What is the reason you can get punitive damages under the FCRA for false credit reporting?

Punishment and deterrence are the twin goals of punitive damages

Punishment and deterrence are the twin goals of punitive damages

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.

(You are also welcome to fill out our contact form here and describe your problem to us — we’ll get back with you by phone or email.)

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.

John Watts



  1. Steve Campbell says:

    Relief in FCRA suit:
    Should I state an amount that I am asking for in damages?
    Should I like say asked for $10,000 or $12,000 or should I just let the court decide how much?

    • John Watts says:


      It depends on where you are suing them and what you are suing them for.

      We typically don’t put an amount but sometimes we do.

      Just keep in mind that in some courts you are limited to whatever you ask — so when we ask, we ask for a large amount.

      I do suggest you get with an experienced FCRA lawyer in your state to see if it would be better to have a lawyer represent you. Normally the attorney fees are paid by the other side so it doesn’t cost you anything.

      And, as an example, we have had folks come to us with what they thought was a few thousand dollar FCRA case and we settle it for six figures. So it will be worth your time to have a lawyer who knows the FCRA check this out for you.

      Sometimes it makes sense to file on your own if a very small case but if it will end up in federal court (almost all do) then it can be very hard to handle the case on your own. Lots of lawyers are scared of federal court due to the complications and the sometimes pretty harsh rules.

      Best wishes whichever way you go!

      John Watts

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