Can You Sue if a Credit Reporting Mistake Ruined Your Credit?

Credit inaccuracies can be very problematic for anyone trying to obtain credit. Your credit score also has an impact on how much you pay for things like auto and homeowner’s insurance. Adding fuel to the fire, once you find mistakes on your credit report, removing them can be a daunting task.

In 2012, the Federal Trade Commission (“FTC”) issued a study showing that one in five consumers had an error that was corrected by a credit reporting agency (“CRA”). These corrections were the result of credit disputes submitted by the consumer.

In 2015, a follow-up study was conducted with 121 consumers who had a unsettled dispute in the earlier 2012 study. Eighty-four of those consumers (nearly 70 percent) continue to believe that at least some of the disputed information was inaccurate. Of those 84 consumers, 38 of those people (45 percent) said they planned to continue their dispute, and 42 (50 percent) planned to abandon their dispute, while four consumers remained undecided.

What if, instead of handling their disputes on their own, those 84 consumers had hired a lawyer to assist them? In addition to providing help with correcting inaccuracies, a lawyer could also help them protect their rights.

The Fair Credit Reporting Act (“FCRA”) is a federal fee-shifting statute. In other words, the FCRA permits a prevailing plaintiff to recover “the costs of the action together with reasonable attorney’s fees as determined by the court.” 15 U.S.C. § 1681o(a)(2), § 1681n(a)(3). Fee-shifting statutes exist because federal regulators cannot possibly take on every individual consumer’s case. By allowing consumers to collect their attorney’s fees from creditors and credit reporting agencies, the FCRA empowers consumers to be private attorneys-general.

If your case is successful, what can you expect to receive? Under the FCRA, you can sue for statutory damages of $100 to $1,000 per violation. You can also claim punitive, actual, and emotional damages. However, the FCRA is a complex statute. As the FTC studies show, disputing inaccuracies on your credit report can be a lengthy and formidable task. It may be worth hiring a lawyer if you have exhausted all other options. Because the FCRA provides for an award of attorney’s fees, many consumer attorneys take on these types of cases on a contingency basis. This puts the majority of the risk on the attorney and allows the consumer to retain counsel without spending large sums of money up front.

Atlas Consumer Law proudly protects the rights of consumers in the Chicago area. To schedule an initial consultation, please contact one of our knowledgeable and experienced lawyers at (312) 313-1613.

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