Suing for Incorrect Credit Reporting?

Credit reporting agencies have been under a lot of attention recently thanks for Equifax’s data breach but not all of that attention benefits consumers. Representative Loudermilk from Georgia has introduced a new bill in Congress that moves to limit the Fairness in Credit Reporting Act that gives consumers a path forward when credit agencies don’t use sufficient procedures to ensure accuracy.

There are lots of other reporting agencies that employers, landlords, financial institutions that use credit reporting agencies to run background checks before making decisions. When your future is left up to a report from a third-party, you’d hope it would be right. But for many, credit reports can be very inaccurate.

One in five consumers credit reports have errors, according to a 2012 FTC study. And the repercussions can be widespread for those individuals, especially when the mistakes in background checks are related to things that send a red flag to employers, landlords and banks.

Current laws give consumers an ability to sue reporting agencies when results are inaccurate and the agency didn’t take appropriate steps to ensure accuracy. Congress previously decided that consumers whose information is incorrect should be given compensation of up to $1,000 or have the option to sue for actual damages caused by incorrect reporting, often in the form of a class action. This can mean big payouts for consumers who were denied jobs or mortgages because of inaccurate reports. If many consumers decide to pursue a class action together, the class action could easily recover a multi-million dollar compensation for the participants harmed by a credit reporting agency.

But if Rep. Loudermilk has his way, consumers will be forced to give up rights to seek compensation with a severe cap on class action compensation at $500,000. In other words, in cases where the actual damage caused racks up in the millions, all of the participants will split a maximum of half a million to help them rebuild after being harmed by a inaccurate credit report. The proposed bill essentially makes it impossible for consumers to take consumer reporting agencies to court when they’ve hurt consumers.

Public Justice highlighted one such case that would have been impossible thank to the new bill that paid consumers $18 million after a reporting agency incorrectly reported they were criminals. Instead, under the proposed bill, all of the affected consumers would have only been paid $500,000 in total, regardless of how badly the inaccurate reports affected their lives.

If you’ve been victim to incorrect credit reporting information that cost you a job, approval for a loan, or an apartment, our attorneys would like to speak with you about your experience. Pushing back against bills like these that harm consumer protections is part of the process—but bringing these cases to court is also another way to help consumers protect their rights. Call today to speak with one of our experience consumer protection attorneys.

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