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Potent remedies available for FCRA violations

Posted by Brett D. Sherman | Nov 08, 2021 | 0 Comments

The Fair Credit Reporting Act (FCRA), a fee-shifting statute, offers potent remedies to consumers who prevail at trial. We will take a brief look at those remedies in today's post.

Negligent and Willful FCRA Violations

There are two types of violations of the Fair Credit Reporting Act.  When a jury finds a credit bureau (a/k/a a "consumer reporting agency") and/or a company that reports information to credit bureaus like Equifax, Experian, and Trans Union (the companies that report information, often creditors or collection agencies, are defined as furnishers by the FCRA) is/are liable to you for FCRA violations concerning inaccurate credit reporting, that jury must determine whether the violation(s) were “negligent” or  “willful.”  What is the difference between negligent and willful violations?  Negligent FCRA violations fall under the umbrella of unreasonable, but less than reckless, inaccurate reporting. Willful FCRA violations are intentional or reckless breaches of the Fair Credit Reporting Act.  As we address below, both types of violations entitle the consumer to an award of damages, reasonable attorney's fees, and costs. Willful FCRA violations include awards of punitive damages and, in some cases, "statutory damages."  

Fee-shifting and Cost-shifting

The Fair Credit Reporting Act is a “fee-shifting statute.” This means that a consumer who prevails at trial, whether the violations are deemed negligent or willful, is entitled to receive from defendants the consumer's reasonable attorney's fees and costs. The fee-shifting nature of the FCRA allows Sherman & Ticchio to represent our clients without them paying us a penny. Our attorney's fees come exclusively from the proceeds of the case (verdicts or settlements). Those case proceeds are paid by credit bureaus and/or furnishers.   

In addition to attorney's fees, the FCRA entitles a successful consumer to recover “costs.” Costs are the expenses you incur to prosecute the lawsuit (as opposed to fees billed by an attorney for representing you). Again, Sherman & Ticchio fronts your costs -- such as filing fees, deposition costs, and expert witness fees -- and we will never ask you to pay any costs from your own pocket. Rather, like attorney's fees, we recover the costs of the lawsuit from the proceeds of case settlements or verdicts.  

What are Statutory Damages?

If a jury decides that a violation of the Fair Credit Reporting Act is "willful” (knowing or reckless), a consumer can recover damages that range from $100 - $1,000 for each willful FCRA violation.  Because some cases (especially mixed file credit report cases) may include dozens or even hundreds of willful FCRA violations, statutory damages under the Fair Credit Reporting Act may be substantial. In other cases, statutory damages may be relatively low.  As such, as an alternative to statutory damages, a jury can award you your "actual damages" when there is a finding of willfulness.  

What are Actual Damages?

Actual damages for willful or negligent violations of the Fair Credit Reporting Act -- can be broken into two further categories: Pecuniary damages (a/k/a economic damages) and nonpecuniary damages (usually, damages to your reputation and/or emotional distress damages that you suffer because of FCRA violation(s)). 

Pecuniary damages often arise when a consumer report with inaccurate information on it causes "adverse action" (some examples - a credit denial, insurance denial, lowering of a credit line, or cancellation of a credit card account altogether). In sum, you are entitled to economic damages when an FCRA violation causes you monetary loss. 

It cannot be stressed enough that the FCRA does not require that you suffer pecuniary damages in order for a jury to find in your favor (thereby making credit bureaus and furnished responsible for your costs and reasonable attorney's fees). Anxiety and stress from credit report errors can take a terrible toll on a consumer's body and mind. Because of the vital nature of credit reporting to one's finances in modern society, victims of Fair Credit Reporting Act violations often suffer a highly stressful ordeal while they and their credit lawyers try for many weeks, months, or years. Emotional distress damages are significant in many cases. 

What are Punitive Damages?

Punitive damages, which must be awarded when there is a willful FCRA violation, have a dual purpose.  They are meant both to punish defendants for their FCRA violations and to deter them from committing similar misconduct. While the size of punitive damages awards varies greatly and is, generally speaking, subject to certain Constitutional limits, many punitive damages awards reach well into the six figures. Sometimes, depending on the amount of your actual damages, punitive damages for FCRA violations can even reach seven figures.  

The Big Finish (our Conclusion)

If you have errors on your credit reports, consult with an attorney who is experienced in handling Fair Credit Reporting Act cases (whether that is Sherman & Ticchio or another law firm). Make sure you don't fall for scams by credit repair shops that charge regular or up-front fees. Instead, contact qualified consumer attorneys who are also federal court litigators. Most, like our firm, won't charge you for a consultation or anything out of pocket to represent you.    

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