Human Trafficking Survivors Have New Rights under the FCRA
The Fair Credit Reporting Act, a federal law that protects individuals from abusive credit practices, now provides additional rights to survivors of human trafficking. A new amendment, known as the Debt Bondage Repair Act, creates a process allowing survivors to have adverse credit information resulting from their trafficking experience removed from their credit report. Obtaining relief from coerced debt and restoring credit status is a critical component of survivors’ recovery. Not only does it allow for survivors’ financial freedom, but it reduces continued trauma and the risk of re-victimization.
Survivors of human trafficking are often not in control of what appears on their credit report due to coercion by exploiters. According to Polaris, a non-profit that has assisted thousands of human trafficking survivors, 26 percent of survivors had a bank or credit account in their name used or controlled by their trafficker. Although tactics vary, traffickers are known to force victims to open, close, or mismanage bank accounts and credit cards, or engage in other activity that leads to bad credit. They may also fraudulently use victims’ identification to access credit and commit financial crimes long after survivors escape the dangerous situation.
The financial consequence as a result of such exploitation can be debilitating. Many times, survivors are prevented from obtaining housing, education, or other opportunities. Even worse, a negative credit status increases survivors’ vulnerability to re-victimization.
The new legislation aims to address these significant harms faced by survivors. Per the amendment, survivors can submit documentation that certifies them as “victims of severe forms of human trafficking” from a state or federal agency. Once the documentation is submitted, credit reporting agencies are no longer allowed to show that debt as adverse information impacting their credit score. Should a credit reporting agency fail to comply, survivors may be entitled to a range of potential compensation, including actual, statutory, and punitive damages as well as reasonable attorney fees.