Your credit report matters. Even a small mistake can harm your score and cost you money. Unfortunately, credit report errors are common. A study cited by the Federal Trade Commission (FTC) found that approximately 20% of Americans have at least one error on their credit report. A significant share of those errors comes from inaccurate reports by debt collectors. 

Debt collection agencies have legal responsibilities under the Fair Credit Reporting Act (FCRA). They must report accurate information to credit bureaus. If they are notified of an error by a consumer, they must correct it. They can be held liable for their failure to do so. Here, our credit report error attorney provides a guide to hold debt collectors accountable for FCRA violations. 

Know the Law: Fair Credit Reporting Act (FCRA)

First and foremost, it is useful for consumers to have a broad understanding of the Fair Credit Reporting Act (FCRA). The FCRA is a federal consumer protection law that is designed to ensure that people are not harmed by errors on their credit reports. Here is the key point to know: 

• The FCRA gives you the right to dispute inaccurate, incomplete, or outdated information on your credit report. 

Notably, the law also requires credit reporting agencies and information furnishers—including both original creditors/lenders and third-party debt collectors—to ensure the accuracy of the data they provide. The FCRA contains a private right of action. That means that if your rights are violated, you can file a lawsuit to seek damages. 

What is a Debt Collector?

A debt collector is distinguished from a creditor/lender. A debt collector is any person or company that regularly collects debts on behalf of others. In other words, they are not the party that made the original loan. Along with other entities, this includes third-party collection agencies, law firms that collect debts, or companies that buy delinquent debts and then try to collect them. Debt collectors are regulated by a federal law called the Fair Debt Collection Practices Act (FDCPA) as well as state-based regulations. 

Note: A debt collector may or may not “own” the alleged debt that resulted in inaccurate information on your credit report. Indeed, sometimes they own it and sometimes they do not. It depends on how the debt collector came to be involved in the matter. Some debt collection agencies purchase alleged delinquent accounts from original creditors for pennies on the dollar and then attempt to collect on them. Other third-party debt collectors do not own the debt—they are hired by the original creditor (like a bank or credit card company) to collect the amount owed. 

The FCRA Covers Debt Collectors (Furnishers)

Debt collectors are classified as “furnishers” of information for the purposes of the FCRA. Notably, they are covered by the law if they report any information to any of the three major credit bureaus (Experian, TransUnion, and Equifax). They have a legal obligation to provide accurate and complete information about accounts they report. If a debt collector submits any form of inaccurate information about you to a credit reporting agency, you have the right to challenge it and seek a correction of the error. Indeed, the FCRA requires furnishers—including debt collectors—to investigate your claim in a timely manner and to correct any errors. The failure to do so can result in legal liability. Consumers may be entitled to both statutory damages and actual damages. 

An Overview of the Most Common Errors Made By Debt Collectors

Mistakes by debt collectors can come in a wide range of different forms. Consumers should carefully review their credit report—and it is best to check with each of the three credit agencies—for any mistakes. Some of the most common errors made by debt collectors include: 

• The Reporting of Inaccurate Information Related to an Account: In some cases, debt collectors report the wrong details—such as an incorrect balance, payment status, or even account number—to credit bureaus. It is a big problem because it can result in serious damage to a consumer’s credit score if the mistake is adverse. 
• The Failure to Update an Account that has Been Resolved: Once a debt has been paid in full or resolved through a settlement, a debt collector must report the updated status to credit bureaus. If they continue to report the account as delinquent, it misrepresents your financial history. Outdated reporting can unfairly lower your credit score. 
• The Re-Aging Old Debts (An Illegal Practice): Some debt collectors attempt to “re-age” a debt by changing the original delinquency date in order to make it appear newer than it is. It is an unethical tactic and an illegal practice meant to keep a negative item on your credit report longer than the FCRA allows. The age of the account must be accurate. 
• The Failure to Properly Investigate a Dispute: When you dispute any information related to a debt on your credit report with a debt collector, the FCRA requires that the entity (furnisher) conduct a reasonable investigation. An investigation should be both timely and comprehensive. Unfortunately, some debt collectors ignore disputes or fail to verify the accuracy of the information they have reported. 

What to Do If a Debt Collector Made an Error On Your Credit Report

Imagine that you have discovered inaccurate information on your credit report. A debt collection agency is the source of the error. It is important to take immediate action in order to assert your rights under the FCRA. Here are four key steps to take: 

1. Document It: Evidence is key to any FCRA claim. With that in mind, you should start by gathering all documentation related to the error, from copies of all your credit reports from all three agencies, to payment records, and any correspondence with the debt collector. You should also take screenshots or print copies of how the incorrect information appears on your credit file. The more details you have, the better positioned you will be to get justice. 
2. Notify Them: The FCRA empowers consumers to take action to compel a debt collector to correct erroneous information. As a general rule, you should send a written notice to the debt collector explaining the error and requesting correction. Be clear, concise, and include any supporting documentation that proves their reporting is inaccurate. The best approach is to work with an experienced credit report error attorney. When you give notice, that puts the debt collector on the clock to investigate the matter. 
3. Dispute It: Beyond notifying the debt collector, you can also dispute errors directly with all three of the major credit reporting agencies. As part of that formal dispute, you will generally want to include a written explanation and copies of relevant documentation. Notably, the FCRA also requires the credit agencies to investigate within 30 days. If the debt collector fails to verify the debt or update the information, the error must be removed. 
4. Follow Up: After the 30-day window, check your credit report to see if the issue was resolved. If the incorrect information remains, you may have the right to sue the debt collector for violating the FCRA. In some cases, the credit bureau may also bear liability for its failures. Do not go it alone: A top-tier consumer protection attorney can help you determine the best course of action to get your credit report corrected and to hold a debt collection agency accountable for violating your FCRA rights. 

Debt Collector Liability Under the FCRA: Inaccurate Information and Failure to Correct 

When is a debt collector legally responsible for violating the FCRA? As a general rule, there are two key elements that must be satisfied in order to bring a successful FCRA claim for compensation against a debt collector: 

1. An error was made, meaning the debt collectorwas reporting inaccurate information; and
2. After being notified, the debt collector failed to correct that incorrect information. 

That a debt collector made a mistake is not necessarily sufficient for a consumer to recover damages under the FCRA. The law requires you to provide proper notice of the error. Once that dispute is filed, the debt collector—acting as a furnisher—must conduct a reasonable investigation and correct or delete any inaccurate information. 

Understanding Your Remedies for FCRA Violations By a Debt Collector 

As noted previously, the FCRA includes a private right of action. That means that the law allows consumers to file a civil lawsuit against any party that violated their rights under the law. They do not have to wait for a regulator to take action. Here is an overview of the remedies that may be available to you if your FCRA rights were violated by a debt collector: 

• Actual Damages: To start, consumers have the right to seek compensation for real financial harm caused by the FCRA violation—such as denied credit, a rejected loan, or increased interest rates. You should carefully document your damages. 
• Statutory Damages: Notably, even without proving actual harm, consumers may recover $100 to $1,000 per violation for willful noncompliance with the FCRA. To qualify for statutory damages under the law, you must prove a wilful violation. 
• Attorneys’ Fees and Court Costs: If you win your case, the furnisher (debt collector) or credit bureau that violated your FCRA rights may also be required to pay your reasonable legal fees and litigation costs.

You May Also Have a Claim Under the FDCPA

The Fair Debt Collection Practices Act (FDCPA) is a federal law that regulates debt collectors. If a debt collector has reported inaccurate information to a credit bureau, your rights may be violated under not only the FCRA but also the FDCPA. The FDCPA prohibits debt collectors from using deceptive, unfair, or abusive practices when attempting to collect a debt. Misrepresenting the status of a debt—such as claiming it is still owed when it has been paid or settled—can qualify as a violation. If the false reporting is part of a broader pattern of harassment or misrepresentations, that could further strengthen your ability to hold a debt collector liable under the FDCPA. 

While the FCRA focuses on the accuracy of information provided to credit reporting agencies, the FDCPA governs the conduct of debt collectors directly. In other words, if a debt collection agency uses credit reporting as a way to pressure or mislead you into paying a debt, you may have two distinct legal claims. Both laws provide for damages, attorney’s fees, and potential statutory penalties. If you have any specific questions about your rights and your options under the FDCPA, our debt collector harassment attorney can help. 

How Consumer Protection Lawyer Richard H. Kim Can Help

Unfortunately, debt collectors can be very difficult to work with. Through carelessness, negligence, or even intentional misconduct, they could report inaccurate information about a debt that you (allegedly) owe to the three major credit reporting bureaus. Worse yet, when you notify them of the problem, they may not take appropriate action to correct it. You do not have to take on debt collectors alone. Richard H. Kim is a consumer protection attorney with deep experience handling FCRA cases. Our team is well-equipped to advocate for justice for consumers who have been the victims of unfair practices. Among other things, our credit report error lawyer is prepared to: 

• Conduct a comprehensive, confidential review and evaluation of your case; 
• Investigate the credit report error—helping you gather relevant evidence; 
• Take action to ensure that your credit report is corrected; 
• Hold the debt collector accountable for violating the FCRA; and
• Help you understand your options under other laws, including the FDCPA. 

Contact Our Credit Report Error Attorney Today

At The Kim Law Firm, LLC, our consumer protection lawyer represents clients with compassion, integrity, and drive to find the most effective solution. Debt collectors must be held accountable for errors. If your credit report has inaccurate information because of a debt collection agency, we are here to help. Contact us today for a fully confidential, no-obligation consultation.