Car owner gave car away and failed to remove his name from title to car.

Full question:

I gave a car away a couple of years ago. I signed the title over to the guy but he never got it transferred in his name, no bill of sale. The guy turned around and sold the car to someone else, who eventually had the car towed. Needless to say my credit report now has a charge for about 1600$ from the towing company. The towing company never sent me any information that the car was impounded while they where holding it, that I can remember (has been a few years), I simply got a call from a collection agency one day. On the paperwork I got from the towing company it says it was towed at the request of the owner, my assumption would be the person my friend sold it too. The towing company did sell the car (or scrapped it); and certainly for less then what they are wanting for holding it (car was not worth anything). I am considering disputing the towing companies charge on my credit report and wanted to know what legal grounds I could do it on.

• Category: Debts and Credit
• Date: 04/07/2025
• State: Texas

Answer:

In this response, I intend to give legal information, not legal advice. For legal advice, you must consult an attorney who is licensed to practice law in your state, is free of any conflict of interest, and is available to meet with you regarding your situation.

You may dispute the indebtedness for the reason that you did not incur the indebtedness. Please review the information in this response for further information about credit reports and your rights to challenge information in those reports.

FAIR CREDIT REPORTING ACT. The Fair Credit Reporting Act is a federal statute, enacted in 1970 to protect the rights of consumers, and regulate the practices of those who provide information to the credit reporting agencies, the agencies themselves and credit report users. The FCRA states that a consumer can make a legal claim against, and sue the credit reporting agencies, creditors and debt collectors who report information that is wrong. The Fair Credit Reporting Act offers specific consumer protections if you have been victimized by the crime of identity theft.

CREDIT REPAIR. No one can legally remove accurate and timely negative information from a credit report. However, the law does allow you to request a reinvestigation of information in your file that you dispute as inaccurate or incomplete. In some cases, a court judgment against someone may be removed from a credit report. For example, the judgment may have expired under the state statute of limitations, which vary by state. Some states don’t provide for a judgment to be renewed. The credit bureau has 30 days to verify the accuracy of an item. If the court does not verify the judgment within 30 days, the credit bureau will delete it.

CREDIT LAW & DEFINITION. State and federal laws govern charges for interest, finance charges, cash advances, charges for extensions of credit in excess of pre-established limits, late fees or delinquency charges, premiums on credit life and credit accident and health insurance, annual fees and other charges and fees. Congress passed the Consumer Protection Act in part to regulate the consumer credit industry. It requires creditors to disclose credit terms to consumers. The Act prohibits discrimination based on sex or marital status in the extending of credit. The Act also regulates certain debt collectors. Another federal statute, the Fair Credit Reporting Act, was enacted in 1970 to protect the rights of consumers, and regulate the practices of those who provide information to the credit reporting agencies, the agencies themselves and credit report users.

CREDIT BUREAUS. A credit bureau is an agency that collects and sells information about the credit-worthiness, or the ability to meet debt obligations, of individuals and companies. Consumer credit bureaus maintain and report on this information for individuals, while commercial credit bureaus collect and distribute this information for businesses. A synonym for a credit bureau is a credit reporting agency. Credit bureaus provide information to a number of clients, including merchants that extend credit to consumers and businesses that extend credit to other businesses. Credit bureaus may be private enterprises or may be operated as cooperatives by merchants in a particular geographic area. Users of the services typically pay either a fee based on their amount of usage or a flat membership charge.

Credit bureaus serve as a clearinghouse for credit history information. Credit grantors provide the bureaus with information about how credit customers pay their bills, and the bureaus assemble this information into a file on every consumer or business. Credit grantors can obtain credit reports about potential customers who wish to open accounts. There are over 1,000 local and regional consumer credit bureaus throughout the United States, and most are either owned or under contract with one of the nation's three major consumer credit reporting agencies: Trans Union, Equifax, and Experian.