When you take a look at your credit report, do you notice that section called “credit inquiries” followed by a list of companies or names? The credit reporting agency has provided those companies listed in that section with access to your credit report. You probably don’t recognize some of the names listed but simply assume the inquiries are lawful. But the truth is that many of those companies do not have a permissible purpose for accessing your credit report.
The Fair Credit Reporting Act (FCRA) regulates “consumer reports,” including credit reports. Among the many prohibitions contained in the FCRA is the requirement that people using, accessing, or obtaining your credit report have a permissible purpose in doing so. The statute contains a list of permissible situations in which a consumer report may be obtained. For example, if you instruct someone in writing to obtain your report, that would be a permissible purpose. Otherwise, the most common situations are requests for reports in connection with a credit transaction, employment situation, or some other “legitimate business need.”
When someone makes a credit inquiry without a permissible purpose, it damages you in multiple ways. First, too many credit inquiries can actually damage your credit and lower your credit score. This can lead to denied credit applications or worse finance terms when borrowing money. Second, impermissible credit report access is a breach of your privacy. A third party has gained access to your sensitive and confidential information without permission or a legally recognized purpose.
Most importantly, lax protections against unauthorized access and sub-par security of obtained credit reports make consumers more susceptible to identity theft and data breaches. After the Equifax data breach, consumers must be more vigilant than ever about protecting their financial information. Those unauthorized “credit inquiries” can be more than mere annoyance. They can lead to serious financial ruin.
The FCRA provides consumers whose credit reports have been impermissibly accessed with remedies. Negligent actions by these companies can lead to the collection of actual damages plus attorneys’ fees and costs. If the access is accomplished “willfully,”then the company can also be liable for statutory damages of up to $1,000 and punitive damages. Most importantly, consumers can join together in a class action to ensure that the unauthorized third party stops its unlawful practice.
If your credit report contains inaccurate information or unauthorized inquiries, contact Enright Law. We represent consumers in actions brought under the FCRA. That means that we can dispute inaccurate information and collect damages for unauthorized inquiries.