Tag Archives: Inaccurate Reports

How a settled charged off debt should report on your credit report.

Disputing Credit Reports, FAQ, ,

When a consumer pays in full a charged off account the balance should credit report as zero with the appropriate status code, “Paid/closed-was a charge-off.”  If the consumer does not pay the full balance after a charge-off as part of a settlement, the account status code credit reported is “Paid in full for less than the full balance.” 

The credit reporting errors that our office sees most frequently related to paid charge-offs happens when the furnisher continues to report a balance after the consumer has made the settlement payment on the account.  The furnisher will continue to report an amount in the balance status even though it has accepted a settlement payment.  Credit report errors of this nature are particularly  frustrating because the credit report continues to report the past due balance as owed when the consumer has paid and settled the debt.  Consumers are contacting our offices looking for a Northern Virginia credit report lawyer who can assist them in having a settled charged off debt report correctly on their consumer credit report. If you have a credit report error, you should contact me at my office in Reston, Virginia at 571-313-0412.

Consumers often encounter a financial set back, which results in credit cards and loans being charged-off by the original creditor or a bankruptcy.  After an account is charged-off with a past due balance owed, consumers may wish to settle the debt for less than full balance owed as a means of beginning to rebuild their credit and credit file. If you are going to settle a past debt with a creditor or debt collector, I would recommend getting the terms of the settlement in writing prior to making any payments, so the obligations of the parties are clear.  Many creditors will not agree to delete derogatory items from your credit file as part of a settlement, but  they do have an obligation to report the debt accurately on your credit file after you make the settlement payment.  Based upon generally accepted credit reporting guidelines authored by the Consumer Data Industry Association, when an account is paid in full for less than the total amount owed, the creditor should report the current and past due balance as zero with a special notation that the account was paid in full for less than full balance.

Paid charge-off accounts credit reporting inaccurately are similar in nature to inaccuracies related to bankrupt accounts previously discussed.  While previous charge off accounts and bankruptcies are bad credit events in the past, the passage of time allows the consumer to rebuild their credit profile.  When credit report errors persist,  the consumer can never receive the fresh start to their credit that they have earned and should hire an attorney to assist them to recover damages for an inaccurate credit file.

 

Five Key Rights For Identity Theft Victims

Identity Theft,

If you are the victim of identity theft in Herndon, Virginia, you have five important rights afforded to you by the Fair Credit Reporting Act.  15 U.S.C. 1681g(d) states that identity theft victims have the following rights:

1.  The right to  place a fraud alert on their credit file.

As of the time of this post, the credit reporting agency fraud alert phone numbers were:

Experian fraud alert phone number (888) 397-3742

Equifax fraud alert phone number   (800) 525-6285

TransUnion fraud alert phone number (800) 680-7289

Remember an initial fraud alert stays on your credit file for 90 days and that you may request an extended fraud alert if you provide a valid identity theft report.

 2.    The right to receive free copies of their credit file.

The initial fraud alert  affords the consumer the chance to obtain a free copy of their credit file.  Consumers should review these copies to determine if the file has any items indicating identity theft including unauthorized accounts, unknown credit inquiries, or inaccurate address information.

3. The right to copies of documents relating to fraudulent transactions.

If a thief has used your personal information to open accounts, a creditor or other business must give you copies of applications and business records involving transactions related to the theft, provided that you ask them in writing.

4. The right to obtain information from a debt collector.

You can stop debt collectors when they improperly collect debts relating to inaccurate credit reporting or identity theft by requesting that the debt collector provide you with information related to the name of the original creditor and the debt.

5. The right to request that a credit reporting agency block identity theft information.

In order to invoke the identity theft blocking provisions under the Fair Credit Reporting Act, you should identify the information to be blocked, state that you did not incur or authorize the charges, provide proof of your identity, and provide a copy of an identity theft police report.

Please review my previous post for more information about remedying identity  theft in Herndon as well as the FTC’s website.  If you need to speak to a credit report lawyer about an identity theft or inaccurate credit reports, please contact me at my Reston office, 703-390-9205.

 

How does a credit reporting agency violate the FCRA?

Disputing Credit Reports, , ,

Two core provisions of the Fair Credit Reporting Act require credit reporting agencies (Experian, Equifax, and TransUnion) to adopt reasonable procedures to assure maximum possible accuracy and to investigate consumer disputes of credit information.   Violations can occur if the credit reporting agency creates an inaccurate mixed credit file by placing another person’s information on your credit file, notes a judgment on a consumer’s credit file that a court vacated, or provided any other inaccurate or misleading information on a credit report. 

One of the most common  FCRA violations for a credit reporting agency is based upon the failure to conduct a reasonable investigation of inaccurate information in a credit file after receiving a credit dispute letter from a consumer, which violates 15 U.S.C. 1681i.  After receiving notice of a consumer dispute, the credit reporting agency has a legal duty to review information provided with the dispute and conduct a detailed systematic investigation into the information that is reporting.  Experian was found liable for a negligent investigation of a consumer credit dispute, and the court stated, “When conducting a reinvestigation pursuant to 15 U.S.C. 1681i, a credit reporting agency must exercise reasonable diligence in examining a court file to determine whether an adverse judgment has, in fact, been entered against a consumer.  A reinvestigation that overlooks documents in the court file expressly stating that no adverse judgment was entered falls far short of this standard.” Dennis v. BEH-1, LLC 520 F.3d 1066 (9th Cir. 2008).  There are many other instances when a credit reporting agency can be held liable for violating the FCRA, and a consumer with inaccurate information on a credit report should not hesitate to contact a consumer credit report law specialist. Our office in Reston, Virginia has handled numerous cases involving inaccurate credit reports, and we have litigated inaccurate credit report cases in the Alexandria, Richmond, and Pittsburgh federal district courts.

As for maintaining reasonable procedures for maximum possible accuracy, 15 U.S.C. 1681e(b), requires a credit reporting agency not to just establish reasonable procedures, but to follow reasonable procedures for credit report accuracy.  The remedial purpose of the FCRA to protect consumers would not be achieved if the credit reporting agency simply maintained pro forma procedures without any meaningful effort to follow those procedures to assure accurate credit information.  Credit reporting agencies violate the FCRA when inaccurate information appears on a consumer credit report and the consumer presents evidence that the credit reporting agency failed to follow a procedure maintained to assure that type of inaccuracy does not occur on a credit file.  Because these procedures are confidential in nature, a highly specialized consumer lawyer that has reviewed credit reporting agency procedures for several years will typically be a consumer’s best resource to have inaccurate information removed from their credit report.

As with any credit report problem, I would be happy to speak with you at (571) 313-0412 regarding your inaccurate credit report for potential representation or referral to a specialist in your particular area.

How do you fix an inaccurate credit report?

Disputing Credit Reports,

Using the provisions of the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681, is the best way for a consumer  to solve problems associated with inaccurate information on their credit report.  Passed by Congress in 1971, the FCRA is part of the federal Consumer Credit Protection Act and regulates various entities involved in credit reporting.  The stated purpose of the statute at 15 U.S.C. 1681(b) is “to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a  manner, which is fair and equitable to the consumer regarding the proper use of credit information, as well as assuring confidentiality, accuracy, and relevancy.”

The banking system depends on accurate credit reports and inaccurate credit reports in Virginia, Pennsylvania, and throughout the United States hurt  consumers as well as lenders because inaccurate judgments, tax liens, and other trade lines undermine the integrity of the entire lending process.  Credit evaluation is a vital part of the life of consumers everywhere and can greatly impact the life of its victims.  Through the mechanisms and rights afforded by the FCRA,  incorrect items on credit reports for consumers in Virginia, Pennsylvania, and elsewhere can be removed and damages recovered for the entities responsible.   Please review this previous post for information on how to dispute inaccurate items in your credit report.

3 Notices From The IRS Indicating An Identity Theft Problem

Disputing Credit Reports, Identity Theft, ,

Identity theft involving IRS tax returns has become an ever increasing problem over the last four years. According to Treasury Department reports, more than five billion dollars in improper refund checks may have been issued to identity thieves in 2011 alone.  If you have an IRS identity theft problem, the agency has established a procedure to assist victims on the identity theft page of the IRS website. As identified on the IRS website, three types of IRS notices can indicate that you may have an identity theft problem with the IRS. The three notices or letters indicating a problem are:

  1. You filed more than one return.
  2. You have a balance due, refund offset, or collection action for a year that you did not file a return.
  3. You received wages from an employer that you do not recognize.

If you receive any of these notices and think that you may be a victim of identity theft, the IRS requests that you take immediate action via an IRS identity theft affidavit.  The details regarding how to complete the affidavit and more information about the process can be found on the IRS website.

If I believed that I had an IRS identity theft problem, after notifying the IRS,  I would also immediately obtain a copy of all three of my credit reports from the credit reporting agencies and look for the signs indicating an identity theft problem on my credit file. If you think that you have been the victim of identity theft, you can review my previous post on the actions that you can take to combat your identity theft problem including links to assist you with identity theft reporting in Virginia.  if you have any questions about how to review your file, I have also discussed how to review your credit file disclosure . For additional questions about identity theft or inaccurate credit reports, you can always contact me at 703-390-9205.

 

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.

 

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