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FCRA Section 623(a) violations do NOT result in legal claims for consumers

A CreditFactors subscriber had been disputing with HSBC directly after reading about the “623 method” on the web. It took a while to get the point across that many provisions of the FCRA are totally useless.

Unfortunately, there is lots of misinformation on the web about NEW RIGHTS under the 2003 FCRA amendment (FACT Act) and many credit sites recommend disputing with creditors directly.

Many credit repair companies also send frivolous disputes directly to CREDITORS. Of course the credit repair mills don’t send disputes with the intent to sue because the disputes are frivolous and they try to delay corrections so that their clients continue to pay longer.

However, if you are a credit professional, you are NOT sending frivolous disputes and you should know the basics about establishing legal claims for your clients.

From the FCRA:

§ 623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. § 1681s-2]

(c) Limitation on liability. Except as provided in section 621(c)(1)(B), sections 616 and 617 do not apply to any violation of–

(1) subsection (a) of this section, including any regulations issued thereunder;

Section 623 (a) contains the touted new requirements for data furnishers, section 621 is “Administrative enforcement” and sections 616 and 617 are the sections giving consumers the right to sue.

Data furnishers have absolutely NO liability to consumers for failing to comply with section 623(a) requirements.

And that explains why creditors couldn’t possibly care less about compliance.

ONLY regulators can enforce section 623 (a) compliance.

Have the client mail disputes to a creditor directly if also disputing with the CRAs and the client is going to sue if the reporting is not corrected. In other words, dispute with the creditor directly if it’s important.  Since the CRAs often don’t provide the actual disputes submitted by consumers to the creditors, COMPLETE and FACTUAL disputes with creditors IN ADDITION to the CRA disputes might result in larger punitive damages or settlements. 

Do NOT send letters to creditors because of “rights” under FCRA 623(a) as consumers have NO legal rights after violations. 

It especially unprofessional to demand “validation” of debts from creditors and makes the client look bad.

If it’s NOT the client’s account, have him/her send a notarized fraud affidavit.  Demanding validation indicates that the client is a liar.

The 2003 FACT Act weakened the FCRA and added countless pages of ludicrous and bizarre requirements to confuse consumers and even lawyers.

It makes it easy for credit bureaus and creditors to get lawsuits dismissed because consumers don’t have the right to sue for most violations.

While the regulators COULD enforce consumer legislation, they refuse to do so.  So let’s just get rid of all that harmful fluff and stick to laws that mean something.

4 Responses to “FCRA Section 623(a) violations do NOT result in legal claims for consumers”

  1. Does this mean a charged off account can be reported as new everymonth until it falls off credit report? By doing this a recent late payment with a recent CO shows up for, in my case 4 years. keeping my credit score under 600. I am currently in a law suit as this debt is not mine and was not known to me unitl I went to buy a house. Disputes have turne up the original charge off was in 2008. Anybody know the answer?

  2. A charged off account CAN be reported as chargeoff every month, but they also have to report the Date of Last Activity (Equifax) and Date Closed (TU). For Experian it gets complicated, but the Date of Status MAY be critical. I’ve posted in more detail about these issues at the blog here.

    With otherwise good credit a CORRECTLY REPORTED 2008 charge-off should not lower your scores below the mid to high 600s. However, you COULD be subjected to the Equifax FICTITIOUS late payments, see http://mylitigation.net/pr.php/news/release/2_26_07_open_letter_fair_isaac_regarding_its_addition_of_fictitious_data

    I have the documentation proving that as of June 2011 myFICO had NOT fixed this bug. And I just had another client with a myFICO report that has the fictitious late payments, but I can’t prove that they lower the scores because he has so many other problems.

    Hopefully your attorney is smart enough and willing to take the time to figure out why your scores are so low. I find that most people don’t understand the credit reports well enough to determine WHY their scores are so low and often it’s just a missing or incorrect piece of data.

    So if you can’t get the account deleted and you still want to buy a house, I highly recommend subscribing to the CreditFactors knowledgebase and member forum where I’ll be glad to help you if you post the reporting of the account and your myFICO score factors. Or you can order the Credit Review or the Analysis (only recommended for people who need higher FICO scores for a mortgage.)

    Since the account is NOT yours, I sure hope they’ll delete.

  3. attempting to get negative info removed from credit. car was totaled insurance paid out 29,000 but due to 1000 dollar detectable 1000 remained unbeknownst to me it was about four months b4 I found out because that 1000 remained never sent me notice. Chrysler capital added 700 interest to the and I ended up owing 1700 they cant explain it but dinged my credit

  4. I would submit a factual dispute to the credit bureaus, stating pretty much what you wrote here. Something like “I recently noticed this delinquent Chrysler account [account #].

    I assumed my insurance had paid everything after I totaled my car because I never received a bill or any accounting. I cannot possibly owe this much!

    Please immediately delete this account.

    …”

    If they don’t delete/correct and don’t contact you, at least you’ll have an FCRA violation [assuming everything is as you described]. And you can post here again for the next steps.

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