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The Fair Credit Reporting Act has two damages provisions. One is § 1681o, which allows consumers to recover actual damages and attorney's fees when a credit reporting agency or furnisher is negligent. The other is § 1681n, which allows recovery for willful violations, and willful violations come with a different and much larger menu: actual damages, or alternatively statutory damages of $100 to $1,000 per violation; punitive damages in the court's discretion; and attorney's fees and costs.
For years the question was: what counts as "willful"?
What Safeco Actually Held
In 2007, the Supreme Court answered that question in Safeco Insurance Co. of America v. Burr, 551 U.S. 47. The case involved a consumer reporting violation by an insurance company. The Court held that "willful" under the FCRA includes both knowing violations and violations committed with reckless disregard, and that "reckless disregard" means a reading of the FCRA that was "objectively unreasonable" in light of legal rules that were clearly established at the time of the conduct.
That is a much lower bar than most consumers, and most companies, assumed.
What Willfulness Does Not Require
In plain language, willfulness does not require:
- That the company knew you specifically existed; - That it set out to harm you; - That it acted maliciously; - That it ignored your dispute deliberately rather than systemically.
It only requires that the company's reading of the law was unreasonable in light of what the law clearly said.
What Courts Look At
How that plays out in practice depends on the conduct and the company. Courts evaluating willfulness look at a familiar set of factors:
1. The number and scope of violations. One slip is rarely willful. A pattern of similar violations is the bedrock of a willfulness claim.
2. Prior litigation against the defendant for the same conduct. When the same company has been sued for the same FCRA violation multiple times, and has settled or lost those cases, and then continues the conduct anyway, juries call that reckless.
3. Duration. How long did the wrong information stay on the report after the consumer disputed it? Months are bad for the defendant; years are willful.
4. Systems designed knowing they would produce errors. The Brim v. Midland trial showed a furnisher processing 8,000 disputes a week with a computer that simply compared incoming data to the furnisher's existing records and answered "verified" 95% of the time. The jury found that willful. The Daugherty v. Ocwen Loan Servicing case showed a mortgage servicer that processed each successive dispute in isolation without consulting prior correspondence, willful.
5. Notice. How clearly did the defendant know the data was wrong? One dispute is notice. Three disputes with documents is notice that cannot be missed.
6. The defendant's awareness. Internal communications and training materials that show the company knew its system was producing inaccurate results, and continued anyway, are powerful evidence of recklessness.
7. The defendant's resources. Encore Capital Group's stockholders' equity grew from $171 million to $302 million during the years of Mr. Brim's dispute. The jury was allowed to consider whether a company that could afford to investigate disputes properly had chosen not to. They did.
Why It Changes the Case
When a willfulness claim succeeds, the financial consequences for the defendant change in three ways.
Damages. The plaintiff is no longer limited to compensatory damages. The plaintiff may elect statutory damages between $100 and $1,000 per violation, which can matter enormously when the violation is repeated across many disputes or many consumers. The plaintiff may seek punitive damages in addition. Brim returned $623,180 in punitives on top of $100,000 in compensatories. Williams v. First Advantage returned $3.3 million in punitives against an employment-screening CRA.
Attorney's fees. Both § 1681n and § 1681o shift attorney's fees and costs to the defendant when the plaintiff wins. That is why credible FCRA representation is available to consumers on contingency. The fees come from the defendant, not from the recovery.
Settlement leverage. Most FCRA cases settle. The size of the settlement turns on the strength of the willfulness theory. A plausible recklessness claim, built on documents, certified-mail records, and a clean dispute trail, turns a small case into a large one.
What This Means for You
The practical lesson for consumers is this. When you dispute an inaccuracy, you are not just trying to fix your file. You are also creating the record that will support a willfulness claim if the bureau or the furnisher refuses to fix it. That is why every step on this site emphasizes documentation. The same paperwork that maximizes your chance of correction also maximizes the leverage to enforce the law if correction does not happen.
If you have disputed an inaccuracy and the bureau or furnisher has refused to fix it, particularly after multiple disputes, call us at (757) 930-3660 or request a free case review. Willfulness is a fact question, and the fact pattern is often clearer than the bureaus think.
Why the Standard Changes Settlements
Most FCRA cases do not reach a verdict, so the practical importance of willfulness is what it does to the negotiation.
Under § 1681o, negligent noncompliance gets actual damages and fees. Under § 1681n, willful noncompliance opens statutory damages within the range the statute sets, and punitive damages on top, without the plaintiff having to prove a specific dollar loss.
That second route changes the arithmetic on both sides. A defendant evaluating a case with a credible willfulness theory is no longer pricing the plaintiff's provable out of pocket loss. It is pricing a range that does not depend on proving loss at all, plus exposure to punitive damages, plus fees.
This is why the evidence that supports willfulness, the repeat notice, the duration, the systems operated with knowledge of what they produce, is worth building even in a case that will never be tried.
What a Consumer Can Do About It
Willfulness is largely about what the defendant knew, which sounds like something only discovery can establish. Some of it is in your hands.
Notice is the piece you control completely. One dispute is notice. Three documented disputes, each with evidence attached, each answered with the same verification, is a very different record, and it is a record you create by persisting.
Duration is the second. How long the wrong information stayed on the file after the first notice is a fact your dated reports establish.
Specificity is the third. A dispute that spelled out the error and attached proof makes it harder to characterise a verification as an honest mistake than a dispute that said only that the account was not yours.
Common Questions
What does willful mean under the FCRA?
After Safeco Insurance Co. of America v. Burr, willfulness includes reckless disregard of a statutory obligation, not only knowing violation. A company's reading of the law can be reckless where it is objectively unreasonable in light of what the law clearly requires.
Do I have to prove the company intended to harm me?
No. That is the central point of Safeco. You do not have to show the company knew you existed, set out to harm you, or acted maliciously.
What is the difference between § 1681n and § 1681o?
What evidence supports willfulness?
The number and scope of violations, prior litigation against the same defendant over the same conduct, how long the error persisted after notice, systems operated with knowledge that they produce errors, how clearly the defendant was told, and internal materials showing what it knew.
Does one error ever count as willful?
Rarely on its own. A single slip usually supports negligence. The pattern, and what the defendant did after being told, is what moves a case toward willfulness.
How does this affect what a case is worth?
Significantly, because statutory damages do not require proof of a specific loss and punitive damages become available. Most cases settle, and the strength of the willfulness evidence drives the number.
Note on Case Results
PAST RESULTS DO NOT GUARANTEE, WARRANT, OR PREDICT FUTURE OUTCOMES. The cases discussed above are factual examples from the public record. Every case is different. Some of the verdicts, judgments, or rulings referenced were modified on appeal, by post-trial motions, or by settlement. The outcome of any future case depends on the specific facts, applicable law, defendants involved, and many other variables that cannot be predicted from prior results.
This page is for general informational purposes only. It is not legal advice. Reading it does not create an attorney-client relationship between you and Consumer Litigation Associates, P.C.
Leonard A. Bennett, VSB #37523, responsible for content. Consumer Litigation Associates, P.C., Newport News, Virginia. Attorney advertising under the rules of the Virginia State Bar.