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The solution to the particular problem reported in TFA is simple and obvious: allow people to sue credit reporting agencies for damages if they report false inf
by lisper 4y ago
The solution to the particular problem reported in TFA is simple and obvious: allow people to sue credit reporting agencies for damages if they report false information. You will be amazed how fast these things will get resolved if that reform is adopted.
Of course that won't happen because regulatory capture, but let's not wring our hands and pretend that this is a fundamentally difficult problem. It's not.
- refurb 4y agoWhy not just sue them in small claims court for some small monetary damages right now? You can do that, people rarely do.
- lisper 4y agoIt's complicated. The Fair Credit Reporting Act gives agencies very broad latitude to blame mistakes on the parties that furnished the information, and the resulting legal situation is a mess [1]. As a practical matter, you can bring such a suit, but your odds of prevailing on the merits are indistinguishable from zero. [1] https://www.courthousenews.com/high-court-wont-review-immunity-under-credit-reporting-law/ https://www.courthousenews.com/high-court-wont-review-immuni...
- refurb 4y agoUnderstood. But just like suing a large firm, when sending a $1000/hr corporate lawyer to small claims court, it makes more sense to just settle quickly.
- lisper 4y agoLawyers are not usually allowed in small claims court. But I'm pretty sure that all of the credit reporting agencies have a trained staff of non-lawyers who are nonetheless sufficiently well versed in this particular aspect of the law to destroy any prospective plaintiff.
- tssva 4y agoSmall claims courts are not intended to force defendants to give up their right to be represented by legal counsel; therefore, once served defendants usually can file to automatically have the case moved out of small claims where they can be represented by legal counsel.
- londons_explore 4y agoThey're also a good way to 'bluff' by moving the case to an expensive court with lengthy and expensive processes, that you know the court costs will massively outweigh any potential judgement. In that case, as claimant, it's usually in your best interests to give up when you're risking millions of dollars of legal fees to probably win $200.
- tyingq 4y agoSmall claims court usually requires a very concrete definition of damages, things you can show in a receipt, invoice, estimate, etc.
- smitty1e 4y agoThe fact that we have zero politicians of any stripe running on actual reform platforms is all one need know about politics.
- SpicyLemonZest 4y agoI’m not sure that sends any real lessons beyond the fact that credit scoring isn’t a top political concern for many voters. There were bills introduced to reform the system in 2016 and 2021.
- smitty1e 4y agoThat Elizabeth Warren thing is the opposite of what's needed. Teaching budgeting in schools would be a good start.
- lelandfe 4y agoThose most affected by incorrect credit scores will have no financial ability to sue a multibillion dollar credit agency. Those with the financial ability will have little incentive to do so.
- Maakuth 4y agoIsn't that what class action suits are for?
- Frost1x 4y agoHow do you class action "my specific credit report is false because of this specific information." There needs to be a third party regulatory agency with real teeth where you don't need a pile of money to refute claims, just a little time for the regulatory agency to pressure them on your behalf. The courts aren't it although they probably should be. The problem with our legal system is that in large part pointed out by GP, there's often a financial correlation in just how much you can utilize it which makes it ripe for exploitation by those with piles of capital laying around.
- zie 4y agoYou are right, in an individual case like that, it's hard to make it a class action, but I'm sure there are plenty of cases where they get some bad data from some vendor, and then promptly update 100k accounts with this bad data. Well that's 100k class action participants. :)
- dvtrn 4y ago> There needs to be a third party regulatory agency with real teeth The CFPB could probably use sharper teeth
- swat535 4y agoRight and how did it out ended up working in case of the Equifax breach? "Class actions" achieve very little; the only thing they do is make lawyers wealthier and if by some miracle the case succeeds, everyone else will get a 5$ coupon. Real change requires changing laws by the democratic process and that can only happen when the population unites to hold the government strongly accountable. I would argue that any other solution is a bandaid.
- kome 4y agoOr just regulate credit better.
- tyingq 4y agoThere's also the issue of various creditors giving them bad information. I don't know how successful you might be suing a credit reporting agency if they were given bad info by some debt collector.
- eberkund 4y agoCredit reporting agencies are publishers of information. Publishers have editorial responsibility for the information they distribute, the excuse that they were given bad info by some random tipster doesn't hold up.
- IncRnd 4y agoThe FCRA already is a law that governs credit reporting agencies. Given that, are you sure they are publishers in the manner you imply?
- tyingq 4y agoI'm not understanding how that works exactly, outside of very basic vetting that things like name, ssn, etc, match up. A fair amount of disputes, for example, are identity theft. The loan company sharing into with a credit reporting agency would be supplying data that looked right.
- deleted 4y ago[deleted]
- gruez 4y agoDo you think hacker news should be sued for inaccurate information posted by its users?
- ascagnel_ 4y agoHacker News allows basically any user with an account to submit posts and comments, and generally do not deal with data that has a material impact on others; there is no financial or contractual arrangement between HN and individual users beyond a standard ToS and moderation. Credit ratings bureaus enter into contractual agreements with both data suppliers and their customers and frequently deal with data that has a material impact on those who have no direct arrangement with the ratings bureau. I don't think it's unreasonable to expect a higher degree of data integrity and reliability in that case, and HN vs. a credit bureau is a terrible comparison.
- avgcorrection 4y ago> Of course that won't happen because regulatory capture, but let's not wring our hands and pretend that this is a fundamentally difficult problem. It's not. Regulatory capture is a huge issue, it is difficult to solve, it is the real mother-issue of many other issues (like this one, you argue), and is fundamental to modern governance. Credit scoring is transitively a fundamentally difficult problem.
- FollowingTheDao 4y agoHere is a better solution. Just do not care about your credit score. Seriously. It is all BS. They make you think you need these things, it is all marketing.
- londons_explore 4y agoDepends if you need a mortgage or credit card to buy stuff... And remember even if you don't technically need those things, you might be much wealthier by the end of your life if you use those things, since both are effectively leveraged investment vehicles, allowing you to invest more and get more returns in good economic times.
- FollowingTheDao 4y agoIf you need credit to buy stuff your problem is not going to be solved by going into debt. Tell me how buying a TV on a credit card is a leveraged investment. You know who gets rich? People who do not spend their money. And don't make it sound like "investment" is always a positive thing. many people are still paying for their "investments" from 2008.
- kleinsch 4y agoInvestment or not, you’re claiming people should only buy cars and houses for straight cash? News flash - most of this country isn’t sitting in six figures of tech savings.
- FollowingTheDao 4y agoI live on disability and bought the van I live in with cash so do not tell me you need credit to buy a car. Housing may be the exception, but you do not need a good credit score to get a loan for a house. Banks do not make these decisions on credit score alone. https://www.ramseysolutions.com/real-estate/no-credit-score-no-home https://www.ramseysolutions.com/real-estate/no-credit-score-... What I am saying is that people should be spend less, save their money, and never going into any kind of debt, and ignore their credit score.
- londons_explore 4y agoIn many cases the information is true. Ie. you really did pay a $1.50 bill 17 years late because the bills were sent to your old address. The real fix is to only allow credit reporting systems to report on current debt, not any past debt or behaviour. (on top of the liability for mistakes you propose).
- partiallypro 4y agoYou can report incorrect information to the credit rating agency
- TheOtherHobbes 4y agoIn the UK you can also sue for defamation, which can be worth substantial damages if you win. Not many people realise this. Not speaking from personal experience, but I'm aware of a small number of cases where credit agencies, shops, and banks were sued for downgrading a credit score because of their own mistakes. I suspect this would be less likely to succeed in the US. But it's interesting that technically a downgraded credit score - especially with proof of consequent harms and expenses - is very close to the legal definition of defamation.
- boatsie 4y agoYou absolutely can sue under the FCRA for violations, but there’s a few major problems. First, even if you find a lawyer to take it on contingency, there are quite a few hard costs that are still out of pocket. Postage, document prep fees, travel expenses for depositions, expert witnesses, etc. It can literally be thousands of dollars. Second, if your state does not allow for punitive damages for this type of violation, you need to prove damages. It is hard to quantify what the economic damage is of a credit denial or difficulty finding a lender is, and thus they will tie you and your lawyer’s time up with arguing this, even if they concede they erred. Third, there is a serious time commitment to make in a lawsuit. Interviews, timely filings, certified mailings, depositions, etc. Easily tens of hours possibly hundreds. Now, the type of person who can afford the time and expense of doing these things is generally also the type of person who can ignore a small hit to their credit score or a higher interest loan. Thus, these types of suits are not commonplace. That said, I know someone who did this and was successful in getting a settlement.