Federal law lets a consumer sue a credit bureau that fails to meet a Fair Credit Reporting Act duty, in federal or state court, by the earlier of two years after discovering the violation or five years after it happened. A consumer's dispute with the bureau is what triggers the reinvestigation duty in 15 U.S.C. § 1681i(a).
A consumer looking for a credit bureau lawyer may already have seen the problem in a report. There is an account they never opened, a balance that is wrong, or a late payment that never happened. They may have already sent a dispute, and the item came back "verified" or the bureau never really answered. Now they want to know whether the law gives them anything more than another dispute letter, and what going to court would actually involve.
This page walks through the Fair Credit Reporting Act (FCRA) as it applies to credit bureaus. It covers what the statute requires, the dispute step, the kinds of errors it reaches, what a court can award, and the deadline for filing.
What the FCRA Says About Suing a Credit Bureau
The FCRA governs the companies that build credit reports, the companies that send them information, and the businesses that use the reports. A credit bureau's legal name is a consumer reporting agency (CRA). The Consumer Financial Protection Bureau describes these as companies that compile and sell credit reports.
As 15 U.S.C. § 1681a(d) defines it, a consumer report is a CRA's communication of information bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living, used or expected to be used or collected as a factor in establishing the consumer's eligibility for credit or insurance for personal, family or household purposes, for employment purposes, or for any other purpose authorized under 15 U.S.C. § 1681b.
The FCRA gives consumers a private right of action. That means a consumer may file a civil lawsuit, in federal or state court, against a CRA that fails to comply with the statute. The law sets up two tracks of liability:
- Willful noncompliance, under 15 U.S.C. § 1681n, for a person who willfully fails to comply with a requirement of the statute.
- Negligent noncompliance, under 15 U.S.C. § 1681o, for a person who is negligent in failing to comply.
The difference matters because each track opens up different remedies, covered below. Whether a particular credit report problem amounts to a violation at all depends on the facts of that situation.
The Dispute Step and the Reinvestigation Duty
Under 15 U.S.C. § 1681i(a), when a consumer tells a CRA that an item in their file is incomplete or inaccurate, the CRA must, free of charge, conduct a "reasonable reinvestigation." A reinvestigation is the process a CRA must run to decide whether disputed information is wrong. The CRA must then record the item's current status or delete it.
The timeline is set by statute. The CRA generally has 30 days from the date it receives the dispute. That period may be extended by up to 15 more days if the consumer sends relevant information during the first 30 days. The extension does not apply if, within those 30 days, the CRA finds the item inaccurate or incomplete, or decides it cannot be verified. Within 5 business days of receiving the dispute, the CRA must notify the company that supplied the information.
That company is called a furnisher. A furnisher is a business, such as a bank, a card issuer or a landlord, that sends information about a consumer to a CRA. Furnishers have their own FCRA duties, and 15 U.S.C. § 1681s-2(c) and (d) limit which furnisher violations the liability sections reach, as explained below.
The CFPB's dispute page lists online, phone and mail channels for disputing with each nationwide CRA. A CRA may terminate a reinvestigation if it reasonably determines that the dispute is frivolous or irrelevant. It must then notify the consumer not later than 5 business days after making that determination, and the notice must include the reasons and identify any information required to investigate the disputed information.
The dispute step carries legal weight. A CRA's failure to conduct a reasonable reinvestigation after a proper dispute is the kind of conduct that may give rise to an FCRA claim, depending on the facts.
What Counts as an Error — and What the FCRA Covers
Credit report errors tend to fall into three broad groups. The first is wrong personal information, such as a misspelled name, an address the consumer never lived at, or an incorrect Social Security number. The second is accounts that do not belong to the consumer, which can come from identity theft or from a mixed file. A mixed file is a credit file that contains another person's information, often someone with a similar name or Social Security number. The third is inaccurate account status: a wrong balance, a wrong payment history, or an account shown as open when it was closed, or closed when it is open.
Two FCRA provisions speak to these problems. Under 15 U.S.C. § 1681e(b), whenever a CRA prepares a consumer report, it "shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates." A CRA that fails to follow reasonable procedures may violate that section. Whether its procedures were reasonable depends on the facts.
Outdated information is the other category. Under 15 U.S.C. § 1681c(a), generally and except as that section's subsection (b) authorizes, a CRA may not report certain old items. These include bankruptcy cases more than 10 years old and civil suits, civil judgments and arrest records more than seven years old or until the governing statute of limitations has expired, whichever is longer. Paid tax liens more than seven years past payment and collection or charged-off accounts more than seven years old are also excluded, as is any other adverse item more than seven years old other than records of criminal convictions. The statute also restricts how a CRA may report the name and contact details of medical information furnishers.
What the FCRA Makes Potentially Available in a Lawsuit
Here is how the two tracks described above differ in what a court may award. These are what the statute makes potentially available. What a court actually awards, if anything, depends on what it finds and what the consumer can prove.
Willful noncompliance (15 U.S.C. § 1681n). A person who willfully fails to comply is liable for the sum of three things:
- "any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000." Where a natural person obtained a consumer report under false pretenses or knowingly without a permissible purpose, the figure is actual damages or $1,000, whichever is greater.
- "such amount of punitive damages as the court may allow."
- In a successful action, the costs of the action and reasonable attorney's fees as the court determines.
Negligent noncompliance (15 U.S.C. § 1681o). A negligent person is liable for any actual damages the consumer sustained as a result of the failure, plus costs and reasonable attorney's fees in a successful action. There are no statutory or punitive damages on this track.
Actual damages, in the statute's words, are those "sustained by the consumer as a result of the failure." Which damages a court counts depends on the facts and the evidence. Each section also provides that, on a finding by the court that an unsuccessful pleading, motion or other paper filed in connection with an action under that section was filed in bad faith or for purposes of harassment, the court shall award the prevailing party attorney's fees reasonable in relation to the work expended in responding to that paper.
Someone who has spent months on disputes may hope this section settles whether a case is worthwhile. It cannot. Whether conduct was willful, negligent or neither is a fact question.
Where a Lawsuit Can Be Filed and How Long a Consumer Has
Under 15 U.S.C. § 1681p, an FCRA action "may be brought in any appropriate United States district court, without regard to the amount in controversy, or in any other court of competent jurisdiction." In practice, that means federal court or a state court that has authority over the case.
The same section sets the filing deadline. A lawsuit must be filed "not later than the earlier of" two dates:
- 2 years after the date the plaintiff discovers the violation, or
- 5 years after the date the violation occurs.
This is a statutory deadline. It runs from discovery or from the violation itself, whichever produces the earlier date.
The defendant in these cases is not always a nationwide CRA. The CFPB notes that specialty consumer reporting companies may collect other information, including employment and tenant history.
Many of these reports matter because of adverse action. Under the CFPB's summary of FCRA rights, adverse action includes denying an application for credit, insurance or employment based on a report. Anyone who takes that action must tell the consumer and, among other things, give the name, address and phone number of the agency that supplied the report (15 U.S.C. § 1681m(a)). The broader picture of a consumer lawsuit under federal law covers related statutes.
The FCRA's Relationship to Disputes, Complaints, and Lawsuits
These are three separate tracks, not a ladder a consumer must climb in order. For claims about a bureau's reinvestigation, what happened after a proper dispute under 15 U.S.C. § 1681i is often at the center of whether a claim is viable.
According to the CFPB's page on disagreeing with dispute results, a consumer can submit a complaint online or by calling (855) 411-CFPB (2372). That same page says a consumer with an unresolved dispute can ask that a brief statement of the dispute be included in their file. The statement right applies only to disputes sent to a CRA. That page lists the right to bring a lawsuit and a complaint to the CFPB among the options for a consumer who disagrees with dispute results.
Furnishers sit on a parallel track. Under 15 U.S.C. § 1681s-2(b), after a furnisher gets notice of a dispute from a CRA, it must investigate. It must also review the information the CRA sends and report the results to the CRA. If the information is wrong, it must tell the other nationwide CRAs it reported to. If the item is inaccurate, incomplete or unverifiable, it must modify, delete or permanently block it. All of this must be done within the CRA's reinvestigation period. Under 15 U.S.C. § 1681s-2(c), and except as provided in 15 U.S.C. § 1681s(c)(1)(B), 15 U.S.C. §§ 1681n and 1681o do not apply to a violation of 15 U.S.C. § 1681s-2(a) (including regulations issued under it), the furnisher's duty to provide accurate information, and 15 U.S.C. § 1681s-2(d) provides that those violations are enforced exclusively by the federal and state officials identified in 15 U.S.C. § 1681s. A consumer may also dispute directly with a furnisher, and the CFPB says furnishers generally must respond within 30 days.
What This Page Does Not Cover
This page explains the FCRA's framework for civil claims against consumer reporting agencies. It does not cover claims against debt collectors under the Fair Debt Collection Practices Act, such as debt collectors calling family. It also does not cover call and text claims under the Telephone Consumer Protection Act or employment background-check disputes. State law may add protections beyond the FCRA, and those rules differ from state to state.
If You'd Like a Consumer Rights Case Review
This page does not address debt collection or background-check claims, and it does not settle any one person's situation.
A reader looking for an attorney to sue a credit bureau can request a consumer rights case review through Federal Consumer Rights.
