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Calculating FCRA Violations and Damages


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Hi,

 

I have been disputing multiple erroneous items with two of the CRA's for quite some time. The really bad actor of the bunch is Experian, who refuses to correct what are true errors and were properly disputed by me, with proof of the facts and the dispute letters saved in my files. I'm at the point of preparing either a lawsuit, or I may invoke arbitration using an online agreement from one of their websites.  

 

My next step is either an Intent to Sue letter, or Arbitration demand. I'd like to form a basic valuation of damages at this point, and know that the general statutory penalty for violating the FCRA is $1000 per violation. However, I am uncertain how to approach potential punitive damages. For example, a CRA refuses to investigate or remove a blatant error on a consumer credit report. Consumer then applies for credit and it denied, with the denial attributable to the error. Will the credit denial have a separate value (other than statutory) when calculating damages?

 

Thank you.

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Hi BV80,

 

Here are a couple of Experian examples:

 

1) Posting the same alleged negative account as two separate accounts, with two separate account numbers, more than doubling the amount of debt on my credit report. 

 

2) Posting a updated listing of an alleged negative account by a bank that was dissolved 4 years ago and no longer exists. When I sent them proof from a U.S, federal bank regulatory agency the bank was dissolved and therefore could not be reporting or verifying anything today, they sent me a reply by mail that said "sorry, we cannot use the documentation you sent to us."

 

Follow up dispute letters were treated as frivolous requests, and a request for their Method of Verification was ignored. I know a court can ultimately award statutory and punitive damages. What I'm trying to determine for a demand letter, is how to value my damages presently and within reason. An amazing disparity exists between my credit bureau reports of 200 points, and I was denied several credit cards after Experian hard credit pulls.

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1) Posting the same alleged negative account as two separate accounts, with two separate account numbers, more than doubling the amount of debt on my credit report.

 

Who was reporting each of the accounts.  An OC and a CA/JDB can report the same account, but it will show up twice.

 

 

 

2) Posting a updated listing of an alleged negative account by a bank that was dissolved 4 years ago and no longer exists. When I sent them proof from a U.S, federal bank regulatory agency the bank was dissolved and therefore could not be reporting or verifying anything today, they sent me a reply by mail that said "sorry, we cannot use the documentation you sent to us."

 

 

Who was reporting this account.  Was it the bank that was dissolved, or was another business entity reporting the account?

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Who was reporting each of the accounts.  An OC and a CA/JDB can report the same account, but it will show up twice.

 

The alleged OC shows twice, no CA/JDB.

 

 

Who was reporting this account.  Was it the bank that was dissolved, or was another business entity reporting the account?

They claim the bank that was dissolved 4 years ago is reporting the account today.

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Wow.  I see what you mean.  How can a bank that doesn't exist anymore verify an entry?  Go figure.

 

Here's a couple of cases for you to read.  One is from a FL federal court.  The other is from the 11th Circuit Court of Appeals.  In both cases, the consumers lost, but they will give you an idea of what the courts require.

 

http://scholar.google.com/scholar_case?case=5961427503685780747&q=Ransom+v.+EQUIFAX+INCORPORATED&hl=en&as_sdt=4,121,325,326,327

http://scholar.google.com/scholar_case?case=14789129985365586691&q=Bermudez+v.+EQUIFAX+INFORMATION+SERVICES,+LLC.,+&hl=en&as_sdt=4,10,109,110,121,124,125,325,326,327

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Thanks BV80. The cases are very interesting. The lengths that people have to go to in federal court to fight the CRA's, when its an obvious violation of the FCRA, are amazing. It's why I'm considering invoking arbitration per the online agreement I have with each of the credit bureaus. While I know that process has limitations, I think it may bring a result quicker and with less aggravation.

 

So how would you value the violations I mentioned? I'm at $1,000 for the erroneous posting and refusal to investigate, $1000 for failure to advise me of their method of verification, and $1000 for each denial of credit. I'm sure I'm missing more, but that's what I have for now.

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You need to review the statute and see if violations can be stacked. Some of these laws allow you a flat one time fine of up to $1,000.00 no matter how many violations the perp committed. Two different perps, however, two different cases, you may be able to double up. See if any state trade practice laws appply, too. Ruining somebody's credit score is worth some money. Also, usually you can bring these cases in state court. They can be removed to Federal court, but usually they won't bother paying the fee if they see you have a good case.

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So far I haven't anything regarding the stacking of damages.  However, I have found some case law you might need to get you started.  You need to show that you have a private right of action to sue the CRA.

 

First, here's the law regarding a CRA's duty:

 

15 USC § 1681e(B).

Accuracy of Report.  Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.

 

Now, the case law for a private right of action:

 

Individuals also may sue for damages. A credit agency that willfully fails to comply with its FCRA obligations "is liable" to an individual for his or her actual damages, costs and reasonable attorney's fees as well as such punitive damages as a court will allow. Id. at § 1681n; see Hovater v. Equifax, Inc., 823 F.2d 413, 417 (11th Cir.), cert. denied, 484 U.S. 977, 108 S.Ct. 490, 98 L.Ed.2d 488 (1987).

 

The FCRA grants district courts jurisdiction to "enforce" these "liabilities". Mangio v. Equifax, Inc., 887 F.Supp. 283, 284 (S.D.Fla.1995).

 

BUT, in order to receive punitive damages, you have to show that the CRA's violations were willful. (§ 1681n). 

 

If the court rules that the CRA was merely negligent (§ 1681o), there's no punitive damages.

 

A credit agency that is merely negligent "is liable" for the same amounts, except that it is not subject to punitive damages. 15 U.S.C. § 1681o. Mangio v. Equifax, Inc., 887 F.Supp. 283, 284 (S.D.Fla.1995).

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Great feedback Bruno and BV80, thanks! Your case law references are awesome as always BV80. Bruno, thanks for reminding me of state law violations. I'm checking on those now. One issue that has me leaning towards an arbitration demand is its private, and putting my credit report in a public record is not something that thrills me (even a redacted one). Any thoughts on how to properly protect my privacy on this matter, and still pursue justice in a court of law?

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There's such a thing as a "motion to seal".  If and how it would apply, I don't know. 

 

Considering a credit report can only be viewed by certain people/entities who have a permissible purpose, perhaps you could that as a reason.  You don't want people viewing your CR who have no right to do so.

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