Reviewed by Laurence P. Banville, Esq.Frequently asked questions
What law lets you sue a bank for wrong credit reporting?
The federal Fair Credit Reporting Act (FCRA, 15 U.S.C. § 1681s-2) requires banks and other furnishers to report accurate information and investigate consumer disputes. If a bank willfully or negligently violates the FCRA, you can sue in federal or state court. New York consumers may also have claims under NY General Business Law § 380, which mirrors many FCRA protections at the state level.
What damages can you recover in an FCRA lawsuit against a bank?
If the violation was negligent, you can recover actual damages — such as lost loan opportunities, higher interest rates, or emotional distress — plus attorney fees and court costs. If the bank acted willfully, you may also recover statutory damages between 00 and ,000 per violation, and potentially punitive damages. NY courts have awarded significant damages where banks ignored repeated disputes.
Do you have to dispute the error before suing?
Yes. Under the FCRA, you must first submit a written dispute to the credit bureau reporting the error. The bureau notifies the bank, and the bank must investigate and correct any inaccuracy within 30 days. If the bank ignores the dispute or re-reports the same false information, your right to sue the bank directly is triggered. Keep copies of all dispute letters and certified mail receipts.
What is the deadline to sue a bank for credit reporting errors in New York?
The FCRA sets a two-year statute of limitations from the date you discovered the violation, or five years from the date of the violation itself, whichever is earlier. NY personal injury claims generally follow CPLR § 214's three-year SOL, but FCRA claims use the federal timeline. Do not wait — evidence of the bank's investigation records can be lost over time. Consult an attorney as soon as you identify an error.