Credit bureau debt disputes using the Fair Credit Reporting Act

Credit bureau debt disputes using the Fair Credit Reporting Act are the topic of this blog post.  Credit bureau (CRA) debt disputes are submitted under the provisions of a pursuant to a federal law known as the Fair Credit Reporting Act (FCRA) found in Title 15 United States Code § 1681 et seq.  The FCRA was created by the United States Congress through legislation back in 1970 and has been amended several times.

The FCRA requires that any CRA who has received a debt dispute letter must conduct "a reasonable investigation" into the disputed information and remove anything they can't verify as accurate. Equifax, Experian and Transunion are popularly known as the “big three” CRA’s.  It is my personal opinion that the most effective way of disputing any debt with the credit bureaus is through the use of a detailed letter disputing the debt and providing as much information and documentation as possible along with the letter.

A recently created federal agency known as the Consumer Financial Protection Bureau accepts complaints at their website at http://www.consumerfinance.gov/complaint/ in the event that any CRA does not properly investigate or does not respond to repeated dispute letters sent by a consumer.

I cannot stress enough the critical mistake that some consumers make by submitting their debt

dispute to a CRA either online or over the telephone.  NO consumer should ever submit any debt dispute to a CRA either online or over the telephone as in most cases they will not have the opportunity to include enough information. It is true that Equifax, Experian and Transunion all prominently feature on their websites that you can submit your dispute online or over the telephone and it sounds much more convenient, however I strongly recommend that you submit any debt dispute through a detailed letter sent by certified mail, return receipt requested to all of the CRA’s that are reporting inaccurate or obsolete information on your credit report. 

Credit bureau debt dispute letters should be at least one full page if not more and should state in detail the fact as to why the information in the credit report is inaccurate as well as containing copies of documents that support the claim of inaccurate information being reported.   Do NOT send original documents to the CRA in any case as you may never see them again. It is also very important to keep several copies of the debt dispute letter and all documents that were provided for your records.

A lawsuit can also be filed against any CRA although in my personal opinion the filing of a lawsuit should be considered as a last resort. Consumers should be sure that they have copies of not only the debt dispute letter but all of the attachments that were sent along with it.  The reason for this is that in the event that you fail to provide the CRA with a detailed explanation of the dispute they may simply respond to any lawsuit by claiming that they are not liable as they did not receive adequate information to investigate the dispute.

Anyone who disputes a debt with a CRA should ensure that they save multiple copies of ALL evidence that could be used in court to prove that they have been damaged.   The consumer submitting the evidence should also include documentation that there is a factual disagreement about what happened to their debt dispute or disputes.  If you fail to save all of the evidence supporting your claim the CRA or the furnisher of the information may file a motion for summary judgment which could result in the case being decided by a judge instead of having a trial by jury.

The most important procedure to remember and to document is to copy and save in a safe place  the certified mail receipt that shows that the CRA received the debt dispute letter as the big three CRA’s are notorious for consistently losing or at least claiming to lose correspondence from consumers. Also important are any letters detailing all denials of credit that have been received as those are proof that a consumer may have been damaged by errors in their credit report.

Consumers should also be sure to include enough information in their debt dispute letter to make sure that the CRA or the furnisher of the information has copies of all documents relevant to the dispute for their review. They may not conduct a reasonable investigation of your dispute but at the very least you will be have proof that you sent the documents to them.

Consumers should also keep in mind that many CRA’s are somewhat unlikely to use the evidence provided to investigate any complaint.  The advantage of providing as much evidence as possible is that this will make it much harder for the CRA to later claim that the error is the fault of the consumer because they did not provide adequate information.

Another letter along with all relevant documents should also be sent by certified mail, return receipt requested to the furnisher of the information to ensure that the furnisher of the information cannot later claim that that the error is the fault of the consumer because they did not provide adequate information.

Although there are exceptions a CRA can be held liable under the FCRA for reporting negative information more than seven (7) years old and any bankruptcy more than ten (10) years old.  In most cases a court judgment can be reported for no longer than ten (10) years or the statute of limitations for enforcing a court judgment in the state where the judgment is entered which may be more than or less than 10 years depending on the particular state where the judgment was entered.   

Another issue to watch out for that should be properly disputed is what is known as re-aging of debt. This happens because debt collectors will often sell accounts to one another and occasionally they will report an inaccurate time causing the debt to be reported longer than it should.

Attorneys or parties that would like to view or download a FREE 3 page debt dispute letter to all three credit bureaus created by the author of this blog post can use the link shown below.

Sample dispute letter to credit bureau

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The author of this blog post, Stan Burman, is an entrepreneur and freelance paralegal who has worked in California and Federal litigation since 1995 and has created over 300 sample legal documents for California and Federal litigation.

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DISCLAIMER:

Please note that the author of this blog post, Stan Burman is NOT an attorney and as such is unable to provide any specific legal advice. The author is NOT engaged in providing any legal, financial, or other professional services, and any information contained in this blog post is NOT intended to constitute legal advice.

The materials and information contained in this blog post have been prepared by Stan Burman for informational purposes only and are not legal advice. Transmission of the information contained in this blog post is not intended to create, and receipt does not constitute, any business relationship between the author and any readers. Readers should not act upon this information without seeking professional counsel.
 

 

Abuses by debt collection companies and damage to credit reputation

Abuses by by debt collection companies and damage to credit reputation are the topic of this blog post.  This blog post was written by Georg Finder, an Orange County, CA, Credit Damage Evaluator (CDE).

The issue of abuses by debt collection companies is a very important one.  The law recognizes that legitimate debts should be collected to ensure the efficient functioning of the economic system. The law also recognizes however that abuses by debt collectors are a reality.  And some of those abuses, whether negligent or malicious, can give rise to claims for damage to credit reputation.

Some debt collectors and collection agencies are just doing a difficult job as best as they can. Others however have little or no regard for any abuses that they may inflict/impose on a consumer while collecting on a debt. Still others have little or no regard for adhering to ethical practices, as defined by state or federal laws. 

Common debt collection abuses that could give rise to a claim for damage to credit reputation include but are not necessarily limited to:

-           Reporting of information known to be inaccurate such as an inflated balance due or where the debt has already been paid in full or otherwise satisfied.

-           Balance Collections – common in medical billing.  The medical treatment provider accepts what the insurance company has paid settled-in-full, and then turns what it considers the unpaid amount by the insurance company as a balance due.   Sometimes they do not even bill the patient, and when the unsent bill is not paid, send it over to the collection agency,

-           False or negligent reporting of late payments when no late payments were made.

-           The sale or other transfer of an alleged debt between various debt collectors that results in multiple derogatory items appearing on a credit report for a single account.

-           The intentional and fraudulent practice of “re-aging” a delinquent account that is more than seven years old so it can continue to be reported in credit reports.

-           The negligent reporting of a derogatory item that is more than seven years old on credit reports.

-           Intentional or negligent reporting of a debt that is in fact owed by another person or is the result of identity theft.

Serving a consumer with legal process at an address where they have never lived, or where they have moved from several years before the alleged service in order to obtain a default judgment that is void for lack of valid service.

The knowing or unknowing use of unethical process servers who fraudulently claim that a consumer has been served with legal process when in fact the consumer was never served in order to obtain a default judgment that is void for lack of valid service. 

The law generally provides that consumers are generally barred from bringing certain actions for defamation against consumer reporting agencies, credit report users and informants. An action may be maintained, however, as to false information furnished with malice or willful intent to injure the consumer.  See California Civil Code §§ 1785.31, 1785.32; see also 15 USC § 1681h(e).

Section 1681m of the Fair Credit Reporting Act regulates the use of consumer reports. It prohibits a creditor from selling, transferring for consideration or placing for collection a debt where a consumer reporting agency has notified the creditor that the debt has resulted from identity theft. 15 USC § 1681m(f).

Section 1681m of the Fair Credit Reporting Act also states that if a debt collector acting on behalf of a third party is notified that information relating to a debt to be collected may be fraudulent or the result of identity theft, the debt collector must (1) notify the third party that the information may be fraudulent or the result of identity theft; and (2) upon request by the consumer, provide the consumer with all information to which he or she would otherwise be entitled if the consumer were not a victim of identity theft but wished to dispute the debt. 15 USC § 1681m(g).

This blog post is an excerpt from the book, 5 Steps to Successfully Recover Credit Reputation  Damage. 

If you would like to receive more information on credit damage measurement click here: www.creditdamageexpert.com  

Copyright Georg Finder, all rights reserved. Posted with the express permission of the author.

Georg Finder, an Orange County, CA, Credit Damage Evaluator (CDE), is an expert on credit reporting violations and credit damage measurement. He has more than 15 years experience evaluating credit reports and appearing for both plaintiff and defense.  Mr. Finder has authored numerous articles, including his upcoming book, Divorce credit smarter, not credit out-smarted. He is an MCLE provider on credit report issues and credit reputation damage compensation. Learn more about Georg Finder and his services at www.creditdamageexpert.com  

The creator and owner of this blog, Stan Burman, is an entrepreneur and freelance paralegal who has worked in California and Federal litigation since 1995 and has created over 300 sample legal documents for California and Federal litigation. If you are in need of assistance with any California or Federal litigation matters, Mr. Burman is available on a freelance basis. Mr. Burman may be contacted by e-mail at DivParalgl@yahoo.com for more information. He accepts payments through PayPal which means that you can pay using most credit or debit cards.



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