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The 1970 Fair Credit Reporting Act (FCRA) is the rule book of what gets reported. As that rule book, it oversees the personal information collected, maintained, and disclosed. It promotes accuracy, fairness, and privacy of information in CRAs while also taking care of commercial needs for consumer reports.The FCRA is often associated with reports on a consumer’s credit, criminal history, payment patterns, demographics, judgments, and bankruptcies. Third parties and furnishers such as apartments, mortgage lending institutions, and credit card companies can use this information to make decisions on whether or not that person is a credit risk.

Is The Fair Credit Reporting Act Solely Applicable To Credit Reporting Agencies?

The FCRA acts on CRAs by the three major credit reporting agencies:

  • TransUnion
  • Equifax
  • Experian

These three companies monitor what a consumer buys, their banking history, their utility history, whether they pay their mortgage or rent on time, and other informational items.

The FCRA also regulates third parties that request and use consumer reports.

For example, after a prospective employee fills out a job application and authorizes a credit report, TransUnion, Equifax, and/or Experian will report back the person’s credit history, criminal history, rental history, and whether they have bankruptcies and evictions. A credit report can have an impact on a job applicant’s employment prospects.

Cases will often arise from a consumer who has had inaccurate information reported to the CRAs by third parties (employers/creditors/furnishers). But consumers sue the CRA because they’re larger companies or corporations with more funds to satisfy a judgment.

While not an example of inaccurate information being reported, a class action lawsuit was dismissed by three plaintiffs, who had applied for jobs with a major bank, and made the case that the CRA violated federal law in performing background checks. The court found the job applicants knowingly went to the CRA’s website, which disclosed that the applicants were authorizing a background check to be sent to the major bank. This means that consumers do not always win their lawsuits against CRAs.

While there are many consumer lawsuits against CRAs that are settled, having an experienced law firm that specializes in the laws protecting CRAs is our expertise at Citron & Citron.

Who Can Claims Be Brought Against Under The Fair Credit Reporting Act? Who Do You Represent In These Cases?

Of the buyer, creditor, and consumer reporting agencies, we at Citron & Citron represent the CRAs. They are likely targets of consumer complaints because of their larger size.

CRAs tend to not turn on a creditor (furnisher), which are usually smaller companies providing them with credit information on buyers.

Often, the third-party/creditor is an apartment rental company or a mortgage company that pulls the information. If they get the wrong information, there are certain procedures that consumers and CRAs must follow to correct the reporting error. Usually, the CRA is expected to correct the error.

Is It Necessary To Hire an Experienced Attorney For These Cases?

Because CRAs are governed by 15 U.S. Code Section 1681, it’s crucial to have an experienced credit reporting agency defense firm that has intimate knowledge of the statute, and how it’s applied both in state and federal court.

This way agencies are advised on whether the case should be immediately settled or prepared for summary judgment. No matter what charge a consumer makes against the agency, Citron & Citron has the expertise to represent your agency.

Lawsuits Under The Fair Credit Reporting Action Have Surged In The Last Decade

Since 2020, consumer lawsuits against CRAs have increased. The increase in consumer lawsuits is because they find the larger entities can be successfully sued for large payouts.

This is a key example of why it is so critical for CRAs to have an attorney with a clear understanding of the law—and an ability to form innovative defense strategies.

For more information on the Importance of the Fair Credit Reporting Act, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (310) 504-3347 today.

Thomas Citron

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(310) 504-3347