Account Number Morphing – Still Another Barrier to Accurate Consumer Credit Reporting
The Federal Credit Reporting Act ["FCRA"] makes it mandatory for Credit Reporting Agencies such as Experian, Equifax and Trans Union “to follow reasonable procedures to assure maximum possible accuracy of the information in the [consumer's credit] report….” A willful and negligent failure to do so is violation number 1 of the FCRA. One wonders then when in fact it turns out that certain Credit Reporting Agency ["CRA"] procedures, or lack thereof, assure maximum possible inaccuracy of information in the consumer’s credit report. Are we to take it that the words of a federal law mean exactly the opposite of what they say? Legally, philosophically, morally, one would think not.
A “trade line” on your credit report provides certain standard items of information about an account you have, such as the name of the company ( say a department store, for example), the company’s address, the account number, the current balance on the account, the terms of the credit, and so forth. Any of this information could in fact turn out to be incorrect, but the item of information we will address in this article is that definite and critical identifier for the CRAs, the account number.
One would think that such a mundane piece of information as an account number couldn’t possibly cause that much trouble, and in a sense that is true. What actually causes the problem is when the account number for the same account gets changed, and sometimes morphed repeatedly, so that the identity of the actual account is greatly obscured. When this is allowed to happen, the CRAs’ super computers, employing simple logic but lacking intelligence, assume that an account is the same, or a match, when it has the same account number, and that it is different when it does not. Therein can lie the source of much headache, aggravation and damages for a consumer, and much denial of responsibility from the CRAs.
A example would be helpful here to illustrate. Let us say that Consumer A is receiving bills for a $600.00 balance on a department store credit card. Consumer A never applied for such a card and therefore the debt cannot be his. He suspects someone stole his identity and opened the account using his social security number and other private information. After numerous phone calls and letters back and forth, the department store agrees that it is not Consumer A’s debt after all and tells Consumer A not to worry about it, that they’ll “take care of it”. Naturally, Consumer A is now relieved and assumes that it will be “taken care of”, i..e., they will stop billing him for the invalid debt and it will be deleted from his credit report. The account number, by the way — let us say it is 1234567890 and that is the way the CRAs are reporting it on Consumer A’s credit reports. Consumer A notifies the CRAs by certified mail of the situation, along with documentation, and they all delete the previously reported trade line within a month.
About four months go by and Consumer A is dismayed to receive in the mail a letter from a Debt Collection Company named “Pit Bull”. Pit Bull, in its letter, states that it is collecting a debt on behalf of the department store (the same one that earlier told Consumer A not to worry about it, that they would take care of it and delete it from
his credit report.) Pit Bull shows the debt now as $850, having tacked on a $50 penalty and a $200 “default charge” or attorney’s fees), but informs Consumer A that, although he owes immediately the full amount of $850, they will take $450 as a full payment. They can’t guarantee Consumer A that the department store will reinstate him in good graces vis-à-vis his credit card (the one that was never his in the first place) but if he pays them the $450 at least they will stop dunning him. The account number on the letter is now 123DEPTSTRE890. A few months later Pit Bull furnishes the account 1234567890 as 123DEPTSTRE890 to the CRAs, showing the account as a “charge off”, amount $850, and a note that the trade line will be reported for the next seven years!
Consumer A is now distraught. He calls the department store and reiterates his story that the department store had earlier investigated, agreed with him that he did not owe the debt and that “they would take care of it” for him. These words come back to haunt Consumer A as the representative now tells him that they are sorry, the account is now with collections, and that they cannot interfere as it is now out of their hands. Consumer A also tries to clarify the situation with Pit Bull but, other than being cursed at and told to “pay the damn bill”, he gets nowhere. He disputes with the CRAs with certified letters, giving a full account of the situation and a statement that he categorically does not, and never did, owe the debt. Two of the three CRAs shortly thereafter delete the trade line from Consumer A’s report, but one of them does not. That one informs our consumer that they checked with the furnisher (Pit Bull) and the furnisher “verified” with them that the information they provided on the debt was valid.
Some more months pass and Consumer A starts feeling frantic. He tries to get refinancing on his home but is told he’ll have to clear up the derogatory trade line showing on one of his credit reports as a first step. He is also denied credit on a couple occasions which he suspects resulted from the same derogatory reporting.
Consumer A starts religiously checking his credit report, and discovers that now the account is being furnished by another collection company, Viper, Inc., and the account number has changed again, this time to “732******”. Our consumer becomes by this point very discouraged. He tries communicating with Viper, Inc. but they are just as nasty and, if anything, more venomous than Pit Bull.
At this point Consumer A finds an attorney firm that will take his case and initiate a lawsuit on his behalf. Among other things, the Complaint accuses the remaining CRA of a “reinsertion violation”. What the CRA had done in this example was “willfully and negligently violated the reinsertion requirements of 15 U.S.C. Section 1681i(a)(5)(B) in reinserting derogatory information onto plaintiff’s credit report after he had previously disputed it, without certification or notice.” (Even though the account number kept changing, it was still the same account being referred to all along. The CRA in question deleted, then reinserted the same account without notifying Consumer A, a no-no.)
After the account is deleted and then reinserted, the CRA fails to notify Consumer A within 5 business days that they are re-inserting the account information. The ironic twist to all this is that the CRA then argues that the “reinsertion” of the account was not their fault because it had a different account number, and how are they supposed to know that it was the same account?
How, indeed! It was the CRA’s own regulations, or lack thereof, that allowed the reinsertion to occur. The CRA argued that if they had known it was the same account, then they wouldn’t have reinserted it, and yet the CRA is the one who allowed Pit Bull, and Viper, Inc., and whichever entities came afterwards, to keep changing the account number on the same account; in short, in effectively disguising it from the CRA’s computer which only matches identities, not similarities or differences.
It is bad enough that the CRAs frequently take the word of disreputable or highly questionable collection entities over that of disputing consumers (See earlier article, The Seamier Side of the Credit Reporting Business) it is unconscionable that the CRAs allow collection entities to in effect cloak the identity of accounts even from themselves, the CRAs, and then blame it on the same system that they helped create! This bungling would be laughable if it didn’t happen to cause consumers so much frustration and pain.
Robert F. Brennan, Esq. is a principal with Brennan, Wiener & Associates, an AV-rated law firm in La Crescenta, CA.
Credit Reports From Experian and TransUnion, Are They So Good?
The ability to see your own credit report for free has taken America by storm. Many companies are overwhelmed with the amount of people requesting to view their credit report. A free online Experian credit report might be the way to go. Getting your free online Experian credit report is very simple. You just enter your details and within a few clicks of your mouse, you will be viewing your own free online Experian credit report.
If you want to use the free online Experian credit report, then you have to be aware of the charges that will occur if you do not cancel your online membership. Once you have signed up and used the free online Experian credit report, then you will have 30 days to cancel your membership if you do not want to use the service anymore. Otherwise you will be charged monthly on your credit card. A free online Experian credit report is a great way to check your credit rating from home. Also, if you are with Experian, then you know that you are with a very respected company that will always look after your needs. Experian (formally known as TRW) is a credit-reporting agency, which means that they have a lot to live up to. They always meet their customers’ needs and they have a very professional website; they know what people want when they request their credit report, and they know how to deliver something special.
The service offered by Experian is virtually unmatched by others. It seems that the only benefit that the other companies can offer you is that they can show you all 3-credit reports at once, including Experian, Equifax, and TransUnion. But Experian offers quality customer service as well as an easy to navigate website. The choice is yours.
A credit report score from TransUnion is a great way to get an up-to-date and accurate credit report. You know that you can trust your credit report score from TransUnion; this company is one of the three major credit-reporting agencies and will always have your name on their files. You can get your credit report score from TransUnion while surfing the web. Their website is easy to navigate and you can become a member within minutes. You can then pull up your credit report score from TransUnion on your computer screen within a matter of minutes.
You might find one day that your credit report score from TransUnion is different from a different company. You can then query this mistake and have it sorted out for you in a couple of days. Isn’t it better to find out this kind of mistake sooner rather than later? With the TransUnion website, you can get your credit report score from all three major credit-reporting agencies. This allows you the chance to compare and see if there are any errors that might appear. If there are, then you can get in touch with either on of the companies and inform them of the error on your statement. We all know that one small error can cause you a lot of problems, such as being turned down for credit. So it is best to always keep up to date with your credit reports.
A credit report score from TransUnion will let you know your chances of getting accepted for credit. You can just switch on your computer have a glance at your credit score and know if you will be accepted or not. If you want to keep your credit rating in a good standing, then you will need to keep up to date with any payments that could bring it down. Once you are out of the red, you will never want to go back.
Emanuele Allenti offers valuable tips and help about credit reports at best credit reports and cheap credit reports websites. Enter now!
Ways To Resolve A Credit Report Dispute
Under the Fair Credit Reporting Act the reporting company and the information provider are responsible for correcting any credit report disputes. However, they must first be made aware that you have credit report disputes. A person can report and correct errors in their credit report by following two easy steps.
Step one is to report your error to the consumer reporting company in writing and make them aware that you have a credit report dispute. Make sure you include all your personal information like your name, address, and a list of each credit report dispute that have. Remember to send your letter by certified mail to prove that you have initiated a credit report dispute. The consumer reporting company will then investigate your credit report disputes and respond in 30 days. If they find there is an error and the credit report dispute can be resolved by correcting it then they will forward the information to the other credit bureaus and your credit report will be revised.
After reviewing your credit report dispute the consumer reporting company may decide that they disagree with the items raised in your credit report dispute and decline to pursue the matter any further. They will send you all of the evidence that they have and the reasons for not pursuing your credit report dispute, along with a copy of your credit report.
Another way to handle a credit report dispute is to contact the particular creditor directly. Again, send the creditor a list of your credit report disputes in writing. Be sure to call your creditor and ask for the specific address of where credit report dispute issues need to be sent to ensure that there is no unnecessary delay in the credit report dispute being investigated. Many companies have a separate address for handling credit report disputes and it can take time for it to be forwarded to the correct address if you do not send it there initially. If you are correct in your credit report dispute and there is an error they will report the error to the credit bureaus and send you notification of the change.
Below is a sample credit report dispute letter :
Date
Your Name
Your Address, City, State, Zip Code
Complaint Department
Name of Company
Address
City, State, Zip Code
Dear Sir or Madam:
I am writing to dispute the following information in my file. I have circled the items I dispute on the attached copy of the report I received.
This item (identify item(s) disputed by name of source, such as creditors or tax court, and identify type of item, such as credit account, judgment, etc.) is (inaccurate or incomplete) because (describe what is inaccurate or incomplete and why). I am requesting that the item be removed (or request another specific change) to correct the information.
Enclosed are copies of (use this sentence if applicable and describe any enclosed documentation, such as payment records, court documents) supporting my position. Please reinvestigate this (these) matter(s) and (delete or correct) the disputed item(s) as soon as possible.
Sincerely,
Your name
Enclosures: (List what you are enclosing.)
John Rivers is the owner of Financial
Advisory Network. Visit his website and get online money management tips, resources for managing your finances, and more.
The Importance of Credit Report Monitoring
Credit report monitoring is a smart move for anyone these days. Credit report monitoring can provide an early warning if someone has committed identity theft against you, a problem that is becoming more and more prevalent as technology makes it easier for thieves to obtain confidential information that in years past would have been harder to get. By performing regular credit report monitoring you’ll be able to verify both the good and bad reports against you and make sure that they are accurate.
Another reason for regular credit report monitoring is the simple fact that credit reporting agencies do sometimes make mistakes. If you are the victim of an error, then regular credit report monitoring can help you find the error as soon as it occurs, or shortly thereafter and take corrective action. The sooner you know about a problem, the sooner you can fix it, and quick action is the key to assurance of accuracy and making sure that your credit report will help you and not hurt you. If you are not actively engaged in regular credit report monitoring you may never be aware of the problem.
Many people think that a credit report monitoring doesn’t matter in their lives, but we live in an age where credit reports are used as an indicator of trustworthiness by many companies and individuals. Having a poor credit report can get you turned down for an apartment, and having a good credit report can get you accepted. If you are not engaged in credit report monitoring you may have some nasty surprises in store. Credit report monitoring and taking corrective action when mistakes occur can make the difference in getting the job you want, or the promotion at your current place of employment. Even insurance companies sometimes check credit reports when deciding whether or not a person is a good risk for an insurance policy.
If you have negative points on your credit report that are deserved, then you can work to improve the report but you need to use credit report monitoring to be aware of them. If you have negative entries due to mistakes or identity theft, then regular credit report monitoring can inform you of this and allow you to fix the problem before it hurts you. With all the benefits that come from regular credit report monitoring, everyone should take time to check their own credit report. Credit report monitoring is made even easier by the legislation that every consumer is entitled to one free copy of their credit report a year. Credit report monitoring is most effective if it is carried out more than once a year, but it is a start.
S. Stammberger is the owner of Financial Advisory Network. Visit her website and get online money management tips, resources for managing your finances, and more.