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| Do you know your FRCA rights? |
1. The right to have your dispute investigated
All bureaus are required by law to investigate your dispute, usually within 30 days by contacting the creditor, collections agency or other information provider that supplied the data that is in question. Any information provider contacted in this way must launch its own investigation and report results back to the bureau.
There is a major exception to the 30-day rule. If the credit bureaus decide your dispute is frivolous they might tell you so and refuse to investigate. This is what happens if you repeatedly demand investigations into information that has been previously been verified. Needless to say this discretionary right of the credit bureau to name your complaints as frivolous can be very frustrating for people who are dealing with a creditor that refuses to correct its mistake.
2. The right to have erroneous information corrected
If the provider says the information is indeed inaccurate it is required to notify not just the bureau that originally contacted it but all the other major credit bureaus as well so that the error can be fixed and the item deleted. If the provider can’t verify the information it must be deleted from your credit report.
The bureaus can however reinsert the deleted information or undo the correction later on if the provider later verifies that the original item was in fact complete and correct. This exception can frustrate consumers who think they have clean reports only to see the negative information reappears on their report again after just a few months. However, you will have a clear cause of action if you know the information is wrong and you continue to tell them after it is posted again to your credit report.
3. The right to a written response
After completing its investigation the bureau must give you a written report of its findings and a free copy of your credit report if the investigation changed anything on our file.
Furthermore if the bureau later restores the information that was deleted or changed it must notify you in writing and provide you with the name, address and information of the provider who resubmitted the information.
4. The right to have a statement included in your file.
If the dispute doesn’t turn out the way you want you are entitled to insert a 100-word statement inserted into your credit report explaining your side of the story.
However as you read in the previous chapter these statements have no actual effect on your credit score and most lenders will not see it while assessing your loan. All most lenders see is that three-digit number that is your credit score.
5. The right to sue.
If a creditor or collection agency violates your rights by reporting inaccurate, unsubstantiated information or by failing to respond to your dispute you can sue the creditor or agency in state or federal court. Jurisdiction is not the subject of this article, but please be aware that the lawyer you (should) speak to if you decide to sue will be able to tell you the court in which your case should be filed. Some people have even pursued these claims successfully in small claims court.
Hopefully you can solve all of your credit problems without having to involve the courts. However sometimes it takes the threat of a lawsuit to get results with a difficult, unresponsive creditor, or credit bureau.
Organizing a Plan of Attack
At this point you should divide all of the errors you’ve discovered into two major categories.
The first category should include:
- Errors in unpaid debts that belong to you
- Debts that you suspect may have been illegally re-aged (old debts that have been submitted by vengeful lenders to look like new debts see the Chapter 6 on Vengeful re-Aging in this section for more clarity about this.)
- Errors in collection accounts
- The second category should include:
- Accounts that aren’t yours
- Wrong information about paid up accounts
- Debts that were included in a bankruptcy and were not listed that way
- Anything in the second category can be disputed right away.
With your letter or email of dispute make sure to include copies of any documentation that you have that supports your assertion. Needless to say you should never send originals. After you have noticed the credit bureaus follow up by sending a letter with that certified receipt requested to the creditor that supplied the mistaken information. This puts the creditors and the bureaus on notice that there is a problem. Failure to act on their part regarding these mistakes is a violation of the Fair Credit Act and gives you grounds for a lawsuit if they don’t at least send you a letter l notifying you that they are launching an investigation within thirty days.
In many cases creditors and bureaus will correct legitimate errors with no resistance. However you are highly advices to monitor your credit reports at least every sic months to make sure the information does not pop up again in the future. If that does happen resubmitting the paperwork and correspondence you sent to the bureau in the first place can help you get the errors removed more quickly and permanently the second time around.
If the creditor or information provider insists that its information is accurate then you might need to dispute the information with them again or if you feel so inclined you can hire a lawyer. Sometimes all it takes is one letter from a lawyer to get a creditor to stop giving you’re the run around.
If you need a good lawyer to represent you in a credit report matter a good resource where you can find one is the National Association of consumer Advocates that can be found at www.naca.net. This organization provides referrals to attorneys as well as links to many sites devoted to do it yourself credit repair.
When it comes to collections you have a very important right as outlined in the Fair Debt Collection Practices Act of 2003. This most important of rights your right to have a collection account validated.
The right to have a collection account verified refers to your right to ask a creditor to verify information. There are reviews of its records and any information supplied by the consumer and the lender then decides if the information on your credit report is right or not.
Sometimes when a collection agency is asked to validate a debt the process can get pretty complex. The collector must prove to the credit bureau that the debt is your responsibility and also that they have the legal right to collect it from you. This also means that the collector has to cease all collection activity until they provide this evidence to you. If the agency can’t validate the debt it must end its attempts to collect on the debt and stop reporting the collections account to the credit bureaus.
Note that your right to validation applies specifically to collection agencies and not the original creditor. Collection agency records are notoriously less reliable than those kept by the original lenders. As this is so, the validation process is intended to protect consumers from creditors that go after the wrong people or misstate the amounts of money owed on a credit report.
To validate a debt, the collector needs to provide current documentation obtained from the original creditor proving that you do indeed owe the money. This process of validation can be a powerful weapon in your battle to clean up the collection actions on your credit report. This is because more often than not collectors really don’t have the accurate documentation required to verify your debt. This is especially true if the debt has been passed around from one collection agency to another. Frequently they have little more than a computer printout to back up their claims and the Federal Trade Commission as made it clear that a mere itemization isn’t sufficient proof to constitute a validation of a debt.
The flaws in this validation process can work greatly to your advantage. Not only help you eliminate collection accounts that don’t belong to you but it can also help you get rid of some debts that do belong to you too. Surprisingly you can get accurate harmful information removed from your file simply because there is no trail of documentation attached to it.
Sometimes the collection agency won’t bother to verify the account especially if it’s too old or really small. If that’s the case the collection is usually dropped from your report without much fuss.
In essence, if a collector fails to respond or can’t provide sufficient evidence that you owe a debt it’s supposed to remove the collection form your report. If that doesn’t happen you can bring that matter to the attention of the credit bureaus and ask for reinvestigations. Make sure that you make it clear to the bureaus that this is not a repeat of your earlier request but rather let them know that you are contacting them because the collector did not comply. If the account is not removed at this point you have both the credit bureau and the collection agency on the hook for credit reporting violations and can pursue a lawsuit.
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