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Consumer Credit Laws

There are two main laws which protect the consumer from inaccurate and unverifiable credit reporting. These two laws are the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA). Creditors and credit bureaus (Experian, Equifax, and Trans Union) are legally obligated to produce documented evidence within a reasonable amount of time, generally 30 days, to back the claims they make about you. If the credit bureaus cannot validate their claims, they must promptly remove any undocumented information from your credit report or they can be liable for damages.

The FCRA was passed in 1972 in order to curb the abuses on the credit reporting bureaus. The main reason this law was passed is credit bureaus could reap large profits, but were not required to keep accurate records. In fact, the Charles Givens Organization recently conducted a study in which 90% of the credit reports still contained errors. The United States Public Interest Research Group found that 70% of all credit reports contained errors. The full text version of the FCRA law can be found here. The FCRA includes the following two important parts of the law:

    "Whenever a consumer reporting agency prepares a consumer report, it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates."
    "If the completeness or accuracy of any item of information contained in his file is disputed by a consumer, and such dispute is directly conveyed to the consumer reporting agency by the consumer, the consumer reporting agency shall within a reasonable period of time reinvestigate and record the current status of that information unless it has reasonable grounds to believe that the dispute by the consumer is frivolous or irrelevant. If after such reinvestigation such information is found to be inaccurate or can no longer be verified, the consumer reporting agency shall promptly delete such information. The presence of contradictory information in the consumer's file does not in and of itself constitute reasonable grounds for believing the dispute is frivolous or irrelevant."

The FDCPA was passed in 1978. Its purposes are to eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an avenue for disputing and obtaining validation of debt information in order to ensure the information's accuracy. The Act creates guidelines under which debt collectors may conduct business, defines rights of consumers involved with debt collectors, and prescribes penalties and remedies for violations of the Act. The full text version of the FDCPA law can be found here

It is imperative that consumers understand that all of the credit bureaus are private businesses not public governmental entities. The credit bureaus are for profit companies that make money selling credit reports to banks, finance companies, and retailers. Credit Bureaus are nothing more than record keepers. They keep a record of who has given you credit, when they gave you credit, and whether or not it was paid back on time. They own large database computers capable of storing credit information on every individual in the United States. However, due to the sheer volume of information stored and generated on a daily basis their records contain numerous errors. Credit bureaus only make money on selling information, they lose money when they are required to research disputes on your records. Therefore, by using many of their own stalling and intimidation techniques they try to make the dispute process as painful as possible.

The proven strategies and techniques we employ in our dispute process enable us to cut through the red tape and intimidation to generate lasting results for our customers. Sign up now or contact us today to start your credit restoration.