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Bank of America Lawsuit

Bank of America misapplied a mortgage payment, reported a non-payment, and caused my credit score to drop and raised my closing costs. What recourse do I have?

What recourse do I have if Bank of America misapplied a payment, and admitted as such, causing my credit score to plummet right before closing on a mortgage Thereby causing me to pay 1.75% closing costs when it was their fault? Thanks a ton.

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Updated: Oct 21, 2014

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Highlights

  • Federal law allows consumers to collect damages caused by credit reporting errors.
  • Consult with a lawyer who has experience in civil litigation.

Your question goes to the heart of the enforcement section of the Fair Credit Reporting Act (FCRA), which is a federal law. A consumer harmed by incorrect information reported to or by the credit reporting agencies can collect damages under the FCRA. You may also have a cause of action in your state court for negligence and breach of contract. Before we analyze your question, let us review the FCRA and the relevant code sections.

The purpose of the FCRA, 15 U.S.C. § 1681 et seq. (PDF), is “to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title.” (15 U.S.C. § 1681(b))

Congress gave consumers several causes of action (legal reasons to file a lawsuit) and set limits on damages consumers can recover under the FCRA. (These limits are separate from any breach of contract or negligence claims under state law.)

Civil Liability For Willful Noncompliance

Below is the first of two relevant sections of the FCRA that give consumers damaged by creditors a cause of action:

  1. In general. Any person who willfully fails to comply with any requirement imposed under this title with respect to any consumer is liable to that consumer in an amount equal to the sum of
    1. (A) any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000; or
      (B) in the case of liability of a natural person for obtaining a consumer report under false pretenses or knowingly without a permissible purpose, actual damages sustained by the consumer as a result of the failure or $1,000, whichever is greater;
    2. such amount of punitive damages as the court may allow; and
    3. in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court.
  2. Not shown here because it is not relevant to this discussion
  3. Attorney's fees. Upon a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney's fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper.
  4. Clarification of willful noncompliance. For the purposes of this section, any person who printed an expiration date on any receipt provided to a consumer cardholder at a point of sale or transaction between December 4, 2004, and the date of the enactment of this subsection but otherwise complied with the requirements of section 605(g) for such receipt shall not be in willful noncompliance with section 605(g) by reason of printing such expiration date on the receipt. (15 U.S.C. § 1681n)

The next section is a bit more interesting because the damage limits are higher, and the description of the damaging actions is closer to what you described.

Civil Liability For Negligent Noncompliance

  1. In general. Any person who is negligent in failing to comply with any requirement imposed under this title with respect to any consumer is liable to that consumer in an amount equal to the sum of
    1. any actual damages sustained by the consumer as a result of the failure; and
    2. in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court.
  2. Attorney's fees. On a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney's fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper. (15 U.S.C. § 1681o)

Analyzing Your Facts

A lawyer drafting your pleading will relate your facts somewhat like this: You made a vehicle loan, credit card, mortgage, or personal loan to Bank of America in a timely manner, and through its negligence it gave an inaccurate report to the credit reporting agencies knowing that doing so would cause a degradation of your credit score. Bank of America's negligence and inaccurate report is the cause of your mortgagee offering you a loan with loan terms significantly higher than you would have qualified for had Bank of American made an accurate report to the credit reporting agencies. The resulting damage was an additional 1.75%, which equals $xx,xxx.

As mentioned earlier, you may also have a negligence or libel cause of action in your state's court system. In this type of pleading, your lawyer will use slightly different language to achieve the same argument when filing the lawsuit against Bank of America.

As implied, this is not a do-it-yourself type of exercise. Consult with a lawyer who has experience in civil litigation or consumer law. When interviewing candidates, ask about the lawyer working on a contingency fee, which will reduce or eliminate your out-of-pocket costs.

I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

Bills.com

5 Comments

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  • LR
    Feb, 2011
    lisa
    BOA has ignored my requests also...and i too have very little extra funds to fight back...i live in south Florida....can anyone help please~
    0 Votes

    • BA
      Feb, 2011
      Bill
      Contact the bar association in your county, to see if you can get help with your problems with Bank of America. Ask the people at the bar association if there is a legal aid organization in your county for people with a limited income. Make an appointment with a paralegal or attorney at the legal aid organization and bring in any paperwork that you want reviewed. Alternatively, you may find someone willing to help you if you contact your elected state and federal representatives.
      0 Votes

  • JC
    Jan, 2011
    Jay
    I hope that the person who sent you the question, Bill, sues Bank of America! It seems that the big banks get away with murder and the average American gets the shaft these days.
    0 Votes

    • BA
      Jan, 2011
      Bill
      Your comment brings to mind a statement recorded by the ancient Greek historian Thucydides, "The strong do what they will. The weak suffer what they must."
      0 Votes

    • AP
      Mar, 2012
      anthony
      I am another person that would like to sue Bank of America, they false reported 3 over 30 day nonpayments and now can't get the house my wife and I love...........lets all join and sue together and we will no longer suffer what we must!!!!!
      1 Votes