Ok, we talk all the time about sueing for FCRA and FDCPA violations. In fact, at the mere mention of a possible violation some of us seem to start foaming at the mouth and shouting "SUE!" Well, before a case can be successful (unless you get lucky), you have to have provable violations. Then, depending on those violations, you must determine the damages, if any. A lot of what you can call damages will tend to hinge on whether the violation was willful or just negligent. SO, I'd like to bring together as much material as possible to classify actual illegal behavior of CRA's and CA's into what the courts have called negligence vs willful. I am interested in opinions as well, especially legal ones, but mostly just want to see case law. I am NOT a legal researcher, but will do my best to offer up what I find. I would very much like it if others would do the same. Sure, I started out just wanting to clean up my credit so I could buy a house, but now I'm hooked on creditnet. I'd like to nail the CRA's and a few CA's as well, and want others to do so also. As the FTC has opined, civil action by injured parties will serve to help enforce the regulations. (Sorry about the title, I just couldn't think of anything )
I like your idea, but here's my dilemma: I know that having provable damages make for a good case, but what do you do in a situation where you KNOW that a CA's or CRA's error (intentional or unintentional) will cause you a denial or some other adverse action? Do you apply anyway? Common sense says no. I think a judge would say so too. Not trying to play the devil's advocate, but I want to cover ALL bases. That's like taking driving a vehicle you know is defective, anticipating that you will have an accident, thus having damages to sue the manufacturer for, instead of keeping your *arse* (I think that word is cute, btw) out of it, until it gets fixed. Nevertheless, I would sue the manufacturer for fixing the vehicle if they will not.
ALong the same lines as Love, how do you pinpoint that one specific creditor is the cause for your damages. Let's say you have 5 negative items on your report. All of them are reporting negatively albeit correctly except the one you are suing. How do you point at that one creditor and say "because of your incorrect reporting my score on EX is 625; thus, I was not approved for whatever." That creditor is just one of five negatives. Aren't they all contributing to that score?
I'm right there with you Love. LisaMC, that's another reason the willful vs negligent issue is so important. In the FCRA, and possibly to a lesser degree the FDCPA, there are statuitory minimum damages awardable when no actual damages are in evidence.
Okay Jambe, come down here with me. Way way down to novice legal land.... As I understand it, if a violation is deemed "willful" there is a minimum floor set for damages of $1000 per violation or the amount of actual damages if it is more than $1000. If a violation is deemed "negligent", there is no $1000 floor. In this case you would have to show actual damages and assign a number to them, right? I would assume that "negligent" violations are proven much less than willful. Do you agree? Is this the reason why we see the $1k figure per violation thrown around so frequently? i.e. because it is a pre-set amount, a slam dunk, a no need to look any further amount intended to compensate you for your unquantifiable damages? Just trying to make sure that I understand this 100%.....Let's assume that a violation is deemed "willful". If it is not possible to prove that a specific violation was the cause of my failure to get financing for example, I can sue for the $1,000 minimum and not sustain any actual damages. THanks in advance for letting me ask questions that may be obvious to everyone else!
Love, that has always been my stance. I do not apply unless I am fairly certain that I meet the criteria. It seems crazy to me to apply knowing that you will be denied. Again, if we are trying to establish "negligence" in the violation, I think you have to go through that exercise. Right, Jambe? In that situation you would want to be able to quantify that you experienced real, justifiable damages that equallled X. As I understand it, you would only go through the process of applying and being turned down if you are attempting to prove that the creditor was negligent and that it cost you some ungodly amount of money (in excess of $1,000 for sure) because of it. If you are ascertaining that the violation was only willful in nature, you would have no need to do it (assuming you are satisfied with the $1,000 per violation). Someone critique my logic. I think I am starting to truly understand these statutes and their ramifications as I write this.
I am just as much a novice, if not more so. Depends on the violation and the code title. For most FCRA violations the minimum is $100. There is no stated minimum in the FDCPA. Correct, at least as I understand it, and applicable only to the FCRA. For the FDCPA you would have to show damages either way, or push the notion that this particular CA has a history of willful noncompliance and hope the judge buys it. Not sure what you mean. I can imagine that a CA or CRA that KNEW they were in violation would want it deemed negligent over willful and would make every effort to present it thusly when they realized they were going to lose. Probably. Mostly though it's just a misconception I think. In the case of a report pulled with no permissable purpose, then the minimum award should be $1,000 plus any court costs and attorney fees. If it was an illegal inquiry, then yes. In all other cases of FCRA violations, change that figure to $100. For FDCPA I am of the opinion that you need actual damages. (I had been thinking the opposite until today, that the FDCPA gave more room for penalties.)
If there is only one derogitory item, and it is there because of willfully non-compliance, a person could lose thousands of dollars in higher interest and upfront loan charges on a house or car loan. I don't buy the idea that being denied for a $2,500 credit card equates to $2,500 in damages though. You haven't lost any money directly as a result of being denied. Now, if you needed a loan and the denial resulted in consequential damages, there is real cause for suit. Ideally, no one wants to actually HAVE damages before they get things corrected. Well, some people (lawyers I can imagine) probably would like to see the damages happen.
I have an answer to the question if you have more than one negative on your report. Just ONE derogatory drops your score 29 points. And if you monitor your reports like most people here do, you can show that before that particular listing showed on your report that your score was 605 and now with it on it's 576 or whatever. And something I forgot to post yesterday is this: I spoke to a representative at Equifax yesterday and she broke the inquiry points(how many they ADD to your score) down for me. This is what she said: 0 inquiries = 75 points 1 inquiry = 55 points(she actually said "your score drops 20 points", which you could use in a court of law to say that the one inquiry COST you 20 points) 2 or more inquiries = 40 points I hope that this helps someone. I know it helped me!
If it is correct, why would you be suing? The problem is incorrect information and which one you can prove to be right? Not reporting the correct information causes consumers to pay more for credit. For instance, RMA duplicates a collection account, so they show 2 collection accounts. This kills your score and makes you look like you have 2 collection accounts with them. You dispute, they verify. Then, when you pay, they update one of the duplications and leave the other alone so that it looks like you have two collections with them and one is paid. Still kills your score. Then 2 and 3 months after paying them off, they make two hard inquiries into your credit report-nonpermissable and willfull noncompliance! This kills your score. One gets turned down for 0% financing thru GMAC on a $28,000 vehicle. Then gets a loan thru GMAC for $26,000 at 2.9% apr foregoing the $2,500 rebate. For scenario two, In my opinion one's actual damages would be: $2,500 foregone rebate 150.00 more in taxes $1,977.07 in finance charges That's $4,627.07 total actual increased cost of credit due to incorrect information contained in my credit report. Then there's the offer that Chrysler made me at 12.99% apr on $26,000 with $5,000 down. I don't even want to do the calculation on this one. Makes me sad. I really wanted that Towne and Country. Maybe I'm going out on a limb and this is completely not backed up by any research done by me, but it would seem that it is within the CRA's best interest to keep the subprime market going. They have more businesses utilizing their services, thus they make more money. Has anyone ever completed an analysis on say Equifax and how many affiliates, sister companies, parent companies, subsidiaries.... They own collection companies. Why not subprime lending insitutions. Maybe they are affiliated with some of those predatory lenders out there. Wouldn't suprise me. Man this was long. Sorry. Sirrowan
Here is maybe a good example of a violation of the FDCPA that has no actual damages: My landlord wants me out of the house we are living in. In an effort to expidite this (I guess, LoL), they contacted an attorney debt collector demanding the rent (only ten days late at that point) along with $250 in attorney fees. Well, up front there is nothing that allows for the attorney fees, so definite violation. But hey, I'm no idiot and I aint payin no stinkin attorney fees, so I haven't got any damages. Had I payed and then sued, I suspect I could get the $250 back, and my lawyer would manage to get richer off the deal. By and large, the only winner, monetarily, in FCRA and FDCPA suits is the lawyers. The winning lawyers get their fees covered, and if the CRA or CA is the loser, their attorneys get paid too. You will probably get your derogs cleaned or removed, or a debt relieved, but nothing in your pocket for the trouble. Of course, that's just my very limitted take on the situation...
Sirrowan, nothing like as long as mine! Your take on damages seems spot-on to me. I think it's tough to show that a certain incorrect derogitory listing is the one causing you trouble if you have multiple correct listings that are bad. Luckily, almost all CRA listings are incorrect in some minor way. Hell, they can't even keep my DOB straight for longer than a month!
Jambe, thanks! I really learned something today! It really makes me nervous when I try to rely on something that I thought was law and later turned out to be a misconception. In the case of a willful violation that states a minimum of $100 and a maximum of $1000, how do you decide what to sue for? Is this where most people assume the high end and go for $1,000? Can the judge deem that the award should only be $200 instead of the $1000 you asked for? When there are no quantifiable damages, I am not sure how to apply that range of $100-$1000.
This is great that she disclosed this to you but how did she come up with this information. I thought that they didn't own the scoring system, didn't know how it works, etc. (ya know the kinda BS they give you when you ask questions). Are you saying that if I get three inquiries deleted off of my credit report, my score should go up approximately 40 points? Sirrowan
Yeah, I hate that too. What would really suck is to find out in the courtroom. But remember kids, I'm not a lawyer. Your best bet is to do as I have done and read the law. Then read it again, and again. Rinse and repeat. Follow up by reading as many cases relating to the section of law you are studying. Form your own opinion, based on the law and cases you have studied. Anything less leaves you in a bad position. Relying on someone elses opinion without a thorough understanding as to WHY their opinion is worthy can lead to huge problems. I saw a post where the judge awarded just $100 plus the filing fee. It would seem that the judge can do what he/she wants, so long as it's within the statute and at least equal to any actual damages.
In my example, the person would have 5 negative entries. Four of those negative entries are being reported correctly (even though it is negative information.) One of the five negatives is not reporting correctly. It is a positive tradeline that has reported incorrectly. The persons score is a 500 FICO. How do you assert that because of that 1 tradeline that is reporting negatively (when it should be reporting positively) your score has been adversely affected? Common sense would tell me that the 500 score was probably caused by all of the negative items in some capacity not one individually. That was my question.
