COO and potentially can rectify the situation. If though, the creditor refuses to respond or help you with your dispute – you can raise this with your credit reference agency. They tend to have their own departments that deal with these disputes directly. Depending on which agency or agencies have the error reported on your credit report, you’ll have to contact all of them directly.

Raise Another Dispute With The Credit Reference Agency

Raising another dispute to the reference agency will only be worth it if you have further information to supply. If you simply file another dispute without any further evidence or information, the reference agency will likely do nothing.

Complaining About The Credit Reference Agency

You may wish to escalate your complaint – which you can do by contacting the CFPB (Consumer Financial Protection Bureau). They will either work on your behalf to get something from the reference agency or they will move your complaint on to a different Government body which is more suited to the nature of your complaint. Either way – you’re moving forward.

Complaining About The Creditor

Complaining About The CreditorIf your creditor still refuses to rectify the error or does not respond to any of your correspondence, you can file a complaint with the FTC (Federal Trade Commission). You could also file a complaint with the financial institution’s regulator, if they have one. You’re better off starting with the FTC as they can assist you in your search for a resolution by guiding you to the right people to contact.

Contacting The State Consumer Protection Agency

Laws alter from State to State, so it’s always worth raising a complaint with the agency, as there might be a specific law regarding or in relation with credit reference agencies and creditors.

Speaking With The Senator

Speaking With The SenatorSenators help to draft legislation and should know all the ins and outs about the laws and regulations. At the very least, they can help investigate or contact the relevant people on your behalf.

Adding A Statement To Your Report

It is your right to add a statement to your report. You can try and explain your situation and dispute in much further detail, but try to keep it brief and to the point. If after all this, you still have no luck with progressing your dispute, then you should try legal proceedings.

Sue The Credit Reference Agency, Creditor Or Both

The Fair Credit Reporting Act says that you have the right to sue a credit reference agency if they have made negligent or willful noncompliance of the law (within 24 months) after you notice the error, or up to five years after the harmful behavior begins. You have grounds to sue if due to their error in reporting and their negligent failure to rectify the error, you have had inaccurate information passed on to further potential lenders and have either been refused credit or charged increased interest as a result of the false information. It’s not as simple to sue a creditor as it is to sue a reference agency, due to several ways a creditor can avoid liability – which the Fair Credit Reporting Act helps them do. However, it doesn’t mean they will always win the case.

What To Know

Yes, you can sue for incorrect credit reporting but it’s worth taking less serious action first. If you cannot solve the problem through all the previous avenues, consider contacting an experienced lawyer who can help with your case.