What is on your credit report is important. The information can impact your ability to get approved for a mortgage, your interest rates, and many other aspects of life. The Fair Credit Reporting Act (FCRA) is a federal law that regulates how consumer credit information is collected, shared, and used. Under the FCRA, consumers can sue: 

1. Credit reporting agencies; and
2. Furnishers of information.  

The category of “furnishers of information” includes both the original creditor and any third-party debt collectors. You have the right to sue a debt collection agency for violating your FCRA rights. Here, our consumer protection attorney discusses the most notable points to understand about holding a debt collector legally responsible for an FCRA violation. 

An Overview of Your Rights Under the FCRA

Under the FCRA, consumers have the right to access their credit reports, dispute any inaccuracies, and expect fair treatment from companies that handle financial data. Debt collectors who report incorrect information to credit bureaus must investigate disputes and correct errors. They cannot knowingly report false or outdated debt. If a debt collector violates these rules—such as failing to correct inaccurate information—a consumer can hold them accountable. 

Third-Party Debt Collectors May Be Held Liable for FCRA Violations

Creditors and third-party debt collectors are furnishers of information. The FCRA applies to them, and they can also be held liable for violations of the law. Indeed, if a debt collector furnishes false information to a credit bureau and fails to correct it after a dispute, they may be in violation of federal consumer rights law. A consumer can sue a debt collection agency for an FCRA breach. 

Remedies for Consumers Who an FCRA Claim Against a Debt Collector 

If a debt collection agency violates your rights under the FCRA, you may be entitled to several remedies. You can file a dispute with the credit bureau to correct inaccuracies and report the debt collector to regulatory agencies like the Consumer Financial Protection Bureau (CFPB). If the violation caused financial harm, you can file a civil lawsuit seeking compensation for damages. Consumers have a right to seek financial compensation for the full value of their actual damages. 

You May Have a Claim Against a Debt Collector Under an Alternative Law (FDCPA)

Beyond any FCRA claim, a consumer who has been subject to unfair treatment by a debt collection agency may also have an additional claim under the Fair Debt Collections Practice Act (FDCPA). The FDCPA is a federal law that protects people against debt collection harassment. If you have any questions about an FDCPA claim, an experienced attorney can help. 

Contact Our Consumer Protection Attorney Today

At The Kim Law Firm, LLC, our consumer protection lawyer has the knowledge, experience, and integrity that you can trust. If you have any questions about bringing a claim against a third party debt collector under the FCRA, we are here as a legal resource. Contact us today for a free, completely confidential initial consultation. We are committed to protecting the rights of consumers against unfair actions by debt collectors and credit reporting agencies.

The post Can You Sue a Debt Collection Agency for Violating Your Rights Under the FCRA? appeared first on The Kim Law Firm, LLC.

Big auto companies like Hyundai, Kia, Ford, and others have their own in-house financing departments and offer loans directly to car buyers. Like any large organization, these finance companies sometimes make mistakes when reporting loan information to credit reporting agencies (CRAs) like Equifax, Experian, and TransUnion. Understanding how to address these errors is critical for protecting your credit and ensuring your financial well-being.

Reporting Errors: Common Auto Loan Errors on Credit Reports

A Consumer Financial Protection Bureau (CFPB) study found that 1 in 5 consumers had an error on at least one of their credit reports. This highlights the prevalence of inaccuracies and underscores the importance of regularly monitoring your credit report for mistakes.

Errors related to auto loans on your credit report can take various forms. Here are some of the most common mistakes:

1. Incorrect Payment Status

A lender may incorrectly report a loan as late, delinquent, or in default, even if you’ve made timely payments.

2. Duplicate Accounts

The same auto loan may appear multiple times on your credit report, which can inflate your debt-to-income ratio and harm your credit score.

3. Incorrect Account Balances

Errors in the reported balance of your auto loan can misrepresent your financial situation, making it seem as though you owe more than you do.

4. Closed Accounts Listed as Open

A loan you’ve paid off and closed might still be reported as active, negatively affecting your credit utilization ratio.  

5. Identity Theft or Fraudulent Accounts

Someone may have taken out an auto loan in your name, which could result in fraudulent accounts appearing on your credit report.

Why Do Auto Loan Errors Happen?

Errors on credit reports can stem from various sources, including:

• Clerical Mistakes: Manual errors during data entry by lenders or CRAs can lead to inaccuracies.
• Miscommunication Between Lenders and CRAs: Auto lenders may fail to update CRAs, leading to outdated or incorrect information.
• System Errors: Automated systems used by lenders or CRAs might incorrectly process or report data.

Lenders with their own financing departments, such as Hyundai Motor Finance or Kia Finance America, can be particularly prone to these issues due to high volumes of transactions and reliance on automated systems. These errors can affect consumers across the board, regardless of their creditworthiness.

How to Detect Auto Loan Errors

Regularly reviewing your credit report is the first step in identifying and addressing errors. Under the Fair Credit Reporting Act (FCRA), you’re entitled to one free credit report annually from each of the three major CRAs: Equifax, Experian, and TransUnion. You can request these reports through AnnualCreditReport.com.

When reviewing your credit report, pay close attention to:

• Account details, including the lender’s name, account number, and balance.
• Payment history for any inaccuracies or late payments that don’t align with your records.
• Any unfamiliar or duplicate accounts that might indicate fraud or clerical errors.

4 Steps to Take When You Spot an Auto Loan Error

If you discover an auto loan error on your credit report, follow these four steps.

1. Gather Evidence

Collect all relevant documents, such as loan statements, payment receipts, and correspondence with your lender. This evidence will support your case when disputing the error.

2. Dispute the Error with the Credit Reporting Agency

Under the FCRA, you have a right to dispute any inaccurate information on your credit report. To do this:

• Submit a dispute in writing by mail to the CRA’s (Equifax, Experian, or TransUnion).  We recommend written mailed disputes, by certified mail, because of various 
• Include a detailed explanation of the error and copies of supporting documents.
• Keep records of all your communications, including dispute confirmation numbers and dates.

The CRA must investigate your dispute, typically within 30 days, and notify you of the results.  In rare instances, a CRA will have 45 days to complete its investigation.  This additional time is, however, subject to the CRA notifying you in writing that it requires an additional 15 days to complete its investigation.

The Law Firm has most typically seen inaccuracies reported relating to auto loan/lease reporting when individuals return vehicles at the end of lease periods.  For example, inaccuracies can arise when the leased vehicle is returned earlier and a new vehicle is leased (with the permission of the car dealership) or when the leased vehicle is purchased at the end of the lease term.

3. Contact the Lender Directly

In addition to disputing the error with the CRA, contact the lender responsible for the mistake. Request a correction and provide the same supporting evidence you submitted to the CRA. Some lenders have dedicated departments or online portals for handling disputes.

4. Escalate the Issue if Necessary

If the error isn’t resolved satisfactorily, consider taking further steps, such as filing a complaint with the CFPB or seeking legal assistance from an attorney experienced in FCRA cases. Richard H. Kim, Esquire of The Kim Law Firm LLC, specializes in credit reporting and background check errors.

Understanding the Fair Credit Reporting Act (FCRA)

The FCRA is a federal law that provides consumers with important rights to ensure the accuracy of their credit reports.

Key protections include:

• The right to dispute inaccurate information.
• The right to a timely investigation of disputes.
• The right to sue for damages if errors harm you financially.

If you’re dealing with a persistent or complex auto loan error, consulting with a qualified consumer protection attorney can help you navigate the process and hold lenders or CRAs accountable for their mistakes.

How to Prevent Future Errors

While it’s impossible to eliminate the risk of credit report errors completely, you can take steps to minimize it:

1. Monitor Your Credit Regularly: Use free or subscription-based credit monitoring services to detect changes or errors promptly.
2. Set Up Auto-Pay for Loans: Ensuring on-time payments can reduce the risk of incorrect delinquency reports.
3. Maintain Clear Records: Keep organized records of loan agreements, payments, and correspondence with lenders.

Big Lenders and Repeated Errors

Major car companies with in-house financing departments, like Hyundai Motor Finance, Kia Finance America, Ford Motor Company Credit, and Toyota Financial Services, are frequent players in credit report disputes. Their reliance on automated systems and the high volume of accounts they manage make them susceptible to reporting errors. If you’ve had issues with one of these lenders, it’s especially important to act quickly to resolve the error and prevent lasting damage to your credit.

Take Control of Your Credit Today

Errors related to auto loans on your credit report can have serious consequences, but you don’t have to face these challenges alone. You can protect your financial health by understanding your rights under the FCRA, regularly monitoring your credit, and taking proactive steps to address inaccuracies.

Contact The Kim Law Firm LLC if you’re struggling to resolve a credit report error. We will guide you through addressing credit reporting errors and advocate for your rights. Your credit is too important to leave in the hands of big lenders’ mistakes—act today to ensure accuracy and fairness.

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When a debt goes unpaid for a prolonged period of time, it typically is sent to a debt collection agency. These agencies are notorious for their persistent pursuit of consumers regarding their debts. However, staying informed on how to best proceed when contacted by a debt collector is essential to avoid the mess that comes with debt collector harassment. 

Know and Understand Your Rights

Consumers should be aware of their rights when they are contacted by debt collectors. Being continually pursued by debt collectors may take an emotional toll on consumers, coupled with the stress of dealing with the actual debt. Many people don’t know that there is a body of law that protects them from harassment – The Fair Debt Collection Practices Act (FDCPA). The FDCPA protects consumers from, among other things, the abusive practices of third-party debt collectors which allows a consumer to obtain compensation for damages including emotional distress and physical distress caused by the harassment as well as attorneys’ fees for obtaining an attorney to represent you regarding the potential FDCPA violation.  

Keep a Record of All Communication

The two primary forms of communication that debt collectors will use are telephone and postal mail. Consumers should keep all correspondence in the event that they must make a complaint or file a lawsuit. As for phone calls, consumers should jot down the debt collector’s name, the time and length of any conversation that does take place with the debt collector, a reliable call back number, and the company that they work for.

Ask for Debt Verification

Once a debt collector has contacted a consumer, they have five days to provide the consumer with “validation information” regarding the debt. This is a written notice including the total amount of debt, the creditor’s name for which the debt is owed, and the original creditor’s name. 

Debt validation is important as some collection agencies may not legally own the debt. They may just be collecting on behalf of the original creditor. Therefore the validation is given to the consumer so they can decide how to proceed. 

Write a Cease and Desist Letter

Consumers have the option of ceasing communication with debt collectors by writing a letter telling them to stop. Both Pennsylvania and federal law require collection agencies to abide by the consumer’s request. Otherwise, the consumer can take appropriate action, including report them to the Federal Trade Commission (FTC).

Types of Impermissible Actions Under the FDCPA

Other than harassing a consumer, there are numerous other improper steps that a debt collector may take that violates the law. For example, a debt collector may: make false representations regarding the debt that you allegedly owe; claim that you owe more than you actually do; claim that there is a current legal action pending against you even though there is none; and contact your family members to collect the debt. Read more on how the FDCPA works against debt collection harassment here.

If you believe you are the victim of a debt collector’s abusive practices and need a civil litigation attorney, contact The Kim Law Firm, LLC here or call (855) 996-6342, and one of our experienced attorneys will help you weigh your legal options.

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In Holzman, defendant LVNV (a debt collector) purchased a time barred debt that plaintiff had owed.  LVNV enlisted co-defendant Malcolm Gerald & Associates (“Malcolm”) to engage in collection activities by sending collection letters to consumers (including plaintiff), which provided ‘offers’ to resolve outstanding time barred debts at reduced payment amounts in lieu of the full balance.  These offers also required that payments be provided by certain dates before those reduced payment offers expired. The collection letters also failed to notify consumers that the debts which were being collected on were no longer legally enforceable against the consumer.  Plaintiff filed a consumer class action complaint against the defendants for violating the FDCPA by issuing these collection letters as they were misleading, and the least sophisticated consumer could be misled as to their payment obligation (or lack thereof) to defendants based on the wording of the collection letters.  The defendants filed motions to dismiss, which were granted by the district court.  

The Eleventh Circuit (includes Alabama, Florida and Georgia) reversed the district court’s dismissal and held, among other things, that there was a viable FDCPA claim because “by urging the debtor to ‘take advantage’ of the offer, the letter might have caused an unsophisticated consumer to mistakenly believe that the debt was legally enforceable and that he had something to gain by accepting the offer, or to lose by declining it.” Holzman v. Malcolm S. Gerald & Assocs., Inc., 920 F.3d 1264, 1272 (11th Cir. 2019).  This is yet another example where the consumer protection purposes of the FDCPA were recognized and upheld.

If you believe you have been subjected to any conduct by a debt collector that is intrusive, harassing or improper, it is important to seek the guidance of a skilled FDCPA and Consumer Protection Attorney as soon as possible. To schedule a consultation to discuss your situation with one of our attorneys, contact The Kim Law Firm, LLC today by calling 855-996-6342.

The post LVNV’s Collection Attempt on a Time Barred Debt was a Violation of the FDCPA. appeared first on The Kim Law Firm, LLC.

Credit reporting agencies many times do not have a record (or have an inaccurate record) of the date of first delinquency, which leads to collection accounts remaining on credit reports longer than they should.  This coupled with consumer confusion as to the date by which the seven (7) year age off date begins results in collection accounts remaining on credit reports in excess of the time that they should. 

If you believe that a collection account on your credit report is still being reported even though seven years (7) years has passed since the date of first delinquency it is important to seek the guidance of a skilled FCRA and Consumer Protection Attorney as soon as possible so that you may correct any inaccuracy in your credit report. To schedule a consultation to discuss your situation with one of our attorneys, contact The Kim Law Firm, LLC today by calling 855-996-6342.

The post How Long Does a Collection Account Stay on a Credit Report? appeared first on The Kim Law Firm, LLC.

In Barbato, plaintiff Mary Barbato incurred a debt with GE Capital Corporation (“GE”).  That debt was transferred between several companies and was ultimately acquired by Crown Asset management, LLC (“Crown”).  Crown was in the business of buying debts that were in collections and used the services of Turning Point to collect on the debts it purchased.  The plaintiff filed suit against Crown and Turning Point for violations of the FDCPA.  In attempting to have the case against it dismissed, Crown argued that it was only a creditor and should not be considered a debt collector since it outsourced the actual collection to Turning Point.  The district court disagreed with Crown’s argument.  Crown then appealed the district court’s determination to the Third Circuit.  The Third Circuit agreed with the district court in finding that Crown was a debt collector and held that a debt collector under the FDCPA includes any entity that has a “principal purpose” of collecting on a debt, regardless of whether it outsources the debt collection activity to a third party.  This determination reinforces the consumer protection purposes behind the enactment of the FDCPA.

If you believe you have been subjected to any conducted by a debt collector that is intrusive, harassing or improper, it is important to seek the guidance of a skilled FDCPA and Consumer Protection Attorney as soon as possible. To schedule a consultation to discuss your situation with one of our attorneys, contact The Kim Law Firm, LLC today by calling 855-996-6342.

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In Rotkiske v. Klemm, No. 18-328 (U.S. Dec. 10, 2019), the plaintiff alleged a violation of the FDCPA and instituted suit approximately 6 years after the alleged violation occurred.  The Supreme Court affirmed the dismissal of plaintiff’s action by the lower courts and held that absent the application of an equitable doctrine, the date the FDCPA violation occurs is when the statute of limitations for instituting a lawsuit begins to run.   Therefore, it is always important to keep in mind corollary state laws that may have different limitation periods (such as the Pennsylvania Fair Credit Extension Uniformity Act 73 PA. Cons. Stat. § 2270 et seq.), along with the specific reasons why a party may not have know about the FDCPA violation earlier.

If you believe you have been subjected to any conducted by a debt collector that is intrusive, harassing or improper, it is important to seek the guidance of a skilled FDCPA and Consumer Protection Attorney as soon as possible. To schedule a consultation to discuss your situation with one of our attorneys, contact The Kim Law Firm, LLC today by calling 855-996-6342.

The post The Supreme Court Has Opened the Door for Extending the Statute of Limitations for FDCPA Claims appeared first on The Kim Law Firm, LLC.