What is the reason you can get punitive damages under the FCRA for false credit reporting?
Why are punitive damages sometimes allowed under the FCRA when you have false credit reporting?
It is because the whole point of the FCRA (Fair Credit Reporting Act) is to make sure you have accurate credit reports and can get errors fixed. If the credit reporting agencies (Equifax, Experian, Trans Union, etc) or the furnishers (whoever furnishes or supplies the information) won’t fix your reports, then they should be sued.
If what they did was reckless or intentional, then they need to be punished with punitive damages.
So what is the first purpose of punitive damages under the FCRA?
First, to punish the defendant for doing bad things. See, if a company could intentionally or recklessly break the law and if it knew it would only have to compensate you, then it may decide it will make more money doing this.
It becomes simple math.
Like the Ford Pinto disaster decades ago where Ford figured out that it was killing and burning people but the costs of “compensating” was less than the cost of making the cars safe.
If punitive damages are allowed, then they punish the wrongdoer. They change the math. They say to the wrongoer, “Calculate this — you are being punished for violating the law so you will never do this again.”
Same as in a crime. We don’t say to bank robbers, “Ha! We caught you. Now put the money back in the bank and go home free.”
We punish them.
So if a company intentionally or recklessly violates the FCRA, then it must compensate you and it should at least face the possibility of being punished.
For example, we had a case where the bad guys were found to have done $100,000 in compensatory damages to our client and then the jury awarded $300,000 in punitive damages. That changes the spreadsheets in the meetings where they talk about whether they should violate the law or not. 🙂
So what is the second purpose of punitive damages under the FCRA?
Second, to discourage other similar companies for doing similar bad things.
When other companies see a bad company get nailed with punitive damages, it makes them take note.
“Could this happen to us?”
“We are doing the same type of conduct — should we change?”
Yes you should.
Unless you want to get hit with punitive damages also.
Punitive damages send a message to the company that did the bad act and to other similar companies to not do this again.
Think about crime — when someone who is thinking of committing a crime considers the punishment they will face, sometimes this deters them from committing the crime.
That’s what we are looking for in the abusive area of false credit reporting. Get everyone to play fair. To fix credit report errors and to prevent them in the first place.
When can I get punitive damages under the FCRA?
It is a hard standard to meet but when you can show that the company you are suing intentionally violated the FCRA, then you should be able to ask for punitive damages.
Also when a company has been reckless, that’s considered the same as intentional.
Let me give you an illustration.
If I drive and am careless and I hit someone with my car, that’s negligence.
But if I purposely close my eyes and accelerate, that’s intentional or reckless. If I get drunk and hit someone, that’s the same thing.
Understand the company you sue will always say, “Well we didn’t say ‘let’s violate the FCRA'” but that’s not the standard. We look at their actions to see if this was intentional or reckless.
Should I still sue even if I can’t get punitive damages under the FCRA?
You can still get compensatory damages to compensate you for your losses (including mental anguish).
You have the opportunity to receive your attorney fees — from the bad guy you sue. Nice poetic justice, eh?
The company you sue can be forced to pay your lawsuit expenses and costs.
And suing is the best way to get your credit report fixed….
What should I do if I have questions about suing under the FCRA?
If you live in Alabama, give us a call at 205-879-2447 and we’ll be happy to help you. We’ll first listen to you to understand what the issue or problem is and we’ll look at your documents (credit reports, etc).
Then we’ll lay out your options for you and give you the good and bad of each option.
Then you decide what’s best for you.
We do our meetings by phone, by video chat, or in person. So where-ever you live in Alabama, we can help you and it will be convenient for you.
Thanks for reading this and let us know if we can help you.