The Damage Done: How to Determine Your Losses in a Credit Reporting Case

One of the most frequent questions we hear from potential new clients after, “Do I have a case?,” is, “How much will I get?” Both of these questions actually highlight the two basic dance steps of a civil case: Causation and Damages. Causation refers to proving, with actual evidence, that someone(s) caused you harm, or damages. If you can do that, then you may have a case. The damages, essentially meaning the harm you suffered, goes to the “how much” part. In short, you have to prove someone caused an illegal act to occur, that you were in fact harmed by that illegal act, and by how much.

Sometimes our new callers are quick to explain the various ways they were harmed by the credit bureaus (e.g. Experian, Equifax and Trans Union) and their “furnishers,” meaning the entities, such as banks and businesses of all kinds, that provide financial information about you to the those bureaus via computer. Other times clients are not aware of how they have been harmed, but only have a strong sense that they were victims of an injustice.

A Plaintiff (one who brings a lawsuit) can claim different kind of damages in a credit damage case, and this is explored in the discovery phase of litigation. A very important type of damages is referred to as “emotional distress.” One of our past clients declared that he “suffered from migraine headaches, sleeplessness, a feeling of extreme frustration and helplessness at not being able to resolve this matter, embarrassment, humiliation, emotional upset and difficulty in keeping up [his] spirits and sociability.” Another former client testified that she “feels stigmatized, has fights with her partner, difficulty sleeping, recurring fear, vomiting, and sick stomach.” It should be noted that some people express this harmful distress quite openly, others try to keep a stiff upper lip, but both types can still suffer severely.

Regarding Plaintiff’s emotional distress damages, the Defendants (the parties being sued) often ask in discovery questions whether Plaintiff has seen a psychiatrist or psychoanalyst or psychologist for their emotional distress, but that is not required at all. People handle stress differently and in different ways. Some might talk to a close friend, or a minister, or take long walks. Nor do you have to claim physical injuries to have a valid emotional distress claim.

Another broad type of damages is “Actual Damages”. Did your auto insurance premiums go up? Did your interest rates suddenly increase on your home loan or credit cards? Were you turned down for a credit card or home loan or car loan, or get a good rate when the interest rates were low? Were you unable to rent an apartment? What you want to do is get those turn-down letters. (Remember, actual evidence.) Sometimes the creditors will even name the reporting of one of the specific credit bureaus as the reason for the turn-down.

There is also “Economic Damages” in the form of damaged credit rating resulting in an ability to get credit. According to financial expert Thomas A Tarter, negative credit items on your credit report can reduce a consumer’s credit score resulting in a higher cost of credit. Tarter found that even a reduction of five points on your credit score could result in the cost of credit increasing. With lower credit scores, especially below a certain threshold, you may be required to make higher down payments.

Finally, there are “Punitive Damages” Plaintiff may claim against defendants for “willfully” (knowingly and recklessly) failing to comply with the requirements imposed by the Fair Credit Reporting Act. Punitive damages are not likely to be assessed in most cases, by any means, but if the violations were flagrant enough, they very well could be.

Returning to the caller’s question, “How much will I get?”, the answer of course depends to a large degree on the strength of your case. How strong are the facts and the evidence? How willful were the defendants? As to damages, what did you have to endure? How persistent and tenacious were you in your efforts to handle the matter yourself before turning, out of desperation, to a law firm to help you? How well is this documented? How much emotional distress did you endure? How did it affect your attempts to obtain credit? Did it affect your credit score? Were defendants’ actions flagrant? Is the harm ongoing? For the answers to those questions, we are here to help you sort them out.

Copyright © 2015 by Robert F. Brennan, Esq. All rights reserved.

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