If you actually have to go to court and sue the credit bureaus or a creditor during a debt validation or credit repair process, you want to do it on the basis of defamation of character or denial of credit. This is a very strong argument based on this court case:
United States Court of Appeals, Fifth Circuit, Case No. 91-7142, John STEVENSON vs. TRW, April 1, 1993.
- Section 1681o authorizes a consumer to recover actual damages sustained from the consumer reporting agency’s negligent violation of a requirement under FCRA.
- Actual damages include humiliation or mental distress, even if the consumer has suffered no out-of-pocket losses.
In this case, Stevenson suffered mental anguish over his lengthy dealings with TRW after he disputed his credit report:
- Stevenson testified that it was a “terrific shock” to him to discover his bad credit rating after maintaining a good credit reputation since 1932.
- Stevenson was denied credit three times during TRW’s reinvestigation: by Bloomingdale’s, by Bank One, and by Gabbert’s Furniture Company. Stevenson testified that he had to go “hat in hand” to the president of Bank One, who was a business associate and friend, to explain his problems with TRW. As a result, he obtained credit at Bank One.
- Stevenson had to explain his credit woes to the president of the First City Bank in Colleyville when he opened an account there. With a new president at First City Bank, Stevenson had to explain his situation again.
- Despite the fact that he was ultimately able to obtain credit, Stevenson testified to experiencing “considerable embarrassment” from having to detail to business associates and creditors his problems with TRW.
- Finally, Stevenson spent a considerable amount of time since he first disputed his credit report trying to resolve his problems with TRW.
The Verdict: The district court awarded John M. Stevenson actual damages of $30,000 for mental anguish, punitive damages of $100,000, and attorney’s fees of $20,700 for TRW Inc.’s negligent and willful violations of the Act. See, you can fight these guys and win!!
How to Prove Defamation of Character
1. Make sure someone other than yourself sees the credit file. Doing this will help you prove your character was harmed. Apply for credit somewhere and get turned down. There have been some cases in which sums awarded to consumers over inaccurate credit reporting were overturned because only the consumer saw his or her own file. This point is CRUCIAL.
2. Document if you were denied employment based on your credit report. This is a powerful weapon and you need to make sure you document what happened.
3. Need we say it? Document everything. Send all letters certified returned receipt. Get copies of their procedural descriptions. Get lenders to send you a letter verifying that the CRA did not contact them.
4. It never hurts to re-dispute your listings twice. If they deny you twice, that’s even more ammunition proving their harmful actions (or inactions) against you.
Please note: WE ARE NOT ATTORNEYS. If you are being sued, it’s always a good idea to hire an attorney or get some legal assistance. If you cannot afford an attorney, a lot of people have handled their cases pro per or without a lawyer. Our articles are meant to provide basic information on handling litigation.