Disputing Errors and Fraud

## Disputing Errors and Fraud If you find inaccurate information on your credit report, federal law gives you the right to dispute it and require the credit bureaus to investigate. The Fair Credit Reporting Act (FCRA) and the Fair and Accurate Credit Transactions Act (FACTA) are your primary legal protections. This lesson walks you through the process step by step. ### Your Rights Under the FCRA The Fair Credit Reporting Act guarantees you several critical rights: - **Right to accuracy:** Credit bureaus must follow "reasonable procedures" to ensure accuracy. - **Right to dispute:** You can challenge any information you believe is inaccurate or incomplete. - **Right to a timely investigation:** Bureaus must investigate your dispute within **30 days** (45 days if you provide additional information during the investigation). - **Right to removal:** If the disputed information cannot be verified, it must be removed. - **Right to a free report:** You are entitled to a free credit report from any bureau that takes adverse action against you, plus weekly free reports through AnnualCreditReport.com. ### Types of Disputable Errors You can dispute any information that is inaccurate, incomplete, or unverifiable: - **Accounts that are not yours** (mixed files or identity theft) - **Incorrect payment history** (payments marked late when they were on time) - **Wrong balances or credit limits** - **Incorrect account status** (showing open when closed, or vice versa) - **Duplicate accounts** (same debt listed twice) - **Incorrect personal information** (wrong name, address, or employer) - **Outdated negative items** (items that should have fallen off after 7 years) - **Unauthorized hard inquiries** (credit checks you did not authorize) ### The Dispute Process: Step by Step #### Step 1: Document Everything Before filing a dispute, gather your evidence: - A copy of your credit report with the error highlighted or noted. - Supporting documents: bank statements, payment receipts, correspondence with the creditor, identity theft reports. - A clear written explanation of what is wrong and what the correct information should be. #### Step 2: File the Dispute You can file disputes with each bureau through three channels: **Online (fastest):** - Equifax: equifax.com/personal/disputes - Experian: experian.com/disputes - TransUnion: transunion.com/credit-disputes **By mail (creates strongest paper trail):** - Write a dispute letter that includes your name, address, Social Security number, the specific item(s) being disputed, the reason they are wrong, and your requested resolution. - Include copies (never originals) of supporting documents. - Send via certified mail with return receipt requested. **By phone (least recommended):** - Equifax: 1-866-349-5191 - Experian: 1-888-397-3742 - TransUnion: 1-800-916-8800 **Important:** If the error appears on more than one bureau's report, you must file a separate dispute with each bureau. #### Step 3: The Bureau Investigates After receiving your dispute: 1. The bureau contacts the data furnisher (the company that reported the information). 2. The furnisher has 30 days to investigate and respond. 3. If the furnisher cannot verify the information, the bureau must remove it. 4. The bureau sends you the results in writing, including an updated copy of your report if changes were made. #### Step 4: Escalate if Needed If your dispute is denied but you believe the information is genuinely wrong: - **File a complaint with the CFPB** (Consumer Financial Protection Bureau) at consumerfinance.gov/complaint. The CFPB forwards complaints to the company and requires a response within 15 days. - **Dispute directly with the furnisher.** Under the FCRA, the original creditor must also investigate disputes sent directly to them. - **Add a consumer statement.** You can add a 100-word statement to your credit report explaining the disputed item. Lenders who pull your report will see it. - **Consult a consumer rights attorney.** FCRA violations can entitle you to statutory damages of $100-$1,000 per violation, plus actual damages and attorney's fees. ### Handling Identity Theft If you find accounts that were opened fraudulently in your name: 1. **File an Identity Theft Report** at IdentityTheft.gov (FTC). This generates a recovery plan and a formal affidavit. 2. **Place a fraud alert** with one bureau (it automatically applies to all three). This requires lenders to verify your identity before opening new accounts. 3. **Consider a credit freeze.** This blocks all new credit applications until you temporarily lift the freeze. It is free at all three bureaus. 4. **Dispute each fraudulent account** using your Identity Theft Report as documentation. 5. **File a police report** if there are significant financial losses. Under the FCRA, credit bureaus must block identity theft-related information within **4 business days** of receiving your Identity Theft Report and supporting documentation. ### Key Takeaways - You have a legal right to dispute any inaccurate information on your credit report. - Bureaus must investigate within 30 days and remove unverifiable information. - File disputes online for speed or by certified mail for the strongest paper trail. - For identity theft, start at IdentityTheft.gov to generate your official recovery plan and affidavit. - If a dispute is denied, escalate to the CFPB, the original creditor, or a consumer rights attorney.