Yes, but only for willful violations. Section 1681n lets the court award punitive damages in an amount it allows, on top of actual or statutory damages. Negligent violations do not support punitive damages.
Punitive damages are meant to punish and deter, not to compensate. The FCRA allows them in one place: 15 U.S.C. § 1681n(a)(2), which provides for punitive damages in the amount the court may allow when a person willfully fails to comply with the Act.
Willfulness is the threshold
Section 1681o, the negligence section, provides actual damages, costs, and fees, but no punitive damages. So whether a violation was willful can make a significant difference.
The Supreme Court held in Safeco Insurance Co. of America v. Burr (2007) that willful violations include reckless ones. A company acts recklessly when it runs an unjustifiably high risk of violating the law that is either known or so obvious it should be known. A company whose reading of an unclear provision was not objectively unreasonable does not act willfully, even if its reading turns out to be wrong.
How punitive damages are decided
The statute does not set a formula or a cap. The amount is left to the judge or jury under the court’s instructions, and awards can be reviewed after trial. Evidence that may bear on willfulness can include how a company handled disputes, whether it kept reporting the same error after being told about it, and its written policies and procedures.
Taxes
The IRS states in Publication 4345 that punitive damages are taxable and are reported as other income, even when received in a settlement for physical injuries.
Whether punitive damages are awarded, and in what amount, depends on the facts and the court. A free case review can help assess whether the facts point toward a willful violation, with no fee unless we win.
Related
Sources
- 15 U.S.C. § 1681n(a)(2) (Cornell LII)
- 15 U.S.C. § 1681o (Cornell LII)
- Safeco Ins. Co. of America v. Burr, 551 U.S. 47 (2007) (Cornell LII)
- IRS Publication 4345, Settlements: Taxability
Updated November 2026. This page is general information, not legal advice.