No. of Recommendations: 2
I am a little surprised no one has mentioned seeing this a couple days ago.

Bottom line? credit reporting industry has lobbyists that enable them to deny you basic rights with respect to the accuracy and protection of your own personal information.


http://www.cbsnews.com/video/watch/?id=50140748n


RS
Print the post Back To Top
No. of Recommendations: 0
I actually thought about posting it the other day because I saw people talking about it online.

I didn't see the 60 minutes report, but the article I read said 25% had errors, but only 5% had errors that change your credit score (I'm assuming many of the errors are slightly incorrect addresses, etc). I actually think for as huge a database as this is, that's not a crazy error rate. Anybody that has worked with databases knows how very hard they are to keep accurate.
Print the post Back To Top
No. of Recommendations: 3
I actually think for as huge a database as this is, that's not a crazy error rate.

The problem is that the CRAs make it impossible to correct many critical errors. Any paperwork sent is ignored. The only "confirmation" they do is ask the company making the entry if it is correct. As long as the fines are less than employing people to correct the problem, nothing is going to change.
Print the post Back To Top
No. of Recommendations: 0
The problem is that the CRAs make it impossible to correct many critical errors.

I agree they need to find a better balance on correcting these things. It can't be so easy that anybody can call and change these without documentation or give compan8ies the only say in them - as both parties have motive to lie about who owes who. There should be some way of independently establishing debt.
Print the post Back To Top
No. of Recommendations: 3
Lea77,

I think part of the problem is a large portion of the population still never checks their credit report. They either just assume they have good credit until told otherwise - or they *know* they've been delinquent and just assume the reason they can't get credit is their own fault. Of course I'm just generalizing - my only evidence to support such an assertion is anecdata - but it would help explain why the number is so high.

Another point is that a credit report actually tends to consist of hundreds of detail reports on dozens of individual trade lines. Yet it only takes one derogatory trade line to ruin an individual's credit.

You wrote, I agree they need to find a better balance on correcting these things. It can't be so easy that anybody can call and change these without documentation or give compan8ies the only say in them - as both parties have motive to lie about who owes who. There should be some way of independently establishing debt.

A better balance might be for more people to just sue them rather than sit back and accept it. Section 15 USC § 1681n - Civil liability for willful noncompliance of the FCRA allows a plaintiff to recover all costs and reasonable attorney's fees along with statutory, plus actual, plus punitive damages. This potentially is a better outcome than if you were suing for liable. If you have a *clear* case of the CRAs ignoring the evidence, you shouldn't hesitate to sue ... unless of course the reported error just isn't material enough to affect your credit. If it costs them enough, they'd change.

Of course part of the problem is that people with poor credit often lack the resources to fight a protracted legal battle on their own dime. So if anything needs to be done, it's probably that some group or agency needs to organize a group of law firms that take on the worst of such cases with little or no up-front financial commitment by the client.

Along the same line, it would be nice if the FTC would sue or could fine them for such mistakes. Or maybe Congress needs to expand the CFPB's mission to go after CRAs for systemic violations, since it appears the FTC has little real interest in it.

BTW, there are still errors on my own report(s) - so I'm technically one of the 20%. As of 6 months ago, I had no material errors; but the agencies insist on reporting prior addresses that were never mine.

One is the address of a bank. In that case I had had the bank deliver all of my mail to a local branch because I had documented the theft of mail from my mailbox. The bank itself did not report the address; but they had out-sourced the servicing of my credit card account to Citibank and they insist I lived there. The other address is my ex mother-in-law's. That's the address my ex forwarded her mail to when she left. Unfortunately the tax district forwarded my mail there too and while I eventually got them to change it back, the CRAs insist her address is now a prior of mine.

Actually once reported, I suspect the CRAs don't have a method of correcting this type of error. I've found no evidence that they actually re-query the creditor - even after I figure out who reported it and contact the creditor. I used to get really upset over it; but I've realized it only affects their stupid online identity verification services and doesn't actually lower my score. So as long as I kind of remember these addresses, I can pass the identity verification tests - even though the "correct" answers are lies.

- Joel
Print the post Back To Top
No. of Recommendations: 0
I'm sure lots of people don't check their credit report. Sad to say I haven't actually checked mine. I know I probably should, but I've always figured as long as I'm getting credit there is nothing seriously wrong. (I know this is not the best policy) If I did check it, I'm sure wrong addresses would bug me very much.

So as long as I kind of remember these addresses, I can pass the identity verification tests - even though the "correct" answers are lies.

I would be in trouble if you asked me to remember all my old addresses, let alone other peoples!
Print the post Back To Top
No. of Recommendations: 1
I agree that correcting errors should be easier, and I have a few other issues with the way our credit reporting/scoring system works too.

However I'm always annoyed when somebody claims something along the lines of, "...credit reporting industry has lobbyists that enable them to deny you basic rights with respect to the accuracy and protection of your own personal information."

Your personal information? Hardly. Sure, it's information ABOUT you, but it isn't yours. You didn't collect it, sort it, enter it, maintain it, etc. If I do research and write a report on somebody, for example, it is MY report. It can be about somebody else, but it is mine.

If that explanation doesn't satisfy you, then how about this one: The information is as much your creditors' as it is yours, and they have chosen - most likely with your contractual agreement - to supply it to the CRAs.

And exactly what basic right of yours are they violating? I read the Bill of Rights and I can't imagine what it is you're referring to. I think you're imagining things.

xtn
Print the post Back To Top
No. of Recommendations: 2
Lea77,

You wrote, I would be in trouble if you asked me to remember all my old addresses, let alone other peoples!

I think they only keep a certain number of them; but I know for a fact that they keep them for more than 7 years - which makes sense because they're not derogatory.

For myself, I lived at the same address for 18 years. However, the CRAs insist I had other addresses during that same time frame. Since then I've changed addresses twice. Maybe these wrong addresses will roll off by the time I retire...

As for remembering them - I just have to remember the name of the street. The identity verification systems ask multiple choice questions, which makes it easy to guess correctly. In fact anyone that knew me intimately (ex: aj485) would probably be able to guess all of the correct answers - which arguably means these systems aren't particularly good at detecting fraud by close friends and family members.

- Joel
Print the post Back To Top
No. of Recommendations: 3
xtn,

You wrote, And exactly what basic right of yours are they violating? I read the Bill of Rights and I can't imagine what it is you're referring to. I think you're imagining things.

The FCRA is based in common law Libel and Defamation. Making false and damaging statements on a credit report and refusing to correct them when presented reasonable evidence to the contrary would qualify as Libel, but the FCRA preempts and quantifies the processes and procedures required of CRAs to minimize tort claims against them and to encourage litigation against them when they fail in their duties under this statute.

So the "basic right" one has is against Defamation. The legal rights one has are explicitly spelled out in the FCRA. (And some states have their own more restrictive or punitive statutes.)

As far as I am aware, there are no real rights to privacy except those provided by law. However, what may be disclosed to whom by a CRA IS restricted by law. And of course it is libelous to knowingly make false written statements that cause injury to another party.

- Joel
Print the post Back To Top
No. of Recommendations: 1
Joel,

Thanks for your easy-to-understand analysis. I just don't think there is a "basic right" to avoid being defamed. I can defame you, and you can seek justifiable damages. Just like you say that rights to privacy are only those provided by law, any right against defamation is also only provided by law.

Of course it is libelous to knowingly make false written statements that cause injury to another party. I'm not arguing the following points; simply saying that arguments could be made around them: 1. The word knowingly creates problems trying to blame the CRAs of libel. 2. Subjectively, being turned down for credit might be considered good for the claimant; not injurious.

Any comment on my "it's not your data" position? Or were you okay with that part?

xtn
Print the post Back To Top
No. of Recommendations: 3
xtn,

You wrote, Thanks for your easy-to-understand analysis. I just don't think there is a "basic right" to avoid being defamed. I can defame you, and you can seek justifiable damages. Just like you say that rights to privacy are only those provided by law, any right against defamation is also only provided by law.

Well as far as I'm aware, there are no "basic rights" outside of law. The right to life and freedom of speech are both legal notions. For instance, without human law (or human intervention), there would be nothing except my conscience preventing me from taking a life.

With that said, if you have a right to free speech, one of its limits is my right to not be defamed. The right to defend yourself against defamation has actually been an accepted concept for centuries - much longer than the right to free speech. The concept of free speech is actually in response to the crown suppressing opposition through the courts with criminal charges such as seditious libel.

BTW, the decriminalization of defamation is actually fairly recent - something still not accepted in every country.

Also, Of course it is libelous to knowingly make false written statements that cause injury to another party. I'm not arguing the following points; simply saying that arguments could be made around them: 1. The word knowingly creates problems trying to blame the CRAs of libel. 2. Subjectively, being turned down for credit might be considered good for the claimant; not injurious.

Well ... not arguing, I would point out that the courts have repeatedly said that FCRA claims are rooted in libel law. So stating that a violation of the FCRA is libel is just me parroting court verdicts I've read. And inflammatory or not, I'm just stating the truth as I understand it.

As for the second item, you are quite correct.

This actually is one of the reasons filing a libel claim against a CRA without the FCRA was problematic. That's because for a normal libel claim to succeed, the plaintiff must prove they were damaged. However this is where the FCRA comes down the side of consumers - if the consumer can show the CRA failed to follow dispute resolution procedures outlined in the FCRA, the court can assume a minimum statutory damage. Without statutory damages and an award for legal costs, most violations wouldn't be worth pursuing even if you could prove damages. But just because something isn't worth pursuing financially for an individual doesn't mean it is right, defensible, acceptable in toto or in the nation's best interests.

Finally, Any comment on my "it's not your data" position? Or were you okay with that part?

What am I to say about that? Data wants to be free! (Paraphrasing Stewart Brand http://en.wikipedia.org/wiki/Information_wants_to_be_free ;-) Actually the courts have routinely said that taken individually, facts cannot be copyrighted. That implies they also cannot be owned, even if they are about you.

With that said, the law does routinely restrict under what circumstances and to whom sensitive personal information can and cannot be disclosed to third parties. If an individual is damaged by such a disclosure, they may have a basis for a claim. However, this doesn't mean they actually have ownership rights in the disclosed information - they simply have a right to a reasonable expectation that the information will be guarded.

I would also point out the CRAs and creditors do not technically own the information either. From what I've read the courts have ruled that a unique compilation of facts can be copyrighted, so if you get something like a credit report the report itself may be "owned" as presented by the CRA; but the individual facts contained within are definitely not.

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...

- Joel
Who's an engineer - not a lawyer...
Print the post Back To Top
No. of Recommendations: 0
I would also point out the CRAs and creditors do not technically own the information either. From what I've read the courts have ruled that a unique compilation of facts can be copyrighted, so if you get something like a credit report the report itself may be "owned" as presented by the CRA; but the individual facts contained within are definitely not.

This is similar to the copyright rules regarding cookbooks. Listing the ingredients does not fall under copyright provisions. Describing what to do with the ingredients: what is to be added to what, how high the heat is, and all the other things that go into cooking, can be protected.

Nancy
Print the post Back To Top
No. of Recommendations: 2
Joel,

Thanks again! I feel I am usually better off for any discussion I've had with you. Now...


So stating that a violation of the FCRA is libel is just me parroting court verdicts I've read. Well, some violations anyway. There are plenty of requirements that could be violated that wouldn't constitute libel. But I understand what you mean.

What am I to say about that? Data wants to be free! Okay, let's say I go along with that for the sake of argument. That implies the data doesn't belong to the consumer either, so end result of my logical analysis is the same: we cannot complain about the CPAs on the basis if it being "our" data.

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... 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.

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.

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

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. I mean let's be honest, some fairly large hunk of errors must originate with the lender who are reporting. And it isn't unreasonable - logically speaking - to expect them to believe the lender over the consumer in a large percentage of cases. I don't understand how we can hope to improve things if we don't state the problem accurately. If a CRA comes back saying "Hey, your bank verified it," and you still think it's wrong, then sue your bank. 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.

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.

xtn
Print the post Back To Top
No. of Recommendations: 3
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
Print the post Back To Top
No. of Recommendations: 0
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?

Joel,

I suspect that their overall sales pitch to their customers is about an overall improvement in risk assessment. As such, the benefit of reducing error rates probably won't provide enough greater benefit to their customers to offer payback on the increased cost. Just a guess. I mean it's a fair assumption that as a business, they are providing a "close enough" product at a price point acceptable to their customers. If there were enough benefit to reducing errors even further that their customers would pay more, making it worth the cost increase, then we would already see efforts being made.

xtn
Print the post Back To Top
Advertisement