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URL:  http://boards.fool.com/xtn-i-wrote-btw-disclosure-of-facts-can-be-30544852.aspx

Subject:  Re: Another expose on the credit reporting indus Date:  2/15/2013  4:29 PM
Author:  joelcorley Number:  306826 of 308882

xtn,

I wrote, BTW, disclosure of facts can be constrained by trade secret and non-disclosure agreements (contract). Those agreements can be buried in other contracts and be far from obvious...

To which you replied, Oh sure. I'm pretty confident that Joe Blow consumer doesn't have any such agreement with a CRA, or with any of his creditors. In fact most any credit agreement I've laid eyes on in my lifetime - excluding those cocktail napkin agreements used between family members borrowing money from one another - has language such that the consumer specifically agrees to disclosure.

My bigger concern was that the CRAs might require you to agree that the entire report and its contents are proprietary and you do not have the right to disclose it. Actually I've been told by potential creditors that the CRAs require something like that - that the information is proprietary and it cannot be disclosed in whole or in part - but I don't recall a CRA ever requesting that of me. Of course they could slip in such language at some point next time I go to sign up for a free report and I might not notice. Of course most people don't go around showing their own credit report to other people, so this is probably a pointless discussion...

You also said, Other problems I have with the 60 Minutes gig are as follows:

1. They say one in five Americans have a credit report that contains an error. They say that's a 20% error rate. No it isn't. Error rate would be number of trade line errors divided by number of trade lines.


Technically it is an error rate. As they say, "Figures don't lie..." 60 Minutes simply fails to point out that cumulative error in the trade lines actually makes it difficult to produce a low-error-rate report on an individual.

Of course fixing such high error rates requires them to invest resources in processing feedback - which was a valid point of the 60 Minutes piece, even if they didn't say it quite that way.

And, 2. They gloss over the notion of any errors originating with the reporting lenders, and imply errors are only the fault of the CRAs.

Very true. Creditors are the source of almost every error on a report. Of course the problem 60 Minutes is trying to highlight is that the CRAs don't handle feedback well. A good point they made was that if the CRAs don't send the documentation received from the consumer to the creditor for review, why would the creditor change the report? I mean if the mistake is obvious, the creditor might see it and fix it; but without that feedback, a lot of the more egregious problems become unresolvable.

Also, Now I certainly don't mean to be defending the CRAs. I agree with the overall premise of the report, in that they are a giant mess and make it very difficult for consumers to correct info. I just don't like the twisting of fact used to promote agendas. ...

Yes. The reporting appears to be structured to inflame opinions - not simply report how it is...

And, If a CRA comes back saying "Hey, your bank verified it," and you still think it's wrong, then sue your bank.

Agreed, assuming it's worth fighting over. Actually, I'd say sue them both and let the court sort it out. If the report is really wrong, then one or both of them is going to have to pay to fix it and pay you for your legal costs and damages - which goes back to my opinion that we could probably get both to do a better job if people actually sued them for their mistakes more often.

Also, If you've got a problem with mixed up identity, as did the lady in the 60 Minutes gig, then that's a different problem and needs a different solution.

The problem the woman had was that it was the CRAs that mixed up their identities - not her creditors. Personally I would agree that she had a fairly nightmarish situation. Also I would agree that it's probably the exception and not the rule. But she also deserved a very sizable punitive damage award because the CRAs ignored the evidence presented and continued to malign her reputation - which is essentially the definition of willful noncompliance ... and malicious libel.

All in all her case was interesting to me by itself. It didn't need the extra dramatization 60 Minutes added to try to make it sound like the CRAs are out to get everyone else. In fact I would have preferred to have heard more about the details of her fight rather than how we're all in danger. But then we get the dramatized pulp these guys think creates ratings...

Finally, I had one of those type problems. My own father's mortgages were showing on my report. I didn't complain. It was helping my score. Until a credit application clued me in to the fact that my apparent debt to income was horrible. Trans Union fixed the problem in less than a month. Maybe we need a law saying SS# is the only sorting field allowed, because it doesn't make sense to group by similar name and zip code, duh. Whatever the solution is... we aren't going to solve it unless we accurately state the problem. Running around yelling, "big evil corporation is trying to take away your rights" is dumb, I think.

Right. And sorry to hear you had a problem and glad at least Transunion fixed it. (What about the others?) I imagine what you encountered is a pretty common problem. Most young adults often share a residence with their parents. Add a similar name, an application for credit and you can make it difficult to sort out who is who.

I actually think the FCRA contains a workable solution, more or less. The problem is with both consumers and the CRAs not following it. (And I think consumers should be allowed to view their reports more or less on demand would help, but that's another topic.) The CRAs should actually want more feedback - participating in the system as laid out should improve the quality of their databases. But if they all balk at handling anything but the most common situations, why would they care? They all end up with pretty much the same [poor] quality database ... making it just the suite of services they offer as a competitive advantage from one CRA to another.

- Joel
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