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