A recent Supreme Court decision means that consumers in Illinois and throughout the rest of the country can sue the federal government for violations of the Fair Credit Reporting Act (FCRA). The case in question involved a man who sued the USDA after it incorrectly reported a loan payment as past due. The plaintiff claimed that the USDA failed to investigate the matter after the agency asserted that the FCRA didn’t apply because of sovereign immunity.
An overview of the FCRA
The FCRA allows individuals to take legal action against entities that incorrectly report information to credit reporting agencies. According to the FCRA itself, consumers can take action against any individual who supplies information that results in damage to the plaintiff’s credit score. An individual is defined broadly as a person, corporation or government entity. This was the basis by which Justice Gorsuch found that the FCRA waived sovereign immunity in this case.
An overview of sovereign immunity
Under the principle of sovereign immunity, the government cannot be sued by an individual. This is why the USDA sought to have the claim against it tossed out before it got to the Supreme Court. However, in addition to the Supreme Court, many outside parties threw their support toward the plaintiff in the case. These groups argued that the FCRA can’t function if some entities that provide information that causes credit issues aren’t held responsible for their actions.
Inaccurate information on your credit report may reduce your score by dozens or hundreds of points. Therefore, it’s critical to review it to ensure that any mistakes are caught and rectified quickly. Under the FCRA, information on your credit report must be verified or removed in a timely manner after a complaint is made.