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After Buying Credit Report, Be Sure To Opt Out of Binding Arbitration Clause

February 28th, 2013 · 2 Comments · Credit Reports

Meredith Simonds

by Meredith Simonds

When you write a letter of dispute to a credit bureau requesting validation of a debt that you know is inaccurate, you expect the legally-required investigation to support your claim. Unfortunately, that is not always the case. Evidently, the claims investigation process is often rushed, sometimes resulting in an erroneous listing continuing to be reported as accurate.

Thankfully, if you believe a credit bureau is negligent in the handling of your dispute, you have the legal right to sue them and have your case decided by a jury…but only if you do this:

As reported by CreditCards.com, within 30 to 60 days of your online purchase of a credit report from a credit bureau, you need to send them a letter opting out of the binding arbitration clause in the fine print. If you do not do this, then you are waiving your right to have a case against them decided by a jury, if and when you believe they are negligent in their handling of your claim. (You are also waiving your right to join a class-action lawsuit against them.)

Instead, any objections you have with the credit bureau regarding the handling of the investigation will be handled by a third-party arbitrator. Third-party is not to suggest unbiased, though. The credit bureaus get to choose the arbitration association that will handle the case, from which your arbitrator is appointed.

Now, it may be that you never need to sue a credit bureau for poor handling of a dispute. You may go through the dispute process with ease, every ¬†negative listing removed as requested. But if and when you know you’re right and you know they’re wrong, you’ll find it was well worth the few minutes it took to opt out of the binding arbitration clause.

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2 Comments so far ↓

  • derek

    If you dont purchase your credit report, does this apply? Please clarify for free report requests.

  • Kristy Welsh

    No this does not apply if you get your report for free (through annualcreditreport.com, for instance).

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