Consumer protection

Credit Reporting Errors & Identity Theft

Credit reporting and background check errors are incredibly frustrating and can have a significant impact on your life. Accuracy is essential to loan approval, reasonable insurance rates, and employment prospects. Yet errors in credit reports and background checks are becoming all too common. To combat this problem, the Fair Credit Reporting Act (FCRA) was created to protect people from identity theft, inaccurate information on their credit report and unlawful or unauthorized disclosure of the credit reports. The FCRA works like this:

Individuals are entitled to a free copy of their credit report directly from Equifax, Experian, and TransUnion (the “CRAs” or credit reporting agencies) once every 12 months. We recommend obtaining them via www.annualcreditreport.com. If denied credit, you are also entitled to a free credit report within 60 days of the credit denial from the credit reporting agency that provided your credit information to the potential creditor. (The specific credit reporting agency will be listed on the notice or letter that you receive from the creditor that denied your credit application.)

If inaccurate information is identified in a credit report or background check, or the credit report reflects inquiries made without their permission, a consumer may dispute it in writing to the credit reporting agency who is reporting it. As soon as they have been notified of an error, the credit reporting agencies are required to investigate the mistake, notify the source of the information in dispute, and take corrective action.

Failure to correct or remove inaccurate information following written notice is a direct violation of law. If you have been denied employment, credit, or your buying power has been damaged by inaccuracies on your credit report or background check, you may have the right to seek a claim.

Inaccurate Credit Reporting

It is relatively common knowledge that the CRA’s collect information about you, including information about your employment, where you live, and whether you pay your bills on time. But what many people do not know is they also collect information about whether you have been arrested, sued, filed for bankruptcy, and who is obtaining your credit information. All of this information goes into reports both used to assign you a credit score and sold to third parties including your prospective creditors and employers. Often, when this information is inaccurate, your credit score and reputation is harmed. Examples of common credit reporting related inaccuracies include:

• False credit information and payment delinquencies caused by an incident of identity theft.
• Payments being reported as late when they were not.
• Information from another person’s credit showing up on your report. This is often referred to as a “mixed file” problem.
• Unauthorized credit “inquiries” or hard pulls.
• Inaccurate status reporting of debts following successful completion of bankruptcy.

Identity Theft

Identity theft poses a unique and all too common problem in the world of credit reporting. Today’s financial environment is reliant upon almost entirely electronic transactions with far too little manual oversight. Thus, anyone could risk being a victim of fraud, credit card fraud, false impersonation or identity theft. But these situations are not only limited to the realm of data breaches and credit card “skimming” operations. Other common examples unfortunately include:

• Someone close to you, whether a sibling, former spouse, ex-partner, or simply a “friend” using your personal information to obtain or refinance a loan in your name.
• Dishonest workers who have access to sensitive information.

Inaccurate Background Checks

Getting a job has never been more complicated than it is now. Potential employers want to review your credit, your work history, and a background check. In turn, background checks can include your credit profile, criminal record, driving record, employment history, and education credentials. Generally, only those aspects that are relevant to the particular opportunity are included in the report. In the context of truck drivers, this often includes a review of a DAC report (which can obtained for free at https://www.hireright.com/Disputes/Report.aspx ). Unfortunately, mistakes in these reports are common and can result in employment being denied and termination. In some cases, workers aren’t even told that much and must try to piece together what happened without any help from the company. Examples of these inaccuracies include:

• A long distance truck driver notifies their current employer of their intention to take employment elsewhere. The driver quits with a satisfactory work record. However, the new employer obtains copy of DAC report that suggests that driver was terminated for cause or had log violations.
• An individual is employed by Uber as a driver for several years when the company obtains a background report from a third party. The report erroneously states her driver’s license was “disqualified.” In truth, her driver’s license was valid and in good standing (the only license required for ride-sharing work), but she had previously allowed her commercial driver’s license to lapse. Nevertheless, the reporting resulted in her being deactivated with Uber and a host of financial problems.
• The reporting of criminal charges or convictions that have been expunged.
• The reporting of criminal charges committed by a third party, including without limitation an identity thief and individual with the same name.

When a background check’s inaccurate or intentionally misleading information costs you a job, you have the right to push back. If the company won’t change their records, you may have to pursue civil action against them. Potential outcomes could include updating your record or even obtaining compensation for lost income.

Experience

Our consumer protection practice group is unique in that few lawyers in Indiana, Illinois, or Wisconsin practice in this area of the law. For that reason, we maintain a statewide practice and have significant experience handling matters on behalf of individuals and business owners residing in and around Fort Wayne, South Bend, Bloomington, Evansville, West Lafayette, Carmel, and Crown Point. This includes representing clients in matters litigated in both state and federal court.

For more information about the Firm’s consumer protection practice, please contact Travis W. Cohron.