All posts by Tom Christiano

Funishers must report that your credit account is disputed after notification.

Under the FCRA, a furnisher must include a notation that your account is disputed as part of its response to a credit reporting agency if you have previously disputed the accuracy of the account.  The furnisher must include this notation even if it believes that you are responsible for the debt associated with the account.  Furnishers that fail to include this notation as part of a response to a dispute reinvestigation may have violated the FCRA and caused significant damage to your credit score.

The reason that a furnisher must include the notation that a consumer disputed the credit reporting for the account is found in 15 U.S.C. 1681s-2b(b)(1)(C) of the Fair Credit Reporting Act.  This provision requires a furnisher to report the results of its dispute reinvestigation to the credit reporting agency. Because furnishers must report accurate information that is not misleading, a furnisher must indicate that the consumer previously disputed the credit account to provide a complete representation of the account status.  When a furnisher fails to note that the consumer disputed the credit reporting of the account, it provides misleading information that the account is simply a refusal to pay and not a genuine material dispute as to whether the consumer is liable for the debt reported on the credit report.

For identity theft victims, the failure to report a debt as disputed can undermine the victim’s ability to have inaccurate accounts removed from their credit report.  When debt collectors, furnishers, and credit reporting agencies see past due accounts that are not marked disputed, those entities may be inclined to believe that the consumer is not being truthful about the time period related to the identity theft or the scope of the identity theft.  Any doubt that the victim is not being truthful about the circumstances of the identity theft can undermine the ability of the identity theft victim to restore their good credit history.

Finally, a consumer wants the disputed accounts reported as disputed because the notation can alter how the account is scored in credit scoring models. Some credit score models do not include disputed accounts when determining the consumer’s credit score. Accordingly, if a derogatory account is not scored, you will have a higher credit score than if the derogatory account was included.  As with all items in a consumer credit file, you should review the file so that it includes information that accurately reflects how you manage your credit history.

Should you dispute your inaccurate credit accounts on-line with the CRAs?

Credit Reporting Agencies are offering consumers the ability to dispute information on their credit report via a direct on-line option under the premise that the dispute will be resolved quicker and faster.  While CRAs are probably correct that the dispute can be processed faster on-line, I believe that it is difficult to provide the type of information necessary in an on-line dispute that is necessary to obtain the desired result of the removal of an inaccurate credit account from your credit report.  In my opinion, the best way to dispute an inaccurate credit report is with a descriptive written letter about the inaccuracy that includes attachments that support your position.

Under 15 U.S.C. 1681i (a)(1) of the FCRA, a credit reporting agency must conduct a “reasonable investigation” of disputed credit information after receiving notice of the dispute from the consumer.  Moreover, the CRA must provide the furnisher with all relevant information about the dispute after receiving the dispute from the consumer. By engaging in the on-line dispute process, a consumer is limiting the amount of information that can be provided, which could alter the quality of the reinvestigation process.

Credit Reporting Agencies presumably like on-line disputes because it allows them to process the disputes cheaper by eliminating the need for an employee to review a dispute letter with attachments. Because the consumer is directly entering information for the dispute, the CRA has the ability to blame the consumer for not providing enough information in the event that the dispute results in an otherwise inaccurate account remaining on the consumer’s credit report.  Given the siginificant drawbacks of engaging in the on-line dispute process, I personally would not dispute an inaccurate credit account on-line through the credit reporting agency. I would always send a full and complete written dispute letter with supporting documentation for the best chance to have the bad account removed from your credit report. For additional information about what happens to your dispute letter after you mail it to a credit reporting agency, please see my previous post:

http://yourfaircreditlawyernow.com/?p=61

 

 

Should you hire a credit repair company?

Boastful advertising claims promising to remove bad credit and raise credit scores are found on the Internet by companies that claim the ability to clean your credit history. Many of these claims are false, the actions taken to “repair” your credit may actually do more harm than good, and credit repair could impede your ability to raise your credit score. Given that you can dispute inaccurate information on your credit report for free, I  do not believe that consumers need to hire a credit repair company.  Moreover, the Federal Trade Commission often prosecutes unscrupulous credit repair companies under the Credit Repair Organization Act (CROA), and therefore, in my opinion,  a consumer is really taking a chance when hiring one of these companies.

The CROA is a federal law that regulates how a credit repair company contracts and performs its credit repair services for consumers. The stated purpose of the CROA is “to protect the public from unfair or deceptive advertising and business practices by credit repair organizations.”  15 U.S.C. 1679(b).  To achieve this purpose, the CROA requires that a credit repair organization provide mandatory disclosures at the the time of contract.  Among the required disclosures are: the total cost of the services as well as the payment requirements; disclosure as to all promises related to performance; and a description of what the credit repair organization will do for the consumer. In addition, the CROA prohibits the credit repair organization from receiving payment for services until those services are fully performed. The CROA also requires that the credit repair organization provide a prospective purchaser of its services with a three day right to cancel after the consumer signs the contract.  For more information on the pitfalls related to credit repair organizations, I recommend that you visit the FTC’s website at

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre13.shtm

An unrealized problem for many consumers that hire credit repair organizations is that credit reporting agencies are prepared for the tactics employed by the credit repair company, and consumers may hurt their credit file as result of engaging in “credit repair.” Many credit repair organizations try to game the credit reporting system by engaging in numerous and repeated credit disputes in an effort to trip up the credit reporting agency or furnisher based upon the timing requirements of the FCRA reinvestigation duties. In the long run, these activities can hurt a consumer because the efforts are often associated with deceptive statements regarding legitimately past due debt. A consumer should never make a deceptive statement about a credit account or allow a deceptive statement to be made on their behalf by a credit repair organization. Moreover, consumers with legitimate inaccuracies on their credit report and victims of identity theft are better suited to write their own credit dispute letters with attachments supporting their arguments.  Credit repair organization letters that I have seen are often short generic form letters that do not describe properly the consumer’s credit dispute.  You will get much better results in the long run by writing your own dispute letter without the cost of hiring a credit repair organization.  For my previous post on how you can write your own credit dispute letter, please see

http://yourfaircreditlawyernow.com/?p=36

 

 

 

 

How to Examine Your Consumer Report For Inaccuracies

When you request a copy of your “credit report” from a consumer reporting agency, you are actually receiving a document that is a consumer report often referred to as a consumer file disclosure.  Under the FCRA, a credit report is consumer credit information that a CRA provided to third parties like banks, car dealers, and mortgage brokers.  A consumer report is simply that same credit information, however it sent directly to you the consumer not a third party.  Pursuant to Section 1681g of the FCRA, you are entitled to receive an exact copy of the entire contents of the credit file that the CRA maintains on you that it sends to third parties as a credit report.

The consumer reports provided by Experian, Trans Union, and Equifax all have a different appearance and layout, but the types of information maintained on the report are basically the same.  Some furnishers only report to one of the three main CRAs, so an account may appear on only one out of the three credit files.  Moreover, if you obtain a consumer report from a third party vendor, the appearance and ordering of the information can change.  In general, there are five main groups of information that appear on all consumer reports including: background information, public record information, prior credit account history, inquiries, and FCRA required disclosures.

On the top of your consumer credit report, the CRA provides you with the background information associated with the credit file as well as a credit file number.  The background identifying information includes: name, address, former addresses, date of birth, partial social security number, and employment data.  You should check this information carefully to make sure that none of the information is inaccurate.  If you are the victim of identity theft, many times you will see information related to the identity thief such as addresses and dates of birth that are unrelated to your actual identifying information.  Make sure you dispute any of the information that is inaccurate as incorrect background information can cause erroneous credit accounts to be associated with your credit file. For information on how to dispute inaccurate information in your credit file, please see my prior post:

http://yourfaircreditlawyernow.com/?p=36

Following your background information, you will see public record information, which can be some of the most damaging information on a credit file.  Many credit denials are the result of inaccurate judgment information, inaccurate bankruptcy information, or inaccurate tax liens.  You should carefully review the reported public record information to make sure that no information related to another consumer has been mixed up with your credit information.

Next, you will typically see information related to your past credit accounts.  Some CRAs will list the adverse accounts in a separate section of the report, while others will simply report the accounts in alphabetical order.  Attention to detail is vital as you review these accounts because account number and creditor names can change. Because of these changes, it can be difficult to determine if a particular account is yours.  If you see credit accounts that are not yours or accounts that are reporting inaccurate late payments, include a description why the account(s) are inaccurate when you send a credit dispute letter to the credit reporting agency.

Following your credit account information, you will see information related to third party inquires into your credit history.  These inquiries will include both “hard inquires” and “soft inquiries.”  When reviewing your inquiries, please make sure that you either authorized the credit inquiry or that the creditor had a legitimate business reason for acquiring a copy of your credit report.  “Soft inquiries” do not affect your credit score and can be acquired by companies that want to establish a business relationship with you.  Be careful when dealing with companies that have acquired your information via a soft inquiry as in some instances they can be companies that have poor records with organizations like the Better Business Bureau.

Finally, all CRAs are required to provide you with important notices regarding your rights under the FCRA.  At the end of the consumer report, you should receive a summary of your consumer rights as well as a list of regulatory agencies that you may contact.  If you are reviewing your consumer report and notice anything unusual, inaccurate, or wrong, please do not hesitate to contact me at my office, 571-313-0412.

Inaccurate Credit Reports Because of Mixed Credit Files and Merged Credit Files

A mixed credit file or a merged credit file occurs when another consumer’s credit information is placed erroneously on your credit report.  Despite the fact that the responsibility for the debt is that of another consumer, a credit reporting agency will attribute that information to your credit report.  This situation can lead to disastrous consequences because the information can cost you a mortgage, a job, or to pay higher interest rates.

As you would expect, both furnishers and credit reporting agencies can be the source of the incorrect credit account that appears on your credit report.  Mixed credit files and merged credit files occur for consumers because of the manner that credit reporting agencies acquire and organize their data.  Originally, furnishers provide information to credit reporting agencies about consumer accounts.  Furnishers provide this data electronically by including identifying information like name, address, and social security number.  If the information provided by the furnisher to the credit reporting agency is incorrect or missing, then the credit reporting agency can match the information to the wrong consumer’s file.  Incorrect file matching occurs because the credit reporting agencies do not maintain one file for each consumer.  The credit reporting agencies maintain pieces of individual data in their records and then associate and match similar data based upon complicated algorithms that are proprietary secrets.  While these algorithms are closely guarded secrets, we know some information about the process through discovery in litigation of mixed and merged credit file cases.  Typically, a nine for nine social security number match is not required to associate one piece of credit information with a particular credit file,  and other criteria like name and address are factors into the decision as to which file to place a credit account.  A name and address alone may be enough for incorrect data to match to your file and cause a completely different credit file to ultimately merge into your credit file as part of the computerized matching process.  Accordingly, people with common names have a higher chance to be the victim of mixed and merged credit files.  Inappropriately merged credit files typically occur when an existing credit file begins to more closely match your credit file with the credit reporting agency. Identity theft victims also can have the identity theif’s actual bad credit merge into the good credit of the victim.

Common mixed credit file and merged credit file causes include:

  1. Transposition errors in social security numbers.
  2. Incorrect name being attributed to a social security number.
  3. Different versions of your name like nicknames and maiden names.
  4. Mismatching information related to Jr., Sr., and III suffixes

Correcting inaccurate credit information as a result of mixed credit files or merged credit files is accomplished in the same manner as any other credit report inaccuracy.  Please review my previous blog post on how to dispute inaccurate information information on your credit report.

If you would like to contact me with any questions, or potential referral to a lawyer in your area, please contact me at 571-313-0412.

How do I get a free copy of my credit report?

The FCRA requires certain credit reporting agencies to provide you with one free copy of your credit report per year. The important thing to remember is the correct website to visit in order to obtain your free credit report. The website is:

www.annualcreditreport.com

When you visit the website, you will need to know basic details about your financial life in order to answer security questions. Initially, you will enter obvious items like your name, address, and social security number.  As you enter a specific credit reporting agency website, you will answer more difficult questions about your financial history to verify your identity.  Examples include prior street address names and numbers, monthly payment amounts for certain debts, and maybe even the names of prior roommates.

You do not need to purchase anything to obtain a free copy of your credit report.  You may be solicited for optional items like credit scores and credit monitoring, but you need not purchase anything in order to see your free credit report.

Because their are three main credit reporting agencies, I like to review one free report every four months by staggering the individual reports that I obtain for free.  A good reference point is near your birthday with scheduled reminders to get another free report four months later.  By viewing credit reports in this fashion, you are getting periodic snapshots to make sure that no new inaccuracies are on any credit report.

I would print off and maintain in your records the copies of the reports that you obtain.  This creates a baseline snapshot of your credit file if you are ever the victim of identity theft, a mixed credit file, merged credit file, or multiple credit files.  Monitoring the contents of your credit file is important in protecting your future.  Do not delay, get a free copy of your credit report today.

 

Reporting Restrictions On Old Obsolete Credit Accounts.

If you were wondering when old, derogatory, yet accurate credit information comes off your credit report, there is good news and bad news regarding FCRA provisions that restrict the reporting of old or “obsolete” credit information on your credit file.  The good news is that the FCRA places significant restrictions on what old derogatory information may be reported on your credit file by a credit reporting agency.  The bad news is that in practice, the rules provide opportunities for unscrupulous debt collectors to “re-age” derogatory credit information, so it remains on your credit file longer than permitted by law.

With many exceptions, the general rule is that a consumer can expect to have derogatory credit accounts remain on their credit file for seven years. The date of the first delinquency determines the beginning date for calculation of the obsolescence period.  The end date for the reporting of derogatory information depends on the type of debt and circumstances surrounding the debt.  It is important to note that the date of first delinquency for the debt should not change if the debt is sold and is not altered by payment arrangements.

A credit reporting agency may report an account that is not charged off for seven years from the date of first delinquency.  An account that has been charged off or placed for collection more than 180 days after the date of first delinquency may be reported by the credit reporting agency for seven years and 180 days.  Finally, if the account is placed for collection or charged off before the expiration of 180 days from the date of first delinquency, the seven year period runs from the date of charge off or when the account is first placed for collection. Bankruptcy will remain on your credit file for 10 years, and different time periods apply for judgments, tax liens, criminal records, and certain student loans.

Sometimes a debt collector will “re-age” an old past due debt that should not otherwise appear on your credit file.  Re-aging occurs when the debt collector incorrectly reports the initial date of delinquency, commonly as the date that they acquired the debt. By reporting the account in this fashion, the seven year reporting period is improperly extended, which causes the collection account to remain on the consumer’s credit file longer than permitted.  Debt collectors like debts to remain on a consumer’s credit file because it provides them significant leverage to obtain payment on an old account.

If you are the victim of old information that should be removed from your credit report, your best recourse is to dispute the information with the credit reporting agency by informing them of the facts and circumstances supporting your position. For information on disputing inaccurate information in your credit file, please see my earlier blog post: http://yourfaircreditlawyernow.com/?p=36

In addition to FCRA claims against credit reporting agencies and furnishers related to old, obsolete credit information, the re-aging of collection accounts by a debt collector may also be a violation of the Fair Debt Collection Practices Act.  Given the different rules at play regarding this topic, you should not hesitate to contact a local consumer protection lawyer.  I am located in Virginia at 571-313-0412, but I would be happy to speak with you about your situation for a potential referral to a lawyer in your area.

 

Help, I AM the victim of identity theft!

If you have discovered that you are the victim of identity theft, I would recommend that you act quickly and decisively to stop the thief as soon as possible.  The main things that you want to do are: place a fraud alert on your credit files, file a report with your local police department, contact the creditors who have had fraudulent accounts opened or accessed by the identity thief, and file a complaint with the Federal Trade Commission.  As to these activities, you should consider the following:

FRAUD ALERT– As discussed in another blog post, you should place fraud alerts on your credit file.  The fraud alert should slow the identity thief from opening up any new accounts.  If you contact one credit reporting agency, they are supposed to contact the other two.  If you have confirmation of an identity theft problem, I would call or notify all credit report agencies.  The fraud alert numbers presently are:

Trans Union fraud alert phone number 1-800-680-7289

Equifax Fraud alert phone number 1-800-526-6285

Experian Fraud alert phone number 1-888-397-3742

NOTIFY LOCAL POLICE OF IDENTITY THEFT– You can call your local police and see what their procedure is for filing an identity theft police report.  You need to take the time to file a police report because creditors and credit reporting agencies typically want to see that you filed a police report as an indication that your claim is genuine.  Having a police report will also help trigger important identity theft victim rights under the Fair Credit Reporting Act. In the county of my residence, Fairfax County, Virginia, identity theft reports can sometimes be difficult to obtain in person because our county is so large and busy.  The following links should help people in Virginia report identity theft to the police:

Alexandria, Virginia identity theft police report information: Non-emergency phone number (703) 838-4444.

Arlington County, Virginia identity theft police report information: http://www.arlingtonva.us/departments/police/incident/new/start-report.html

Fairfax County, Virginia identity theft police report information: https://www.fairfaxcounty.gov/police/ficor/

Henrico County, Virginia identity theft police report information: http://www.co.henrico.va.us/police/contacting-henrico-police.html

Loudoun County, Virginia identiy theft police report information: http://www.loudoun.gov/Default.aspx?tabid=1912&zoom_highlight=identity+theft#checklist

Prince William County, Virginia identity theft police report information: http://www.pwcgov.org/docLibrary/PDF/005845.pdf

Richmond, Virginia identity theft police report information: http://www.richmondgov.com/Police/index.aspx

Stafford, Virginia identity theft ploice report information: Non-emergency phone number (540) 658-4450

CONTACT CREDITORS– Contact the creditor directly and request to speak to someone in the fraud department. You should keep a log of your contacts, including the name of the person, what they told you, and what actions that you took as a result of the contact.  You should send these creditors a written communication by certified mail with information about your identity theft, a statement that you did not open the account and/or make the disputed charges, and identify the police report number with investigating officer if possible.  My personal belief is that you must prove your innocence. Do not assume creditors will believe you, or that the creditor will do what they tell you that they are going to do, follow-up. Keep a separate file for each creditor and maintain copies of all documents that you receive or send to each creditor.  You may be asked to complete a fraud affidavit .  If you receive one, make sure that you complete the document properly and return it as soon as possible.

NOTIFY THE FTC– The Federal Trade Commission has wonderful and free resources for identity theft victims.  I recommend that you use the FTC website as a reference source.  The FTC also logs identity theft complaints in order to stop and slow down identity thieves.  It is recommended that you notify the FTC when you are the victim of identity theft.  You can call the FTC at 1-877-438-4338 or contact them on-line to report identity theft, http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/form-filling-instructions.html#HowdoIfilloutthecomplaintform

Dealing with the problems associated with identity theft can be time consuming and a roller coaster of emotions as you work through the situation.  If you have any questions or need any assitance, please contact me at 571-313-0412.

 

 

 

 

Help, I MIGHT have been a victim of identity theft!

I received a call this week in my Reston, Virginia office from a person who thought they may have been the victim of identity theft.   Ordinarily, this is not an uncommon event, but this situation was different because it was my wife.  I can tell you that it was a little unnerving to hear her tell me about the potential problem, and I have a new found empathy for people who may have been identity theft victims.

In my opinion, the first move at even the hint of a potential identity theft is to place fraud alerts on your credit files to alert potential credit grantors that you may be a victim.  With a fraud alert on your credit report,  you should stop or slow down the identity thief from opening up any new credit accounts. The system is supposed to work in a manner that allows you to contact either Equifax, Trans Union, or Experian. Once you contact the credit reporting agency and request a fraud alert, the first credit reporting agency is supposed to notify the other two credit reporting agencies.  At the time of this posting, the phone numbers to place a fraud alert on your credit file are:

Equifax fraud alert phone number: 1-800-525-6285

Experian fraud alert phone number: 1-888-397-3742

Trans Union fraud alert phone number: 1-800-680-7289

Next, I recommend that you obtain copies of your credit files from the credit reporting agencies.  After obtaining a copy of your credit file, check the open accounts to make sure that you initiated all of the accounts that appear on your credit report.  You should also check the inquiries to see if there are any credit inquiries that you did not initiate or do not recognize.  If you don’t see any new or unknown credit accounts or inquiries that you did not initiate, you might not have an identity theft problem.  I would recommend periodic monitoring of your credit files to make sure that no unauthorized accounts or inquiries appear on your credit report.

If you review your credit report and find accounts that you did not open or initiate, then you have moved from a potential identity theft victim to an actual identity theft victim.  At this point, you will want to go into full identity theft defense mode, which will be the topic of another blog post.

I would also recommend monitoring your existing accounts.  Call your credit card company to make sure there are no charges that you did not make.  Check to make sure no one has claimed to be a new authorized user of an existing account, changed the address on the account, or requested a new credit card for the account.  Check with you banking institution to make sure there have been no changes to any deposit accounts.

For more information from the Federal Trade Commission, I recommend: http://www.ftc.gov/bcp/edu/microsites/idtheft/consumers/detect.html.  As always, if you have any individual questions, I recommend that you contact a lawyer that specializes in credit report litigation in your area. For Virginia consumers, I can be reached at 571-313-0412.

 

 

 

 

Consumer rights regarding employment related credit reports.

Many consumers in Virginia, Maryland, and the District of Columbia are denied employment or fired because of inaccurate information in their employment credit reports.  If you have lost a job or job offer because of inaccurate credit or criminal information, you have very specific rights under the Fair Credit Reporting Act. Employment credit report cases are very complex, and it makes sense to consult with a lawyer regarding your specific situation.  Consumers have detailed rights as to employment related credit reports that a potential employer must disclose prior to obtaining an employment related credit report.

The FCRA requires that a potential employer provide a “clear and conspicuous” disclosure in writing before the employment related consumer report is procured or caused to be procured for employment purposes. This disclosure must be in a document that consists solely of the disclosure.  You are entitled to a separate, written disclosure that clearly discloses to you that a consumer report will be obtained for employment purposes prior to the time that a potential employer obtains a credit report.

Consumers also have specific rights prior to the time that an employer can take an adverse action based on or partially based on information contained in an employment related consumer report.  Prior to taking an adverse action, like not hiring a consumer because of information in a consumer report, the employer must provide a copy of the report and a description in writing of certain consumer rights.  The FCRA requires this disclosure so that a consumer may be able to correct any inaccurate information in their consumer report prior to the time that they are actually harmed by the information contained in an inaccurate employment related consumer report.

Many consumers lose employment because of inaccurate employment credit reports. These reports include information related  not only to late financial history, like charge-offs, judgments, and bankruptcy, but also include inaccurate felony convictions and criminal records. In a tough job market, employment offers will go to the next available candidate who need not explain why they were never convicted of a felony or other inaccurate reporting.

Consumers have very detailed rights as to employment related credit reports and are best served by contacting an attorney to discuss their specific factual scenario.  I would be happy to speak to you about your situation and potentially help you with your problem in Virginia or direct you to a local lawyer that may be able to assist you.