If I Have Errors On My Credit Report In California, Can I Sue Under State Law?

10 Mar If I Have Errors On My Credit Report In California, Can I Sue Under State Law?

California residents have two credit reporting laws at their disposal – the Fair Credit Reporting Act and the California’s Consumer Credit Reporting Agency Act.

That is, under December 29, 2008. On that date, the California First District Court of Appeal, Division One, in Liceaga v. Debt Recovery Solutions, LLC (A120277) held that the federal Fair Credit Reporting Act preempts all actions filed under California’s Consumer Credit Reporting Agency Act.

In other words, the California courts have singlehandedly gutted the Consumer Credit Reporting Agency Act. Now if you live in California, you get the Fair Credit Reporting Act or nothing at all.

Rebecca Liceaga’s purse was stolen, and her identity was used to obtain a Sprint cell phone account. When she didn’t pay the bill, Sprint reported her “default” to various consumer credit reporting agencies. Rebecca filed a lawsuit under California’s Consumer Credit Reporting Agencies Act, alleging the debt collection agency furnished information it knew or should have known was inaccurate.

The court tossed out Rebecca’s lawsuit on the ground that the express language of the FCRA granted all state laws “relating to the responsibilities of persons who furnish information to consumer reporting agencies” except, as to California, one specific subsection of the CCRAA (Civil Code section 1785.25(a)). The court concluded this “California exception” was, in fact, limited to the one enumerated subsection and “does not allow a private right of action.”

According to the Court, “Congress has preempted state court private actions against furnishers of inaccurate credit information to credit reporting agencies, and no exclusion for California actions exists.”

Thanks to the Financial Institution Law Blog for pointing out this important decision.

Pasadena Bankruptcy LawyerJay S. Fleischman is a bankruptcy lawyer in the Los Angeles area. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.

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Jay S. Fleischman is a bankruptcy lawyer with offices in Los Angeles and New York. He can often be found on Google+ and Twitter, where he shares information about consumer protection issues and personal finance.
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