Fighting Back: Legal Action against the Credit Industry

There are two main federal laws in place that help protect debtors against abuse, mistreatment, and exploitation by creditors, collections agencies, and credit bureaus. Together, they provide consumers with important rights to protect themselves and their finances through legal means. Thanks to the Fair Credit Reporting Act and the Fair Debt Collection Practices Act, consumers can sue those in the credit industry who may be doing business on the other side of the law.

• Fair Credit Reporting Act (FCRA) – A federal law that requires accuracy, confidentiality, and fairness in consumer credit reporting.

• Fair Debt Collection Practices Act (FDCPA) – A federal law that regulates behavior and tactics of debt collection agencies to ensure ethical practices.

FCRA allows consumers the ability to sue creditors, credit bureaus, or collections agencies for the following reasons. For each transgression, the potential fine is $1000:

• You may sue a creditor if you dispute a debt and the company does not report the dispute to the credit bureaus.

• You may sue a credit bureau if an item that previously had been removed from your credit report is re-listed, and you have not been notified in writing within five business days.

• You may sue a credit bureau if you have made a dispute in writing that has not been responded to within 30 days (unless a 15 day extension is granted).

• You may sue a creditor, credit bureau, or collections agency if anyone attempts to “re-age” an account to keep negative information on your credit report longer than required.

FDCPA allows consumers the ability to sue collections agencies for the following reasons. For each transgression, the potential fine is $1000:

• If they misrepresent themselves or your debt.

• If you dispute a debt and the company does not report the dispute to the credit bureaus.

• If they fail to confirm a debt upon your request, but continue to pursue collections efforts against you.

• If they fail to confirm a debt upon your request, but continue to report your debt to the credit bureaus.

• If you have sent a letter asking that they cease contact, and they continue to contact you.

• If they cash your check before the post-dated date.

• If they cost you money by calling you collect or sending COD mail.

• If they confiscate, or threaten to confiscate, your personal property without obtaining a court judgment.

• If they threaten to garnish your wages without obtaining a court order.

• If they call outside the hours of 8am to 9pm local time.

• If they discuss your personal financial situation with a third party, such as your neighbors, employer, friends, or family. Note that they may contact such people to find out your contact information.

• If they harass you or use abusive language.

In addition to the rights bestowed by these laws, you may sue for defamation or financial injury for a variety of transgressions, like if a credit bureau refuses to fix incorrect information, or if creditor continues to report your financial history incorrectly after having been sued by your state attorney general.

If you are facing illegal treatment by a creditor, credit bureau, or credit agency, you owe it to your financial livelihood to take the necessary steps to repair your credit. The fines incurred by your case will be provided to you, and you can use that money to pay off other debts. If everyone who has been a victim of illegal actions would hold the guilty parties responsibilities, the repercussions would make it necessary for the unscrupulous members of the credit industry to change the way they do business.

Usually, debtors are treated with fairness. If you have not been, however, then you can help both yourself and others in similar situations to find relief of financial and personal stress by suing those who are responsible.