If the conduct (mis-conduct) of the furnisher (the one who gives the information) or the credit reporting agency (Equifax, Experian, Trans Union, etc) has actually harmed you, then the FCRA allows you to recover damages to compensate you for your loss. This loss or damage can be in the form of emotional distress (mental anguish) or it can be loss of a job or loss of a mortgage (i.e. you missed out on a house because of false credit reporting), etc.
This ability to be compensated for your actual damages is a very powerful and wonderful tool that can help you piece things back together after suffering through a bad situation with false credit reporting.
Second Benefit - Attorney Fees And Costs
Sometimes the amount of damages you can recover is not enough to pay for your attorney's fees but Congress has allowed you to recover attorney's fees and costs if you are successful in your case. This is critical to allowing you to hire competent and experienced attorneys.
It also provides an incentive for the defendants to settle with you so they do not have to pay high attorney's fees. For example, this year (2010) I have received two fee awards from federal judges who have said that my fair and reasonable hourly rate is $350. If a defendant wants to file bogus motions and make me do a lot of silly work, there is a price to be paid for this.
Third Benefit - Statutory Damages
If the conduct of the defendants was intentional, then you can receive up to $1000 per violation in what are known as statutory damages. These are damages that are awarded even if you have not suffered actual damages. Instead these damages are to encourage you to bring suit against law breakers and to encourage the law breakers to start following the law.
Fourth Benefit - Punitive Damages
Similar to statutory damages, if there is willful (or wanton) conduct, the judge or jury can award punitive damages. These damages are to punish the wrongdoer. And to discourage the wrongdoer and similar companies from doing this same or similar type of misconduct. In the FCRA context, this has been as high as 80 times the amount of other damages awarded but more typically it will not exceed 3-5 times the actual damage award you receive.
The furnishers and credit reporting agencies should always have a chance to correct any errors since you must dispute it first (see weblink below). So . . . if they don't correct it after you dispute it . . . particularly if you dispute it multiple times . . . then filing a lawsuit is certainly justified. The FCRA is designed to make it possible for you to recover damages and to punish the wrongdoer if the misconduct was intentional. Attorney fees are also provided so you can hire a lawyer even if you don't have a high actual damage award and to also encourage the law breakers to quickly resolve cases.
Bottom line - the FCRA is very powerful and gives you four important benefits.
Let me know if you have any questions about the benefits of the FCRA.
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