Appeals Court Says Inaccurate Credit Reports May Violate Debt Collection Laws
Credit reports are typically used by potential creditors to assess consumers’ creditworthiness and evaluate whether to extend new credit to them. If an account from a debt collector is being reported as delinquent, the new creditor may refuse to extend credit.
Credit reporting is a common method of debt collection. “Debt collectors use the reporting mechanism as a tool to persuade consumers to pay, just like dunning letters and telephone calls,” wrote the court. When inaccurate information being reported, it may coerce the consumer to pay the account anyway, even if nothing is owed. It is a violation of the FDCPA for a credit to misstate the amount owed, who it is owed to, or to commit unfair or deceptive acts in connection with debt collection.
Therefore, even if the debt collector is not directly attempting to collect from the consumer such as by making collection calls or sending dunning letters, a court can consider the debt collector as engaging in debt collection.
Consumers should check their credit reports regularly to ensure that inaccurate information is not being reported. If you have inaccurate information, our office can provide a no-cost consultation about your rights.
The decision is here: McIvor v. Credit Control Services
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