What Is The Fair Credit Reporting Act And The Fair Debt Collection Act?


What is the Fair Credit Reporting Act?

The Fair Credit Reporting Act is the set of laws that create the rules and designate the responsibilities for credit reporting agencies. It creates the responsibilities for furnishers, which are the companies that provide the information to the credit reporting agencies. It provides mechanisms for consumers to correct improper information that are on credit reports.

Is It Easy To Fix An Error On My Credit Report; What Are Generally The Biggest Obstacles?

In some cases, it can be easy to correct an error on the credit report. In 2012, the FTC conducted a study of about 1,000 participants in order to evaluate the effectiveness of the mechanisms that the law has to correct a credit report. Those mechanisms are found under the Fair Credit Reporting Act. There are around 100,000,000 people that may have some error in their credit report. Through the FTC study, they found that of the individuals with errors on their report:

  • 20% of them would be immediately corrected with a dispute letter
  • 60% would see some sort of alteration to their credit report, but would not see a full remedy
  • 20% would see no change at all. 

So in some circumstances, just filing a dispute letter may be sufficient to correct an error on a credit report. However, the majority of the time, some further action is needed, which can include the filing of a lawsuit. 

Why Isn’t Hiring A Credit Repair Company Enough Or Is It Even The Right Step To Ever Take?

Hiring a credit repair company should be approached with caution. First, be mindful that the tools that credit repair companies use are tools that are available to consumers at no cost, in terms of filing dispute letters. Also be aware of the practice that some credit repair companies use, in which they dispute all negative activity on a credit report, whether it is objectively erroneous or not. This approach in some circumstances could be a fraudulent activity. Finally, credit repair companies are not licensed to practice law. If there is an error that is not corrected through a dispute process, they are not in a position where they can file a lawsuit to appropriately address the issue. For that reason, if there has been a negative impact as a result of the improper reporting, then they will not be in a position to seek a recovery on behalf of the consumer.

If The Dispute Cannot Be Properly Resolved, At What Point Do I Actually Go Ahead And File A Lawsuit?

Timing for a lawsuit is an issue that a consumer would want to discuss with the attorney that’s handling the case. But in short, if the dispute has not resulted in appropriate resolution of the improperly reported information, that would be the trigger point to file a lawsuit.

At What Point In A Credit Reporting Error Case Does Your Firm Typically Step In?

We welcome the opportunity to consult with consumers from the very beginning of identifying a credit reporting error; even if the consumer is trying to determine whether the information is erroneous to begin with. Credit reports can be difficult to read and, for many consumers, even figuring out whether there is an error on a credit report to begin with can be a difficult task. We’re happy to review a credit report with the consumer at no cost so that we can evaluate whether there are errors within the report. We would be happy to serve the consumer from the beginning.

Will My Credit Report Ever Be Completely Error Free?

Credit reports absolutely should reach a point where they are totally error-free. In fact, that is one of the most important goals of assisting with erroneous credit reports. It may take several steps to get there, but it’s certainly an obtainable goal.

What Is the Fair Debt Collection Act?

The Fair Debt Collection Act, more technically known as the Fair Debt Collection Practices Act, is the set of laws that apply to debt collectors, which talks about the rules by which they can collect on debts. 

The Fair Debt Collection Practices Act, otherwise known as the FTCPA, is a federal law that protects consumers from over-aggressive debt collection. This law can be broken down into a few different components: 

Definition of Debt Collectors

The FTCPA restricts debt collectors, which are specifically defined under federal law. In most circumstances, a debt collector is not going to be the company that originated the debt. It’s not going to be your credit card company or your initial mortgage company – it’s going to be a company that is specifically focused on collecting on the debt after it’s falling behind.

Restricting Certain Types of Conduct

In general, the FTCPA does two basic things. First, it provides regulation and assurances that debt collection companies are giving you accurate information and adequate information, so that you can identify who they are and what the debt is. A debt collection company should not tell you that you owe $20,000 if in fact, you owe $10,000. They should be forthright if you have debt that has exceeded the period of time that the debt can be collected upon, usually referred to as the statute of limitations. All of this information has to be provided transparently.

The other thing that the FTCPA does is it protects against harassing conduct. A debt collector shouldn’t be contacting the third parties about your debt. They shouldn’t be calling you at odd hours of the night. They shouldn’t be contacting you incessantly, particularly if you’ve asked them to stop. They should be collecting with decency. We’ve decided as a culture that we are past the point of time where debt should be collected by a very large person with a crowbar who’s standing in front of your doorstep. Instead, we’ve decided that that debt should be collected with a grain of respectability. If those boundaries have been exceeded, then a consumer may be entitled to compensation, even if they owe money. If you have questions about whether collection in your circumstances has exceeded your boundaries, click to the side to schedule a complimentary consultation with one of our qualified attorneys.

Therefore, in a nutshell, it says that even when the debt is owed, there are boundaries of reasonableness that we as a society have agreed to, which say, “Yes, you can collect on a debt, but you can’t go calling everybody that I know saying that a debt is owed or you can’t be calling me 20 times a day in a harassing manner and try to collect on the debt, or you can’t say things that are just absolutely false and threaten arrest or other unlawful means to encourage the collection of the debt.”

Contact the attorneys at Ziegler Diamond Law: Debt Fighters in Florida for a free case evaluation today. Attorney Mike Ziegler founded our law firm on the principles of professional quality and personal care. Get the information and legal answers you are seeking by calling (727) 538-4188 today.

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