Thursday, October 18th, 2012 at
The credit bureau Equifax agreed to settle charges brought by the Federal Trade Commission that the company improperly sold private consumer information. According to the FTC press release, Equifax was accused of selling information about consumers who were late on their mortgage payments. These “prescreened” lists of consumers were sold to Direct Lending Source, Inc., which in turn sold some of these same lists to companies who used the information to sell debt relief services and loan modification plans to consumers. The Fair Credit Reporting Act (FCRA) says that it is illegal to share a prescreened list for general marketing purposes, and is only allowed for “firm offers of credit or insurance.”
The FTC alleged that the prescreened lists included the names and contact information for millions of consumers, along with their credit scores and information about how tardy their mortgage payments were. The agency said that, by failing to control access to sensitive consumer information, Equifax was in violation of the FCRA. The FTC says that Direct Lending and its affiliates allegedly violated the FCRA and FTC Act by – among other things – obtaining the prescreened lists, reselling those lists without telling Equifax about the end users, and failing to control access to consumer financial information.
Equifax and Direct Lending have agreed to a proposed settlement. Terms of the Equifax settlement include payment of $393,000 and prohibitions regarding selling prescreened lists. Terms of the Direct Lending settlement include a $1.2 million civil penalty and prohibitions regarding using consumer reports without a permissible purpose.
Friday, July 8th, 2011 at
The Federal Trade Commission has reached a $1.8 million settlement with Teletrack, Inc., for alleged violations of the Fair Credit Reporting Act (FCRA). According to a press release issued by the FTC, the company sells consumer credit reports to businesses that typically extend loans to financially distressed consumers. Where the Teletrack crossed the line, though, was when it sold information in its database to marketers who wanted to target this demographic. According to the FTC, Teletrack’s “marketing lists” were “credit reports under the FCRA because they contained information about a consumer’s creditworthiness.”
Bureau of Consumer Protection Director David Vladeck noted, “The FCRA says a credit reporting agency like Teletrack can’t sell a consumer’s sensitive credit report information for mere sales pitches.”
The proposed settlement is subject to court approval.
Tuesday, January 18th, 2011 at
Last week, the U.S. Supreme Court denied an appeal by the credit reporting agency Experian, which was seeking to overturn the Ninth Circuit Court of Appeals’ decision in Pintos v. Pacific Creditors.
According to ACA International, the lower court ruled in favor of a consumer whose credit report was accessed by a debt collector who wanted to collect a deficiency balance for towing and impounding charges after the consumer’s car was impounded and sold. The Ninth Circuit ruled that the debt collector improperly obtained the consumer’s credit report, and that the credit reporting agency improperly furnished the report, thus violating the Fair Credit Reporting Act (FCRA).
The court said that two conditions must be met in order for a credit report to be accessed. First, the credit transaction needs to involve the consumer. Second, the transaction has to involve credit extension, credit review, or account collection. In this case, the towing and impounding charges were not part of a credit transaction.
Thursday, December 16th, 2010 at
A Reuters blog provides a timely reminder about the factors that can impact your credit score. It notes that “Your payment history contributes 35 percent of your score, the amount you owe is 30 percent, your credit history contributes 15 percent and 10 percent is attributed to newly opened credit. Finally, another 10 percent goes to the types of credit you carry.”
Given that many (if not most) people’s credit reports have at least one piece of false information, it’s important to check your credit reports regularly. The Fair Credit Reporting Act says that you’re entitled to one free report each year from the major credit reporting agencies. You can obtain those free reports at www.annualcreditreport.com. Many experts suggest that you stagger the requests, so that you can keep tabs on your credit reports throughout the year. So, for example, if you get your TransUnion report in January, you may want to get your Experian report in May, and your Equifax report in September.
Wednesday, August 11th, 2010 at
The Washington Post recently ran a terrific article on a debt collection practice called “debt tagging,” whereby debt collection agencies try to collect debts from consumers who may have the same name as someone who owes money, but who do not owe the money. Debt collection agencies often go several steps further, by tarnishing the credit reports of consumers who do not owe the debt in question. The Post mentions the $1 million Federal Trade Commission settlement with Credit Bureau Collection Services (CBCS) for debt tagging.
At the root of the problem is the debt buying industry, which purchases blocks of debt but which often gets little information about the consumer who owes money. So, for example, you might have been assigned a phone number that was once owned by someone who owed money, or you may have moved into an apartment once rented by someone with an outstanding debt. As a result, you may get collection calls or collection notices that simply don’t belong to you. All too often, the debt buyer hounds the consumer into paying, or dings his or her credit report.
The takeaway? First, demand validation of the debt. Second, check your credit report and dispute any debt that is not yours. Third, contact a fair debt attorney to assert your rights under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.
Thursday, June 3rd, 2010 at
If you’ve missed payments or have a debt collector on your back, your credit score may be in the basement. If you’ve been denied credit or anticipate needing to improve your credit in order to, for example, rent an apartment, you may be tempted by companies offering to repair your credit. The Federal Trade Commission (FTC), which is responsible for, among other things, enforcing the Fair Debt Collection Practices Act and the Fair Credit Reporting Act, has published valuable information on how to avoid being conned by credit repair offers. You can read the full reporting by clicking here, but here’s the bottom line:
* A credit repair company can’t legally do anything that you can’t do yourself. Paying them a hefty fee leaves you broke, and your credit report will still be in shambles.
* Credit repair companies may tell you to apply for an Employer Identification Number in order to start a new credit history. What they don’t tell you is that it’s a federal crime to obtain an EIN under false pretenses, and to misrepresent yourself on a loan application.
* You can dispute incorrect information on your credit report by writing to the credit bureau. Check out stopcollector.com’s information on disputing an item in your credit report.
* If you’ve been the victim of a credit repair scam, file a complaint with your state’s Attorney General. Your Attorney General’s contact information can be found by clicking here, and then clicking on your state.
Thursday, May 13th, 2010 at
As part of the pre-employment screening process, many employers ask applicants for permission to check their credit reports. For the potential employee who has poor credit, such a review can mean the difference between getting a much-needed job and being denied. According to a report by FOX Business, there’s a move by states and Congress to limit employers’ access to credit reports.
Legislators in 18 states and the District of Columbia have introduced bills to limit the use of credit reports in hiring decisions, and an similar amendment (called the Equal Employment for All Act) was introduced by Rep. Steve Cohen (D-TN) to the federal Fair Credit Reporting Act. California passed such a bill in 2009, but under pressure from the Chamber of Commerce, Governor Arnold Schwarzenegger vetoed it.
Although employers and consumer reporting agencies defend their use, saying that a bad credit report could be an indicator that a person is more likely to engage in corporate fraud or selling trade secrets, even TransUnion says that there’s no confirmed link. Lawmakers cite the irony that corporations that use credit reports in hiring decisions have likely contributed to poor credit reports by laying off workers.