topic Re: Small Claims Court with FCRA Violations? in Rebuilding Your Credit

Small Claims Court with FCRA Violations?

SKBirdmind — Wed, 20 Feb 2019 20:42:10 GMT

Can this resource be used to assist me in credit disputes?

ChexSystems / Early Warning Services

"You never know what these are until they're used against you......" I recently had 2 x different bank accounts shut down without cause and without my consent. THEIR so-called reasons don't apply here, but there were no overdrafts, bounced checks, fees, or balances owed as a result of this - they just wanted to write me up for it. In my experience, all disputing this with ChexSystems/Early Warning Services will do is them vaguely contacting the bank that reported me there for them to say "uh......yeah, it's correct." Hence, I asked both banks to provide validation of both reportings. They never responded. As I understand, they have now violated the Fair Credit Reporting Act and are required to remove these reportings of me? Could that be done through Small Claims?

I'm hurting pretty badly from this right now - much more so than any 'damage' a FICO score could do - no checks, no debit card, etc. all because of some banks wanting to defame me. I just registered an Assumed Business Name with the state for a small business I'm starting - despite me providing all of the right documentation to a branch manager in which to open a bank account in the business' name, they decline me the microsecond my social security number is hit (becuase they need to have a person on record for the business, I guess) with no explanation. They just say "no" like it's nothing to them. I really want to resolve this as soon as I absolutely can.

Credit Files

Similar to above, I recently asked a pair of banks of whom state I owe charged-off creidt amounts to provide validation of debt - just for my own records and so I have a hard copy stating what they're asking for. If they don't respond or provide any information, have they violated the FCRA and are required to remove these reportings of me, even if they are accurate with money still owed on them? All of this totals less than $10,000 which the limit for Small Claims Court in my state.

Re: Small Claims Court with FCRA Violations?

rbentley — Wed, 20 Feb 2019 21:13:27 GMT

@SKBirdmind wrote:
Can this resource be used to assist me in credit disputes?

ChexSystems / Early Warning Services
"You never know what these are until they're used against you......" I recently had 2 x different bank accounts shut down without cause and without my consent. THEIR so-called reasons don't apply here, but there were no overdrafts, bounced checks, fees, or balances owed as a result of this - they just wanted to write me up for it. In my experience, all disputing this with ChexSystems/Early Warning Services will do is them vaguely contacting the bank that reported me there for them to say "uh......yeah, it's correct." Hence, I asked both banks to provide validation of both reportings. They never responded. As I understand, they have now violated the Fair Credit Reporting Act and are required to remove these reportings of me? Could that be done through Small Claims?

I'm hurting pretty badly from this right now - much more so than any 'damage' a FICO score could do - no checks, no debit card, etc. all because of some banks wanting to defame me. I just registered an Assumed Business Name with the state for a small business I'm starting - despite me providing all of the right documentation to a branch manager in which to open a bank account in the business' name, they decline me the microsecond my social security number is hit (becuase they need to have a person on record for the business, I guess) with no explanation. They just say "no" like it's nothing to them. I really want to resolve this as soon as I absolutely can.

Credit Files
Similar to above, I recently asked a pair of banks of whom state I owe charged-off creidt amounts to provide validation of debt - just for my own records and so I have a hard copy stating what they're asking for. If they don't respond or provide any information, have they violated the FCRA and are required to remove these reportings of me, even if they are accurate with money still owed on them? All of this totals less than $10,000 which the limit for Small Claims Court in my state.

FCRA is a Federal law and thus claims made under it must be filed in Federal Court. No small claims Court has jurisdiction to adjudicate FCRA violations, even if the claimed amount is less that small claims jurisdictional limit. http://protectingconsumerrights.com/blog/2013/11/13/seventh-circuit-confirms-that-fcra-claims-are-to-remain-solely-in-federal-court/

Re: Small Claims Court with FCRA Violations?

RobertEG — Wed, 20 Feb 2019 22:43:55 GMT

The FCRA does not include any provision for requiring an original creditor to send validation of current debt.

Debt validation requests only apply to debt collectors, and are debt collection practices matters under the FDCPA, and not the FCRA.

The FCRA does have a dispute process, which is not the same as a request for debt validation, wherein a consumer can contest the accuracy of any reported item of information in their credit file. It requires that you file a formal dispute under FCRA 611, which requires you to identify the specific item of reported information that is asserted to be inaccurate, and provide sufficient information to permit investigation of the asserted inaccuracy.

A simple statement that you request validation does not constitute a dispute under the FCRA, and if you make such a request, lack of response is not a violation of the FCRA.

A "dispute" that is simply a request for "validation" per se can be dismissed as a frivolous dispute if it lacks a specific assertion of an inaccuracy in reported information.

Your account agreements with the creditor along with their regular billing statements, constitutes their ongoing validation of asserted debt.

As for filing civil action for violation of the FCRA as regards the accuracy of reported information, a consumer has no right to file a civil action related to accuracy of reported information per se. See FCRA 623(c).

The consumer only acquires right to file a civil action after they have first filed a dispute with the CRA, and received verification of the accuracy of the information. At that point, civil action would apply only to the reasonableness of their investigation of the proper dispute, and not of the reporting per se.

A DV request would not be a proper dispute under the FCRA, and thus is not adequate to establish any right to bring civil action regarding their reporting.

Do you have basis for showing an actual inaccuracy in some specific item of information being reported?

If so, you can file a dispute and get that issue resolved, or provide basis for a subsequent civil action regarding the adequacy of their verification of the dispute.

Regarding the separate issue of whether you can bring civil action for FCRA violations in state court, the answer is yes.

FCRA 618 explicitly permits the option of either bringing action in federal court or any other court of competent jurisdiction.

The 7th cir case cited by rbentley in his response apparently dismissed the state suit, not because of lack of venue in state court, but rather based on duplication of federal filing.

Additionally, almost all states have enacted their own version of the federal FCRA, which reiterates most of the sections of the federal statute. It is thus highly likely that you also have a parallel provision of any FCRA reporting section in your separate state code, which clearly has enforcement venue in state court.

Re: Small Claims Court with FCRA Violations?

rbentley — Thu, 21 Feb 2019 00:39:59 GMT

@RobertEG wrote:
Regarding the separate issue of whether you can bring civil action for FCRA violations in state court, the answer is yes.
FCRA 618 explicitly permits the option of either bringing action in federal court or any other court of competent jurisdiction.
The 7th cir case cited by rbentley in his response apparently dismissed the state suit, not because of lack of venue in state court, but rather based on duplication of federal filing.

Additionally, almost all states have enacted their own version of the federal FCRA, which reiterates most of the sections of the federal statute. It is thus highly likely that you also have a parallel provision of any FCRA reporting section in your separate state code, which clearly has enforcement venue in state court.

RobertEG is the gold standard on this forum for detailed responses on legal rights, but in this case I believe he is mistaken. There is no authority from any Court or any creditble secondary authority which would support the jurisdiction of any State small claims court to hear violations of FCRA, which is what the OP asked.

While RobertEG . cites "FCRA 618 explicitly permits the option of either bringing action in federal court or any other court of competent jurisdiction." I assume that is a typo and he actually means Section 1681. That Section specifically provides that: "An action to enforce any liability created under this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within two years from the date on which the liability arises." Robert apparently interprets "any other court of competent jurisdiction" to include State courts, but there is no judicial authority for that claim. My Westlaw and Lexis legal research search showed over 600 cases where claims under FCRA that had initially been filed in State Courts were dismissed or transfered to Federal Court. I am unable to find a single case where a State Court (less even a small claims Court) has had juridiction to enforce FCRA.

RobertEG is correct that many States have statutes that contain provisions similar to FCRA. Those are in some cases less or greater than provided in FCRA. One may, of course, sue in State Court under State statutes, but that is not what the OP asked.

Further I humbly submit that RobertEG has misread the plain language of the 7th Circuit case I cited. I could cite an addition 217 cases from all Federal Circuits, but I will let this stand " If you have been the victim of conduct in violation of this statute (FCRA) you likely filed suit in federal court. Despite the fact that most states have their own independent laws in place to protect their citizens from identical violations, the FCRA preempts or takes precedence over, the conduct and a consumer can only seek remedy in a federal court in their jurisdiction."

Re: Small Claims Court with FCRA Violations?

SKBirdmind — Thu, 21 Feb 2019 19:11:39 GMT

FCRA is a Federal law and thus claims made under it must be filed in Federal Court.

RobertEG is the gold standard on this forum for detailed responses on legal rights, but in this case I believe he is mistaken

Hence, which one is it?

---

A "dispute" that is simply a request for "validation" per se can be dismissed as a frivolous dispute if it lacks a specific assertion of an inaccuracy in reported information.

...again, if an FCRA violation is made than how exactly does one have that bank/creditor remove that reporting from your file? I feel like I have 3 x different answers to the same question.

---

Do you have basis for showing an actual inaccuracy in some specific item of information being reported?

If so, you can file a dispute and get that issue resolved, or provide basis for a subsequent civil action regarding the adequacy of their verification of the dispute.

Yes - statements, cleared checks, etc. - all was quite normal when they decided to randomly close my account (without cause). What does one do to actually have a negative item removed? Last time I recall disputing it, ChexSystems came back less than a week later and said "uh, it's correct." Yeah, right. They provided no basis that any investigation had even been done, either from their end OR the bank's end. Hence, this is why I figure taking things up with the bank itself would be more productive. What sort of basis does one provide?

---

I feel pretty lost on all of this. Has anyone on here been defamed by a bank (or creditor, for that matter) before and had said false negative reporting removed - whether in Small Claims or not? I'm so frustrated by all this and it just feels like there's nothing I can do. Right now I pay bills either with money orders or by buying prepaid gift cards at a local shopping center - $5.95 a shot since they're not reloadable. Elsewise, I'm pretty much left with cash transactions. No debit cards, no checks, no bank transfers, no real credit cards......

Re: Small Claims Court with FCRA Violations?

Anonymous — Thu, 21 Feb 2019 20:34:51 GMT

@rbentley wrote:
RobertEG is the gold standard on this forum for detailed responses on legal rights, but in this case I believe he is mistaken. There is no authority from any Court or any creditble secondary authority which would support the jurisdiction of any State small claims court to hear violations of FCRA, which is what the OP asked.

While RobertEG . cites "FCRA 618 explicitly permits the option of either bringing action in federal court or any other court of competent jurisdiction." I assume that is a typo and he actually means Section 1681. That Section specifically provides that: "An action to enforce any liability created under this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within two years from the date on which the liability arises." Robert apparently interprets "any other court of competent jurisdiction" to include State courts, but there is no judicial authority for that claim. My Westlaw and Lexis legal research search showed over 600 cases where claims under FCRA that had initially been filed in State Courts were dismissed or transfered to Federal Court. I am unable to find a single case where a State Court (less even a small claims Court) has had juridiction to enforce FCRA.

RobertEG is correct that many States have statutes that contain provisions similar to FCRA. Those are in some cases less or greater than provided in FCRA. One may, of course, sue in State Court under State statutes, but that is not what the OP asked.

Further I humbly submit that RobertEG has misread the plain language of the 7th Circuit case I cited. I could cite an addition 217 cases from all Federal Circuits, but I will let this stand " If you have been the victim of conduct in violation of this statute (FCRA) you likely filed suit in federal court. Despite the fact that most states have their own independent laws in place to protect their citizens from identical violations, the FCRA preempts or takes precedence over, the conduct and a consumer can only seek remedy in a federal court in their jurisdiction."

The fact that you found hundreds of cases where FCRA claims were originally brought in state court and then removed should have been a strong indicator that the lawyers who brought them believed it was proper.

Concurrent jurisdiction is the presumption with Federal laws unless Congress vests exclusive jurisdiction otherwise (Claflin v. Houseman, 93 U.S. 130; Tafflin v. Levitt, 493 U.S. 455).

Further:

LOCKARD v. Baton Rouge General Medical Center, a Louisiana Corporation, et al. (11th Cir): "This court has decided other cases under the FCRA that were brought in state court and subsequently removed to federal court, although the removal of those cases was not challenged. Moreover, we have held that where Congress has granted concurrent jurisdiction to state and federal courts, removal is not barred. We hold that the sole purpose of the language at issue here is to allow state courts concurrent jurisdiction for actions brought under the FCRA, and that the provision of concurrent jurisdiction does not prohibit removal."

Re: Small Claims Court with FCRA Violations?

RobertEG — Thu, 21 Feb 2019 21:49:22 GMT

I would agree that the issue of whether state courts have jurisdiction over actions brought for violation of the FCRA is not well-settled.

My opinion is that state actions are not precluded, but that it depends upon the court to determine when.

Getting into presentation of legal briefs supporting such a position is well beyond the scope of this forum, and is reserved for attorneys and courts, not forum discussion.

I would only assert that state actions are not blankedly precluded as a matter of law, but would advise you consult an attorney in your jurisdiction for their opinion based on the facts of your specific violation of the FCRA and its associated prevailing case law in your jurisdiction, as it is not a specific statuory prceclusion, and thus subject to interpretation by the court.

I would only state that the issue of whether preemption of federal over state law has been used to move actions to federal court, but it is not established law that all FCRA actions can only be brought in federal court. Some federal courts have proffered that opinion, but it is not settled law across federal jurisdictions.

If you research the issue of whether preemption of federal law mandates that actions relating to credit reporting must be brought in federal court, you will find many legal papers addressing the issue.

There is no one definitive answer, as it has never reached the Supreme Court, and remains an issue of legal interpretation that is left to attorneys to argue.

I wont offer by own legal opinion, but rather