This is something I have wondered about for a long time. Lets say some dirtbag claims you own money that you paid or never owed (and you can prove). So he dings your credit report. I have heard it is very hard to get that removed. Instead of removing it why can’t you just sue him for the amount (and hopefully some more for being a pain in the @$$) and when you have the judgment use some of that to pay off what he claims you own him - and keep on repeting this till he tires of it and removes it?
Just a question (of the general type), not personal experence.
Let me qualify myself, as I am a manager for Trans Union, one of the three national credit reporting agencies.
First, only member companies can report information to a credit agency and get it slapped on your report. Most have to go through a qualifying process, and there data must be reliable or we dump it.
Most often, what you refer to happens at the collection agency level. That is, you dispute a doctor bill, and the doctor forwards it to XYZ Collection, who is a member of the credit agency, and they report the debt.
You can dispute it with us, but if the XYZ collection company verified it, it stays. Now you have to sue the collection agency or simply dipsute it directly with them or the doc.
If we find that a compnay is always reporting bogus info - or a high amount of it -, we cut them off. It costs us money to research the crap they report, so we don’t keep it.
For a collection company, having it on your credit report is good motivation for you to pay it, so they don’t want to lose their member status…or they can’t collect debts as effectively.
Follow up aggressively with any company directly if they ignore your claims. Unfortunately, some are forced to sue.
Give me your specific case details and I’ll give youn details on your rights and your powers.
Point the first - if by “some dirtbag” you mean an individual, it can’t happen. Credit reporting agencies work with businesses and governments (via public records of judgements, liens, etc.), not individuals. If I loan Joe Blow $100 and he doesn’t pay me back I can’t call up Equifax and “ding” his credit report. I could take him to small claims court and get a judgement against him. The judgement would show in the ‘public records’ section of his credit report.
Point the second - if by “some dirtbag” you mean a less than honest company, it could happen but there are safeguards in place. All credit reporting agencies are required to have dispute resolution procedures. You can put a remark on your own credit report with a detailed explanation of an item reported on your credit. If you have proof the debt was satisfied you can provide that proof to the credit bureau(s). They are then required to request that the company in question either refute your evidence or remove the item. Bear in mind, however, the credit bureaus do not work for you, they work for the member companies. Regardless of what proof you have the credit bureau is going to take the word of the member.
Point the third - If you do owe the money (and why else would you pay off) then: A) you wouldn’t win a judgement in court, and B) it’s not likely coming off your credit record. It is possible to negotiate removal of the item in exchange for payment but it’s not likely.
Point the last - If you can prove you do not owe the money and the company refuses to remove the item from your credit report you can take them to court (the company, not the credit bereaus). I doubt you would get a monetary judgement but you could get your credit report corrected.
Thanks Philster, but as I stated I don’t have a case - I’m just curious. I have heard many people complain on a radio consumer show (Tom Martino - the troubleshooter). People call up and state that they either paided the money or never owed it and have proof but the credit reporting agancy after getting the proof just calls up the collection agancy and asks if it’s true and takes their word for it. Is this basically the way it works?
I want to know if a consumer has any legal recorse to:
1 remove a credit ding
2 recover money from the placer of the credit ‘ding’
3 say hi to Opal
If you have “proof” the debt was paid, that would have to be in the form of a letter, from the company, stating the debt was paid in full. The account number or a reference number should be included. In a case like that, we’d delete the item in question (if it was frivolous) and block it from coming back.
NOTE: A paid debt does not “come off”. It is updated to paid/closed and stays on for seven years since the original deliquency, or from the date paid (if it’s a “good” account.) if the debt was ‘reported in error’, then it’ll come off,sice it should never have been there in the first place.
A few folks have recovered money from companies who reported bad debts accidentally, and failed to correct their records and the bureau’s records after being properly notifed.
Adding a statement to your report which indicates that you dispute a particular debt after it’s been verified is worth nothing…zippo.
I don’t think I know of many cases where someone sued a company and won that reported misinformation to a bureau, then verified it mistankingly, caused harm to a consumer. it has happened to the bureaus, and we paid up…but I think there was maybe one or two times a bank paid money for their repeated blunder.
The credit reporting companies usually get blamed, even thought we are a repository of info, not the creator of it. The new Fair Credit Reporting Act has harsher language for the companies that supply the credit bureaus with the data. Previously, the languag hardly implied they had to report accurate data…now it does.
Remember
Keep documentation to supply to the bureau and dispute the debt
Follow up with the company directly if they verify the debt.
When an item is disputed, sans documentation, we check with the source of the info. If they want to keep it, it stays, if they need to update it or delete it, we oblige.
Our responsibility is to make sure it reflects the way the furnisher wants it to reflect. The furnisher is responsible to report it accurately. They have the records, they report it to us…we are just a repository.
Unfortunately, as a rare exception, consumers have to sue the company that reported the debt in error (but the consumer has to show some loss that resulted…like a higher interest rate on a loan, based on a poor credit score, etc)
Philster, I understand what you are saying but have you thought of this:
You claim that you are a repository of information and it is the responsibilty of the givers of such info to make sure it is right. I would agree with you except that your company makes money SELLING this information.
This should put you right back on the hook.
If you sell this information then you should be responsible for the accuracy of this information.
Consider: Some company claims I owe money and I don’t or I dispute it. This should then be decided in a court of law and the COMPANY would have to take the initiative to sue me and the burden of proof is on them. However, since your company exists and has such power and influence, the company can decide to not sue and report it to you. Now I have to take the initiative and sue EVEN THOUGH NO COURT JUDGEMENT HAS BEEN PUT AGAINST ME.
If the amount is small and I need to buy a house, for example, I may be required to pay a debt I don’t owe or dispute WITHOUT A COURT JUDGEMENT. I believe this violates my rights and your company is right in the crosshairs of any suit of damages I may file.
I would be suffering damages as a direct result of your company and the time is coming when your company will be held liable. Your ‘we’re just a repository of info’ defense will not stand up unless you stop selling this faulty info.
The answer will be that you should not report this information until the company reporting has a court judgement.
BlinkingDuck: You can dispute a line on your credit report. You can even have it removed if it is not a valid record. But if the person claiming that you owe them money sends us the same data (i.e., that you owe them money) the following month, then it will go back on your report. Of course, if the reporting company has a valid claim, then the report line must stay.
It is the consumer’s (or business in my case, since I work with Business Credit data) responsibility to go back to the reporting party and resolve the dispute. The credit reporting companies can’t do it for you. All they can do is remove the bad record. The company making the claim has to remove it from the data they’re sending in.
JohnnyLA – That defense won’t hold up in the future. Because of your companies actions, I could suffer damages for something that YOUR COMPANY SOLD. If what you sold is faulty because there is no court judgement, then you could be held liable.
I’m not saying that is the way it is now. The way it is now is exactly like you say. However, it will change in the near future. Your company is hurting people and your company is helping other organizations bypass the legal process. This violates rights and will be changed.
Just be hopeful that the financial judgement against your companies does not destroy them. I would think that your company should be moving in this direction on its own in order to avoid the storm coming its way.
Honestly, why should someone be forced to pay/damaged financially because someone reported something to you without a court judgement? Do you honestly think this is right? Do you honestly think your company is not at fault? If you think so, you will be in for a rude awakening.
We have the most rigid and best documented procedures in place to ensure that disputed information is investigated as per the requirements of the Fair Credit Reporting Act.
Talk about an industry following the letter of the law…we’d be one. All actions are committed by bureaus on behalf of the consumer interest…not against it.
If you want to play Nostrodamus, and predict that there will be a precedent changing ruling by a federal judge, then go ahead. Your point is to predict that something will change? Such points via prediction will have to be told by the passage of time.
When my poor procedures become willful non-compliance with the federal law, then you have me. On every occasssion, the suing consumer lost, and federal law (new FCRA) has made it much clearer: The data furnisher is responsible for what he reports. Courts are going after them. You, unfortunately, have made your bold prediction at a time when the tide is shifting IN FAVOR of the reporting agencies, not against them.
>Your prediction flies in the face of everything the federal courts and the FTC are currently trying to accomplish via their hot pursuit of data furnishers.
The new FCRA made me create new and costly procedures, but they are well placed, thoroughly documented procedures that the FTC would be proud of. The FTC knows the issue: hunt down the data furnishers and penalize them.
The FTC has recognized the incredible role that national credit reporting agencies (TransUnion, Equifax and Experian) play in the US economy. It is one of the absolute main cogs that elevates this economy above all others. Read that again…and again.
Preservation of our credit reporting industry is vital to the economic health of the U.S.
Your prediction could not come at a more ridiculous moment.
One thing you and Johnny have said is that I have the right to dispute. If I don’t owe it and have no court judgement against me why should I bother with your company? If your actions hurt me financially, then this is a matter for the courts (probably a class action law suit). I don’t owe it. I have no judgement and yet I’m being hurt. A class action law suit will penetrate your defense in a few years.
I’ve read over my past messages and the way I wrote sounds like I have an emotional investment. I don’t. I have never been victimized by your company. Well, I did have something reported on once for $34 and I disputed it. It went off and came back on almost immediately. I ignored it. When I bought my house the mortgage person told me I had to pay it. I said no way in hell will I pay a debt not mine. He tried to reason by saying it’s ONLY $34. I still said no and the mortgage went through anyway.
So I haven’t been hurt and I agree that an organization like yours needs to exist. I just wish to point out that your organizations may be very vulnerable and for good reason.
Btw, Philster, don’t hang your hat on the government for protection. It helps to follow the government direction but the challenge will come from the courts.
BlinkingDuck: This sounds as if it might be headed for Great Debates.
First, let me say that it’s not “my company”. And I’ll be quitting in the not-too-distant future so that I can relocate. Having said that…
You don’t need a court judgement. If I charge something on my credit card, then I owe it. It’s a contract between me and my credit card issuer. If I buy a car, I have to pay for it. It’s a contract between me and my dealer. My balances, along with aging information, goes onto my credit report. It would be very difficult to require a court judgement every time people in this country made a purchase.
…
Okay I just talked to someone in Consumer. If an invalid line is removed from a credit report, there is a failsafe that keeps it from getting back on if it comes from the same reporting company. Let’s say AAA Loans says you owe them $100. You decide that you don’t. The first thing you should do is to get a letter from them saying you don’t owe them $100. Okay now you call Experian and say, “I don’t owe AAA Loans any money. Please remove it from my report.” Experian removes it. In a month or so the charge shows up again. Why?
AAA Loans could have “sold the debt” to Sharky’s Collection Service. Now Sharky’s is sending in the report line. Since the report line is coming from a different source, the consumer (you) need to dispute it with Sharky’s and have it removed from your report again.
The other thing to remember is that there are three credit reporing companies: Trans Union, Experian and Equifax. Disputing the line with one company does not remove it from the reports of the others.
The bottom line is that the consumer must prove that he does not owe a debt. Suppose you have an item that can be bought anywhere in the country from any number of stores. You go to a store and say, “I want to return this. It’s not what I wanted.” Most of the time they will ask for your receipt. Otherwise you could have bought it anywhere. You could find a new, unopened “thing” at a garage sale and take it to the store that charges the most for it and demand a refund. Without a receipt they’re not going to give you any money.
So whoever is saying you owe them money has to be shown proof that you don’t. Then you get them to write a letter to you to that effect and remove the line from their data. It is not the fault of Experian, Trans Union or Equifax that the lender did not remove the line. It’s the lender’s fault. So the consumer must resolve the issue with the lender, else the reporting companies become de facto lawyers in a dispute not of their making.
Johnny LA – It’s good to know that if a line is removed that it cannot be put on by the same company.
However, one line concerns me: You say “The bottom line is that the consumer must prove that he does not owe a debt”.
Why? Guilty until proven innocent? If I don’t owe the debt I don’t have to prove anything but the person making the claim has to prove that I owe him. If I say you owe me $10,000 do you owe it? No. You just ignore the bogus claim and I have to sue you to get my $10,000. Now, companies can bypass the legal process by using the credit reporting agencies. Now you can’t ignore it because your credit rating is hurt and you suffer damages because the credit reporting agencies have grown so successful that they are used everywhere. Now you can’t ignore my claim for $10,000 but must sue me. Why should you have to do this since you don’t owe it? Remember – Innocent until proven guilty!
On a similar note, why must I keep tabs on your records? Because it could hurt me? Well, if your product hurts me isn’t that cause for a suit against you?
Oh, Blink…remember what I said about “willful non-compliance”?
This means that my product could hurt you terribly, yet I bear no responsibilty. The data furnisher on the other hand would bear the repsonsibility.
If we are not willfully non-compliant with the FCRA, all your harm is worthless. We report it, investigate it, and move on. We are pretty much clear after this point.
This has been held up by the courts. And the FTC (aka THE GUV) doesn’t challenge us on these grounds. They put the language in the Federal FCRA.
Our willful negligence and non-compliance is what it would take for you to beat a national credit reporting agency. That is the law…the GOVERNMENT speaking…via congress…the LEGISLATIVE branch of the same government that runs the FEDERAL courts.
How can you prove something that doesn’t exist? does this even make sense to you? - It would seem that the person making the claim should have to show documentation - but that’s just me. As for the class action suit, Tom Martino is getting one ready - so we will see if the former decisions stands or it radically changes. Whatever happens it will most likely be a media event with the support to the consumer.
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How can you prove something that doesn’t exist? does this even make sense to you? - It would seem that the person making the claim should have to show documentation - but that’s just me.
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I was going on the assumption that the company claiming you owe them money has documentation that you incurred the debt. If they have documentation, you need to provide documentation to counter it – such as a cancelled cheque, a receipt for funds received, etc.
Consider buying a car. If I don’t pay for the car, the lender will report that I am delinquent. I call up Equifax or whoever and I say, “They’re lying! I don’t owe them anything!” Well, they have documentation that shows you owe a debt. It’s up to you to show that it’s already been paid.