Willful Violation of the FCRA: What it is, Why it Matters, and What Damages are Available

By The Kim Law Firm, LLC

If a credit bureau or furnisher has refused to correct an error on your report, an FCRA lawyer can review the file at no cost and tell you whether the violation was willful.

The short answer

An FCRA violation is a failure to do something the Fair Credit Reporting Act requires — by a credit bureau, by a company that reports to the bureaus, or by a company that pulls or uses a report. Not every error on a credit report is a violation; the Act is violated when a company with a duty under it does not carry that duty out. And the question that decides what a case is worth is not how large the error was but whether the failure was negligent or willful. A negligent violation pays your actual damages and your attorney’s fees. A willful one adds statutory damages of $100 to $1,000 per violation, whether or not you can prove a loss, and opens the door to punitive damages. This page is about that line: which failures are violations, what makes one willful, and what each category is worth.

The violations that actually get sued

The Act gives different companies different duties, and the cases I bring fall into a few recurring shapes.

The bureaus — Equifax, Experian and TransUnion. They must follow reasonable procedures to assure the maximum possible accuracy of what they report; they must reinvestigate a dispute within 30 days (45 if you send more documents during the dispute), forward it to the company that reported the item, and delete what cannot be verified; they must not report most negative items past seven years (ten for a Chapter 7 bankruptcy); and they must not put a deleted item back without certifying it is accurate and telling you. The violations that follow: a “verified” result on a dispute nobody investigated; a file mixed with someone else’s because the bureau matched on a partial name or number; a collection re-aged so it outlives the seven-year limit; a deleted account that reappears; a report reading “deceased.”

The furnishers — lenders, servicers, collectors, landlords and screening companies that report to the bureaus. Once a dispute reaches a furnisher through a bureau, it must conduct a reasonable investigation, review everything the bureau sent, and correct or delete what it cannot verify. The lawsuit for breaching that duty is triggered by the bureau’s notice — which is why the dispute always goes to the bureau as well as to the company. The violations: a paid or settled balance still reported as owed; a discharged debt reported with a balance; a payment reported late during a forbearance the servicer itself granted; a disputed account reported without the dispute noted; an account that was never yours verified as yours.

The users — employers, landlords, insurers and lenders that pull reports. They may obtain a report only for a permissible purpose; an employer must get your written authorization before a background check and must give you a copy of the report and a summary of your rights before acting on it; anyone who denies you credit, housing, insurance or a job because of a report must tell you so and name the company that supplied it. The violations: a credit pull with no permissible purpose; a job offer withdrawn without the pre-adverse-action copy; a denial letter that never names the reporting company.

Before you can sue: the dispute record

Almost every FCRA case against a bureau or furnisher rests on a dispute that was made and mishandled. Disputes can be made online, but a written dispute sent with proof and kept with its delivery record is the version that holds up, because the case will turn on exactly what the company was told and when. Send the bureau the specific error, the documents that prove it, and a copy of the report entry; send the furnisher the same packet. The response you receive — or the silence — is the evidence. The figures below are why keeping that record matters.

How common are credit reporting errors and disputes?

Credit Reporting Agencies and Furnishers May Be Liable for an FCRA Violation

Through an FCRA claim, a consumer may be able to hold a credit reporting agency and/or a furnisher (creditor or debt collector) legally liable for an error. To be clear, a credit bureau is not automatically liable if an error shows up on your credit report. However, they can be held liable if they fail to correct that mistake in a timely manner after you have provided proper notice. Some common examples of credit report errors include: 

• Incorrect Payment Status: Payment status is one of the primary factors in determining your credit rating. Unfortunately, mistakes can happen. An account that is current could be marked as “past due” by nothing more than a simple error.  
• Mixed File Error: Mixed file mistakes are frequent. They happen when the information belonging to someone with a similar name—or Social Security number—is merged into your file due to an error. 
• Identity Theft: Unfortunately, identity theft is a serious problem. You should not be held responsible for theft. You are the victim. If a fraudulent credit card opened in your name remains on your report even after you submit an identity theft affidavit, that is a problem. 
• Deleted Data Coming Back Without Just Cause: In some cases, consumers deal with an issue where a debt that was removed after a successful dispute reappears because the furnisher resubmitted it without the legally required “certification of accuracy.”
• Outdated Negative Information: Nothing remains on a credit report forever, even a personal bankruptcy. A paid tax lien, collection account, or civil judgment staying on the report beyond the reporting window is an error. 
• Duplicate Collections: When debts go into collections, they can get sold off to third parties—often several times. An error can occur when this happens where the same debt will be listed more than once on a consumer’s credit report. 

What to Know About Willful Violations of the FCRA

Credit bureaus, agencies, and information furnishers can be held liable for violating the Fair Credit Reporting Act. Notably, the law distinguishes between violations and willful violations. Under federal law (15 U.S.C. § 1681o), a consumer can seek FCRA damages from a party for a negligent violation. That is defined as a violation caused by the defendant’s failure to use reasonable care. Federal law (15 U.S.C. § 1681n) allows for the recovery of additional damages if the FCRA violation was “willful”—which occurs when the defendant either knowingly and intentionally violated the FCRA or acting with reckless disregard for the law. Here is an overview of damages: 

• Negligent FCRA Violation: With a negligent FCRA violation, an affected consumer can seek compensation for the full extent of their actual damages and for attorneys’ fees/legal costs.  
• Willful FCRA Violation: With a willful FCRA violation, a consumer can seek all aforementioned damages (actual losses and attorneys’ fee) and additional compensation in the form of statutory damages and, potentially, punitive damages. 

How much are FCRA statutory damages?

FCRA statutory damages are set by the statute itself at not less than $100 and not more than $1,000 per violation, and they are available only under 15 U.S.C. § 1681n — that is, only where the violation was willful. A negligent violation under § 1681o carries no statutory damages at all; there, a consumer recovers actual damages plus attorneys’ fees. That is why willfulness, rather than the size of the error, is usually what decides what an FCRA case is worth.

Three practical points follow. Statutory damages are awarded per violation rather than per lawsuit, so a report that went out inaccurate more than once can carry more than one award. A willful violation also opens the door to punitive damages, which the statute does not cap. And statutory damages do not depend on proving out-of-pocket loss — the Eleventh Circuit reaffirmed in 2023 that a consumer can recover them for a willful violation without proving actual damages. In either category, the FCRA shifts the consumer’s attorneys’ fees and costs onto the defendant on a successful claim.

What makes an FCRA violation “willful”?

In the 2007 case of Safeco Ins. Co. of America v. Burr, 551, the Supreme Court of the United States set the standard for what constitutes a willful violation in an FCRA case. The litigation at issue started out as a separate class action lawsuit against GEICO General Insurance Company and Safeco Insurance Company of America. Notably, both insurance companies used credit‑based insurance scores in order to price auto liability policies. That is a practice that is permitted under federal law only if the insurer sends a written adverse‑action notice if a consumer’s credit report has caused them to receive a less favorable policy rate. Here are the two big issues: 

1. GEICO Case: GEICO gave applicant Sergio Edo its second‑best rate tier. Because the company alleges that Mr. Edo would have received exactly the same price if his credit data had been “neutral” instead of “adverse,” GEICO decided no written notice was required.
2. Safeco Case: Safeco automatically assigned its initial applicants a mid‑level tier unless they had an exceptionally high credit score. Two applicants (Mr. Burr) and (Mr. Massey) alleged that they were silently placed in a pricier tier because of their credit and never notified.

In other words, both the GEICO class action case and the Safeco class action case had a similar underlying legal issue. Applicants were given a less favorable policy rate because of information on their credit report, but were never provided with any written notice to that effect. The district courts sided with the insurers. However, the Ninth Circuit reversed. 

The cases eventually merged and made their way to the Supreme Court. One of the key issues before the nation’s highest court was what constitutes a “willful” violation of the FCRA. The Supreme Court held that a “willful” violation covers conduct that is either 

1. Intentional in violation of the FCRA’s requirements; or 
2. In reckless disregard of the FCRA’s requirements.

These are highly fact-specific cases. As a consumer who is preparing to take legal action against a credit agency, a creditor, a debt collector, or any other party for a willful FCRA violation, it is imperative that you have strong evidence to prove they intentionally or recklessly breached the law. 

A Willful FCRA Violation Can Lead to More Serious Penalties

Were you the victim of an error on your credit report? You have the right to seek compensation for your damages. It is important to remember that additional damages can be sought if you can prove that the FCRA violation was “willful” in nature, either due to being intentional or with reckless disregard. Through a willful FCRA violation case, you may be able to recover compensation for: 

• Actual Damages (No Limit): Actual damages are the basis of any FCRA claim, including for a willful violation case. When a consumer proves a willful violation of the FCRA, they may recover uncapped “actual damages.” The core purpose of actual damages for the victim is to reimburse every reasonably foreseeable loss tied to the erroneous credit reporting. Along with other losses, you may be entitled to recover actual damages for any out‑of‑pocket costs paid to dispute the error, lost wages from a rescinded job offer, higher interest rates, higher insurance premiums, the denial of housing, and emotional distress proven with supporting evidence.
• Statutory Damages ($100 to $1,000 Per Violation): If you can prove a willful FCRA violation, you also have the right to seek compensation for statutory damages. Indeed, federal law has a built‑in damage range to eliminate the need for consumers to quantify every dollar of loss. If a violation is willful, a plaintiff may elect statutory damages between $100 and $1,000 for each violation.  Courts have interpreted “per violation” broadly, sometimes counting each inaccurate item or each unlawful disclosure separately. 
• Punitive Damages (Egregious Conduct): Although a limited remedy that is not available in every case, courts can also award punitive damages for a willful FCRA violation. Punitive damages are discretionary: Judges/juries award them only when evidence demonstrates that the defendant’s practices were so egregious that mere compensation would be insufficient deterrence. The amount of punitive damages, if any, awarded will depend on the egregiousness of the defendant’s violation of the FCRA. Whether punitive damages are in play is a judgment made from the record — what the company knew, when it knew it, and what it did anyway.  

The Bottom Line: An FCRA violation is a serious matter, especially so if you were subject to a willful violation. It can cause serious financial harm. You have the right to hold the responsible party legally liable for the full extent of your actual damages. Further, if you can prove you were the victim of a willful violation, you may also be able to recover for statutory damages and even punitive damages. An experienced credit report error lawyer can help you seek justice. 

The clock

An FCRA claim must be filed within two years of the day you discovered the violation, and never more than five years after it happened. The discovery date is usually the day you saw the report after a dispute with the error still on it, or the day a denial letter told you a report was the reason. Willfulness is proved from the company’s own records — its dispute logs, its procedures, what its representatives were told — and those records are easier to obtain while the case is young.

What I do with a willful-violation case

I review the report, the dispute and the response at no cost and tell you which category the failure falls into. If the violation is willful, the case is brought for actual damages, statutory damages and, where the record supports it, punitive damages; if it is negligent, for actual damages. In either case the Act shifts the attorney’s fees to the defendant when you win, which is why I take these cases on contingency: you pay nothing unless we win. Admitted in Pennsylvania and New Jersey; available to appear pro hac vice in other federal courts.

Every deadline and dollar figure in the Act, with its section number, is collected on one page: FCRA by the Numbers.

Sources: 15 U.S.C. §§ 1681b, 1681c, 1681e(b), 1681i, 1681m, 1681n, 1681o, 1681p and 1681s-2 (United States Code); Safeco Insurance Co. of America v. Burr, 551 U.S. 47 (2007); Consumer Financial Protection Bureau, A Summary of Your Rights Under the Fair Credit Reporting Act.