We often see creditors and debt collectors furnish inaccurate credit reporting information to credit reporting agencies–even if it is something so simple as the wrong date of default being reported, it may still have negative consequences when you apply for a loan, line of credit, or even for certain professional licenses. DO NOT JUST IGNORE IT–ignoring the inaccuracies means they will be able to continue to mis-report the information, which may eventually hurt you in the future. Taking care of the inaccuracy now will prevent any future harm to you.
Both the Federal and California laws allow a consumer to sue the furnisher of information, and you may be entitled to receive any actual damages suffered from the violation, or up to $1,000 per violation under the Federal laws or up to $5,000 per violation under the California laws, depending on what type of violation we have.
Beware, however, that it is not as easy as you might think to sue the furnisher under Federal laws for inaccurate reportings. One of the ways the U.S. Legislature tried to help protect furnishers of information from frivolous lawsuits is that they passed laws that only allow for civil liability against a furnisher for failing to conduct a reasonable investigation into disputed information after being notified of the consumer lodging a dispute with the credit reporting agencies. You lodging the dispute with the furnisher does NOT trigger their liability. Only if the furnisher receives a notice of dispute from the credit reporting agency does their failure to conduct a reasonable investigation into the dispute trigger liability in a civil lawsuit. If you only send the dispute to the furnisher and you do not dispute the information with the credit reporting agency, then you cannot sue the furnisher under Federal law. See 15 U.S.C. 1681s-2(b).
You also are not able to sue the furnisher under federal laws simply for the inaccurate reportings. If someone is supplying inaccurate information to your credit reports, then 15 U.S.C. 1681s-2(c) and (d) only permit State and Federal officials to enforce the agency’s obligation to supply accurate information. Therefore, you should report any such inaccuracies to the Federal Trade Commission and also lodge a dispute with the credit reporting agency.
On the other hand, however, California laws are more favorable to the consumer. There is no obligation at all for the consumer to lodge a dispute with the credit reporting agency or the furnisher in order to trigger liability in a civil lawsuit for furnishing inaccurate information! See Calif. Civil Code 1785.25(a). However, you could receive punitive damages of up to $5,000 per violation under the California laws if we prove that the inaccurate reporting was done willfully, and willfully means the furnisher either knew or reasonably should have known that the information reported was inaccurate. Therefore, you should send a written dispute to the furnisher every time you see inaccurate information on your credit report in order to trigger the punitive damages clause of up to $5,000 per willful violation.
The lesson here is, if you find inaccurate information on your credit report, you MUST lodge a dispute with the credit reporting agency in order to trigger liability for a civil lawsuit against the furnisher under federal laws, and you should also send a dispute directly to the furnisher to trigger the punitive damages clause under California laws. You should also send a dispute to the Fair Trade Commission so they can also ensure the federal laws requiring accurating reporting are being complied with. Be sure to save copies of all written correspondence and take detailed notes of every event that occurs, so that you can provide us with all the information we need to assert your consumer rights!
