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Consumers, courts starting to take notice of credit reporting errors

Aug 05, 2013 Quinn Thomas

Across the country, individuals are beginning to pay closer attention to their consumer credit reports after many have been found to include errors. An inaccurate report can negatively affect a person's ability to obtain a loan if the score is brought down as a result. In many of these instances, affected consumers have a right to file lawsuits that they are likely to win.

CBS News recently reported that a woman in Oregon - Julie Miller - won an $18 million lawsuit against a credit reporting agency after the firm failed to address inaccuracies on her report, despite being contacted repeatedly by Miller. The source stated that this has become a trend in the United States, as more consumers are aggressively addressing these mistakes with sympathetic help from the courts.

Recent changes to the Fair Credit Reporting Act (FCRA) have provided for a more regulated landscape for reporting firms to navigate. In particular, the new stipulations require agencies to be more careful when creating reports in order to avoid errors. For this reason, litigation surrounding the industry is spiking.

For industry firms, it's crucial to provide accurate reports. Although the sector is extremely professional and offers great services, mistakes inevitably happen. However, the legal precedents being set show that these enterprises need to seriously consider how they create reports and how they train their employees.

Training and new practices
With the FCRA changing, it's necessary for all professional in the industry to understand the specific guidelines within the act. Regular testing and mandatory review classes for agents could go a long way to reducing the number of reporting errors that are made.

Practices relating to investigating credit histories may also require a change. In Miller's case, information from a woman with the same name was included on her report, despite the other female having a different birth date and Social Security number. This shows that it's important for all reporting professionals to double check that an outstanding debt or late payment is indeed owned by the party they are investigating. This could require a slower process to be adopted by the industry, but it should provide for more accurate reports overall.

Cases similar to Miller's lawsuit are likely to increase, as media and news outlets such as Auto Credit Express continue to warn people about erroneous consumer credit reports. With increased scrutiny, reporting agencies will need to be proactive to change the industry for the better.