Fair Credit Reporting Act Claims – Do I Have To Dispute With Credit Reporting Agencies Before Suing?

Yes – With Some Exceptions

Let’s deal with the exceptions and get those out of the way first.

If debt collector (debt buyer, collection agency, or collection attorney) reports false information on your credit reports, you can sue under the Fair Debt Collection Practices Act (FDCPA) if the collector knew or should have known the information was false. For example, if you have been sued by a debt collector and won your case (that is you do not owe the money claimed by the collector) and after this if the collector reports you owing money, then you can sue under the FDCPA.

If any furnisher of information that goes on your credit reports furnishes false information, you may can sue under state law for invasion of privacy, defamation, etc.

What About A Claim Under The Fair Credit Reporting Act (FCRA)?

But when we talk about the Fair Credit Reporting Act (FCRA), Section 1681s-2 applies. It imposes obligations on the furnishers to provide correct and accurate information to the credit reporting agencies (Equifax, Experian, Trans Union, etc). It also requires the furnisher to conduct a proper and reasonable investigation if the furnisher receives your dispute directly from the credit reporting agency.

So, before any dispute to the credit reporting agency is made the furnisher must furnish truthful information. But there is no “private right of action” that allows you to sue the furnisher. This doesn’t make sense except that the ability to sue a furnisher was a result of give and take in Congress. The bottom line is you must first dispute with the credit reporting agencies before you have the right to sue the furnisher under the FCRA. You can sue the furnisher if it does not correct the false information during its investigation.

We often are approached by potential clients who want to sue (or even have sued) a furnisher for providing false credit information but the potential clients have not disputed through the credit reporting agencies. There simply is no FCRA claim if the dispute has not been made.

Conclusion

If you have false information on your credit reports there is a way to correct it. Dispute through the credit reporting agencies. You can also dispute directly to the furnisher – we often “copy” the furnisher on a dispute letter to the credit bureaus. That is icing on the cake – but you have to dispute through the credit agencies or there is no FCRA claim. You also may have claims against the credit reporting agencies. If you have any questions or want to discuss your situation with us, please feel free to contact us or call us at 205-879-2447 for a free consultation.