There are 2 collection companies (junk debt buyers) who are reporting information on my credit report to all three credit reporting agencies. I mailed both C.A's a validation of debt letter which they have not responded to. Both accounts are past the statute of limitations in California for consumer debt (4 years). If a creditor is incorrectly reporting information on my credit report which negatively affects my credit score, do I have recourse under the Fair Credit Reporting Act (FCRA) .? I was told this type of case is fee shifting which means that you should not have to forward any attorney fees, and my attorney will receive his/her payment from the offending party; if successful, I may be entitled to up to $1,000.00 dollars in statutory damages and/ or actual damages.
P.S: I do not have a civil judgment with either one of the reporting collection companies.
I am not licensed in California, but I handle credit reporting and debt/collection issues in the states where I am licensed and this is a federal law issue in part - federal law is the same in all the states.
You confuse the Fair Credit Reporting Act (FCRA) with the statute of limitations. The statute of limitations is governed by state law. It is a defense that you raise in court IF you are sued. It has nothing to do with how long a debt can remain on your credit report. The statute of limitations appears to be 4 years in California, assuming this is a California debt and there are no other issues (tolling or revival of the debt for example). The statute of limitations generally runs from the date of the last payment or when the last payment was made. Here is a link to a handy chart: http://www.creditcards.com/credit-card-news/credit-card-state-statute-limitations-1282.php. However, please confirm this information with a California attorney. Some states take the approach that a debt collector can sue after the statute of limitations and that its up to the debtor to timely assert the defense. In other states, the courts are tired of getting clogged with these lawsuits and now prohibit a debt collector from bringing suit when the action is barred by the statute of limiations. Ask the California attorney which approach California takes.
Under the federal debt collection laws, negative information, if accurate, can stay on your credit report for 7 years from the date of charge off or when the debt is first sent for collection. It is about 7 1/2 years from the date of last payment.
If you timely disputed a debt with the credit bureaus under FCRA, the furnisher (here the junk debt buyer or collection agency for the junk debt buyer) has 30 days to investigate. After 30 days, if the debt is not verified, then the credit bureau is to remove the disputed item. The "investigation" is hardly that. The credit bureau gets your letter of dispute and asks the junk debt buyer if the information is accurate. If the junk debt buyer says it is, that is the end of the duties of the credit bureaus. The next step then is to dispute the item with the junk debt buyer.
You also have 30 days to dispute the debt with the collection agency under the Fair Debt Collection Practices Act (FDCPA). They do not have to validate the debt. Nor do they have to validate in a set time period. Junk debt buyers sometimes have to get the validation from the original creditor and that costs money and sometimes takes 45-60 days.
The question is whether the junk debt buyer/collection agency continues to try to collect the debt without validating or whether they tell you what they are going to do after you dispute. The collection agency can only tell you the truth about what action it legally intends. For example, the junk debt buyer cannot threaten a lawsuit if it cannot file one. They also cannot continue to call you while waiting for the validation.
Bottom line - negative information can stay on your report for 7 years from the charge-off date, so a debt can stay on your report past the statute of limitations. If you have disputed the information with the credit bureaus and furnisher of the information and they refuse to provide validation, this may be a FCRA violation. Again, talk to an attorney specializing in FCRA/FDCPA violations in California. You are correct about the attorney fees - if successful, you can recover actual damages or up to $1000 per violation, depending on if it was willful or not and attorney fees.
Chapter 13 Bankruptcy Attorney
You have no private right of action under the FCRA. Just write dispute letters to the credit bureaus, all three of them.