Fair Credit Reporting Act: Regulators Argue There is No “Legally Accurate” Exception to the Right to Accurate Information in Consumer Credit Reports

Fair Credit Reporting Act: Regulators Argue There is No "Legally Accurate" Exception to the Right to Accurate Information in Consumer Credit Reports

Under the federal Fair Credit Reporting Act (“FCRA”) and under California State law, credit reporting companies have duties and obligations to report only accurate information in a consumer’s credit report. Similar obligations and duties are imposed upon companies and businesses that provide or furnish information to the credit reporting agencies. These types of companies and businesses are generally called “furnishers.”

Credit reports are not just about loans and credit, but are often used as part of apartment rental applications and for hiring decisions. Thus, even small and “minor” inaccuracies in a consumer’s credit report can lead to the denial of credit, housing and/or a job. Because of this, Congress enacted the FCRA and the California State Assembly enacted similar statutes under California State law.

The duty to report accurate information starts when the furnisher provides information to the credit bureaus. Furnishers have a legal duty to report credit history information accurately and the credit bureaus have duties to report that information accurately when they compile a consumer’s credit report. This includes rankings, codes and scoring. These duties to provide accurate information is enhanced significantly when a consumer disputes credit information on their report. When the accuracy of credit information is disputed, both furnishers and credit reporting bureaus must conduct a meaningful investigation. If the information is shown to be false, inaccurate or misleading, the information must be deleted or corrected. Failure to correct false, inaccurate or misleading credit information will make the furnishers and/or the credit reporting bureaus legally liable for money damages. If you think you have been the victim of FCRA inaccurate credit reporting, call us here at Guardian Litigation Group at (949) 444-5474. We are experienced Credit Reporting Abuse Lawyers and have helped hundreds of clients recover compensation for false credit reports. You do not have to be a victim; contact us.

We, here at Guardian Litigation Group, have noticed that, recently, lawyers for credit reporting agencies and furnishers are trying to get away with credit reporting abuse by arguing that there is a “legally accurate” exception to the FCRA. This is where the credit reporting agencies and furnishers argue that “there is a legal dispute between the creditor and the consumer. Thus, we cannot determine if the information is accurate or not. So, we are not liable.” Our position, here at Guardian Litigation Group, is that this argument is nonsense. There is no such exception in the language of the FCRA or in the California statutes.

In good news for consumers, federal regulators are in agreement. For example, as reported here in a press release, the federal Consumer Financial Protection Bureau and the Federal Trade Commission have recently filed pleadings in federal FCRA litigation taking the position that there is no distinction under the FCRA between “factual” and “legal” accuracy. The two regulators argue that credit reporting agencies and furnishers are trying to create a giant “loophole” in the FCRA by using this nonsensical distinction. As noted in the press release, “… [i]n practice, almost any type of inaccuracy could conceivably be characterized as a “legal” issue.” For example, a dispute about whether a consumer actually owes money listed on a credit report could conceivably be considered a “legal” question (as opposed to a “factual” question). Hopefully, the federal court will see reason and close this loophole that threatens to swallow consumer rights that were intended to be protected by the FCRA.

Contact Our Experienced California FCRA Attorneys

For more information, contact the FCRA lawyers at Guardian Litigation Group. We have the tools and legal experience necessary to protect you, vindicate your rights and, potentially, to recover money damages on your behalf. We are your California Fair Credit Reporting Law Firm. Our Mission is to provide unparalleled legal services and support to consumers and financially distressed individuals. We can be reached via our contact page or by phone at (949) 444-5474. We are located in Irvine, California.