Some of you undoubtedly saw the 60 Minutes story on problems with credit reporting agencies’ responses to consumer complaints about errors that show up in credit reports. ( If you missed the excellent exposé on 60 Minutes this past Sunday about the scandalous way the credit reporting industry works, catch it here.)
What CBS’ 60 Minutes didn’t tell you: If you’ve got a good FCRA case, you don’t have to pay an attorney.
CBS did a great job of exposing many of the accuracy problems in the industry. But the piece may have left frustrated victims with the misimpression that all is hopeless, that there’s nothing consumers can do about false information short of forking over gobs of money to an attorney for a highly uncertain result.
60 Minutes failed to emphasize that the Fair Credit Reporting Act (FCRA) is a fee-shifting statute, meaning that in a successful case the burden for paying the victim’s attorney’s fees is shifted off of the victim and onto the lawbreaking defendant. The money the lawbreaker has to pay for attorney’s fees comes on top of any money for the harm done to the consumer.
That means that many of the finest consumer rights attorneys will take winnable FCRA cases on contingency, meaning the attorney only gets paid if the case makes money, and the attorney’s entire pay comes out of the recovery. To find an FCRA attorney in your area, go to the National Association of Consumer Advocates’ find-an-attorney page here. Most NACA attorneys offer a free consultation. The FCRA is a complex statute. A consumer who is truly a victim of unfair credit reporting should definitely get an attorney, but in most cases shouldn’t have to pay for one.
What makes a good FCRA attorney?
Consumers considering an attorney for an FCRA case should ask these questions:
- Do you file lawsuits for consumers? Or more broadly: What exactly is it you’re going to do for me? Some attorneys who purport to help consumers with credit reporting issues don’t use their law licenses for much besides marketing. As noted above, in a successful FCRA lawsuit the defendant has to pay the plaintiff’s attorney’s fees. But even in the best case, the defendant can’t be made to pay the plaintiff’s attorney’s fees if there’s no lawsuit. Some attorneys and other companies offering “credit repair” would rather not take on the risk and burden of actually litigating cases in court. Instead, their business model is solely to take money from consumers. They’ll write dispute letters for you (which in some cases you could do just as well yourself), but if that fails they will leave you high and dry after you’ve paid them a bunch of money. While a lawsuit is not appropriate in every instance, an attorney who is not even prepared to file one as a last resort is unlikely to have the expertise and professionalism required to get the best results.
- Will I have to pay you for your services? The answer to this usually follows from the answer to number 1: if they are charging you out-of-pocket for their work, it likely means they are unwilling or unable to bring a lawsuit for you. Or else it may mean they are not confident they can win your case. If so, you might want to think twice about bringing it.
- Will I be allowed to see what you send to the credit bureaus on my behalf? You’re entitled to know what’s being said on your behalf in dispute letters or elsewhere. You should be highly suspicions of anyone who asks you to sign away that right, as some credit repair organizations do.
- Are you licensed in my state? Many attorneys have national (or global) websites or other marketing programs, but are only licensed to practice law in one state or just a few. If they are not licensed in your state, they may still be happy to “represent” you – particularly if you are paying them – but what they can do for you is very limited. They might not tell you before taking your money that they’re not licensed in your state: you need to ask.
- Are you a member of NACA? The National Association of Consumer Advocates is a network of professionals dedicated to justice for consumers under the Fair Credit Reporting Act and other consumer protection laws. NACA makes many publications, conferences, and other training resources available to its members.
- How long have you been handling FCRA cases? As credit reports and credit scores have become the focus of a lot of attention in recent years, a lot of attorneys have jumped on the FCRA bandwagon. Some attorneys do excellent FCRA work despite being relatively new at it. But experience is of course a factor to consider.
John H. Goolsby is owner of the Goolsby Law Office, LLC, in Minneapolis, MN. He is an attorney licensed in Minnesota, is a member of the National Association of Consumer Advocates, and has represented consumers in Fair Credit Reporting Act cases for more than ten years. Call him at 612-331-8700.
Disclaimer: Nothing in this post should be construed as legal advice or the creation of an attorney-client relationship. There is no substitute for an individual consultation with a qualified attorney.