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Many people facing financial tough times want to know what their legal rights are and how they can use them. To answer a few of the most asked questions I have put together this article on whom you can sue and what you can sue for. Lets begin with a question that people ask me all the time. When can I sue my creditor and what can I sue them for? To answer this question I will first start by saying yes you can sue your creditor for many different reasons. One of the first reasons is if the creditor has reported your credit history inaccurate. Your claim against them could be one of Defamation or financial injury. There is case law giving precedent to this in the US Court of Appeals Ninth Circuit, No. 00-15946, Nelson vs. Chase Manhattan. This court found Chase responsible and fined them for the degree of damages incurred by the wrong that took place.
Another thing that many people with credit card debt ask me is if they can sue a creditor for falsely stating a disputed credit account on your credit history. The answer again is yes. Yes you can sue the creditor if you have disputed a debt, and they have failed to report it as disputed account to the credit bureaus. You can sue the creditor for this because of Section 623 of the Fair Credit Reporting Act and the specific laws that are invoked to your favor. The fine for this erroneous credit reporting to your creditor is $1000.
Another creditor claim that people typically have is against collection agencies when collection agencies pull credit with out permission. When collecting on a debt, Collection agencies routinely pull credit for accounts that are in default. This happens when a creditor allocates the account to third party collectors. Once the account has been allocated to a third party collector who is not the original creditor the creditor has given up their right to collect on the debt. Therefore if the collection company who you have never heard of before attempts to collect on that debt they had better validate that you owe them money or it would follow that they have no right to do a credit inquire on your credit history.
If there is not a valid contract stating that the debt is owed or showing proper assignment of the account to the collector then there is no way of knowing if the third party debt collector is the holder in due course. (Collection agencies are not in the business of lending money and frequently more than one company at a time tries to collect on debts) The law states in the Fair Credit Reporting Act under Section 604 injury to your credit report and credit score is a $1000 fine. I don't know about you but if credit is pulled without permission and the creditor cannot verify that you gave them permissible purpose then I would consider a claim against them. The citing case law is Cushman, v. Trans Union Corporation US Court of Appeals for the Third Circuit Court Case 115 F.3d220, June 9, 1997, Filed (D.C No. 95-cv-1743)
In summary there are many reasons why someone could sue their creditors. Next time you are dealing with a collection agencies be sure to think twice about your defenses and course of actions.
