All posts by Tom Christiano

The Two Main FCRA Violations Asserted Against Credit Reporting Companies.

Uncategorized,

Consumer lawsuits against Credit Reporting Agencies (CRAs) under the FCRA most commonly occur under two different statutory provisions. A consumer will allege that a CRA published inaccurate information on a credit report in violation of 15 U.S.C. 1681e(b), or allege that a CRA failed to conduct a reasonable investigation after receiving a consumer credit dispute notice in violation 15 U.S.C. 1681i(a). Other FCRA violations against credit reporting agencies can and do happen, but the bulk of the credit report lawsuits occur under either one and often times both of these statutory provisions.

1681e(b) claims center upon allegations that the credit reporting agency has published inaccurate credit reports without following reasonable procedures to assure the accuracy of the information reported. For some credit report inaccuracies, the CRA has published inaccurate judgment, bankruptcy, tax lien, or other derogatory public record information.  In some instances, information from another consumer will appear on your credit report. This scenario is referred to as a mixed credit file or merged credit file.  Mixed credit files can cause lots of problems for a consumer like a failed home loan purchase, denial of a home refinance, or even a job loss in some instances.  CRAs have a duty to assure the accuracy of the information reported and by reporting another person’s derogatory information on your credit report, the credit reporting agency may be in violation of the law.  You should consult a lawyer that accepts FCRA cases if you believe that you have a mixed or merged credit file.

1681i(a) of the FCRA is another major source of lawsuits between consumers and Equifax, Experian, and Trans Union. Under this FCRA provision, a credit reporting agency must conduct a reasonable investigation of disputed credit accounts and must notify the furnisher of the consumer’s dispute so that the furnisher may conduct their own independent investigation.  CRAs typically rely on an automated process that simply notifies the furnisher of the type of dispute by category.  After receiving the response from the furnisher, some lawsuits have shown that credit reporting agencies simply repeat the furnisher response without conducting their own independent investigation.  This is referred to as “parroting” and there have been instances in which punitive damages have been awarded against credit reporting agencies for parroting information and disregarding statutory duties to conduct independent credit report investigations.

For information on how you can dispute inaccurate information in your credit report or what happens to your credit dispute after you mail a dispute letter, please see my previous posts. If you would like to contact me about your particular sitiauation in Virginia or for a referral to a lawyer in your area, please contact me at (703) 390-9205.

 

The Four Things You Must Provide To Invoke Your Identity Theft Blocking Rights.

Identity Theft,

Unfortunately, when I meet with identity theft victims in my Reston, Virginia office, most do not understand the necessary steps that they must take to recover from the problems associated with identity theft.  A previous blog post discussed what you should do if you are the victim of identity theft which included police contact information so that identity theft victims in Richmond, Henrico, Stafford, Prince William, Loudoun, Fairfax, Arlington, or Alexandria may obtain identity theft police reports. This post will describe the protections that identity theft victims have under the FCRA’s identity theft blocking statute, 15 U.S.C. 1681c-2.

The identity theft blocking statute is a mechanism that allows identity theft victims to block identity theft related accounts from reporting on their credit report.  By invoking the block, the victim can begin the process of recovering their good credit history.  To invoke the block, the FCRA requires that the identity theft victim provide four things to a consumer reporting agency:

  1. appropriate proof of identity;
  2. a copy of the identity theft report;
  3. identification of the accounts related to the identity theft; and
  4. a statement from the consumer that the accounts are not related to any transaction by the consumer.

If a consumer provides this information, the CRA must block the identified information within four business days. Next, the CRA has to notify the creditors of the block including the dates that the block will remain in effect. Because various exceptions to the requirements exist in the statute, an identity theft victim would be wise to consult with a lawyer that specializes in identity theft issues.  I am always happy to speak with identity theft victims at 703-390-9205.

 

 

 

Why am I not getting my credit report after my request?

Disputing Credit Reports,

Previous topics have discussed how to obtain a free copy of your credit report, and how to review your credit report.  However, in some instances consumers have an initial credit report problem because they cannot get a copy of their credit report upon request.  Simple reasons like entering incorrect data, transposition errors, and incorrect responses to security questions could be the reason that a consumer does not receive a copy of their credit report, but a larger problem could exist because of the manner in which credit reporting agencies store data.

Credit reporting agencies receive information about consumers in bulk from furnishers, and they maintain that information as data in their computer system.  When a potential creditor or consumer requests a credit report, the credit reporting agencies place the information provided into a matching algorithm system that compares the data input with all the data that the CRAs maintain.  Because the matching algorithms are proprietary, we do not know exactly how they work, but it has been revealed in trial testimony that a nine for nine match of social security numbers is not a requirement for a particular piece of credit data to match to a credit file.  As a result, if pieces of furnished data are incomplete or inaccurate, the data will not match to an existing file which can cause mixed files, merged files, or multiple files.  Please see my previous post on mixed and merged credit files.

When consumers try to get a copy of their credit report and they are unable to receive the report, the cause could be that the credit reporting agency has a mixed or multiple credit file concern about the data.  The credit reporting agencies do not want to release the wrong consumer file about a consumer that did not request the information, so they typically ask for additional identifying information and release no credit file.  Credit reporting agencies do not want to release the wrong credit file containing another consumer’s information because they could be in violation of the FCRA at 15 U.S.C. 1681b, which regulates how consumer reports can be disclosed.

The problem for the consumers that I have seen is that even after providing verifying information regarding their identity, like driver’s license, social security card, or utility bill information, the credit reporting agencies are still not providing a consumer file disclosure as required under the FCRA at 15 U.S.C. 1681g.  Consumers have real problems in this scenario because they are unable to review the information that may be inaccurate and the source of credit denials.  If you have suffered through multiple attempts to obtain a copy of your credit file without receiving the report, I recommend that you talk to a FCRA lawyer about your situation.  Please feel free to contact me for ideas or suggestions to help you resolve your problem.

Obtain A Free Copy of Your Credit Report After A Credit Denial.

Disputing Credit Reports, Identity Theft

When a consumer suffers an adverse action after applying for credit, the Fair Credit Reporting Act requires the user of the credit report to send the consumer a notification of the credit denial if that user took the adverse action in whole or in part because of information contained in the credit report.  The credit denial letter has various requirements including notification of the reason(s) for the credit denial, notification of the credit reporting agencies that provided the user with the credit report, and notification that the consumer has the right to obtain a free copy of their credit report from the CRA.  The full rights of the consumer can be found at 15 U.S.C. 1681m(a).

Given that 15 U.S.C. 1681j(b) of the FCRA requires a credit reporting agency to provide a consumer with a free copy of their credit report after credit denial, consumers should obtain their credit file after receiving notice of the credit denial.  To enforce this right, the statute requires that the consumer request the free report within 60 days of receipt of the notification of credit denial.

It is always good to review a copy of your credit file even if you think you know the source of your credit problems. In many instances, consumers have derogatory credit accounts on their credit report that belong to another consumer, unauthorized accounts, or accounts that are reporting too much negative information for the circumstances.  Carefully review all of the accounts that appear on your credit report.  For suggestions on how to review the contents of your credit report, please see my prior post on the topic of how to examine your credit report:

Finally, adverse action letters can be your first notification that you have been the victim of identity theft.  If a consumer has an existing credit line and the bank closes that credit line because of derogatory credit references, the bank must send you notice of that adverse action including the identity of the credit reporting agency that provided the creditor with the credit report.  For identity theft victims, the derogatory identity theft related accounts will cause their creditors to close or limit existing credit lines because of the change in credit history.  Accordingly, a consumer should never ignore a notice of credit denial letter because it can be the first clue that an identity theft problem exists.  Remember that are important items to consider if you may have been the victim of identity theft.

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

Credit Scoring, Identity Theft,

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?

Disputing Credit Reports

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:

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

 

 

Should you hire a credit repair company?

Disputing Credit Reports

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

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

 

 

 

 

How to Examine Your Consumer Report For Inaccuracies

Disputing Credit Reports

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:

https://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

Disputing Credit Reports, Employment Credit Reports, ,

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?

Disputing Credit Reports, FAQ, , ,

The fastest way to get a free copy of your credit report is to obtain the report through www.annualcreditreport.com.  You may also obtain a free copy of your credit report by calling 1-877-322-8228, or through the mail by  completing  the Annual Credit Report Request Form and mailing it to: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.  The Federal Trade Commission also has a short video on free credit reports that you can review as well.

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 inaccurate credit reporting, 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.