Monday, February 11, 2013

CBS "60 Minutes" reports that consumers are not able to see their full credit reports, as loan officers can see them secretly

CBS 60 Minutes last night (Sunday, February 9, 2013) reported on the difficulty most average Americans have in getting Equifax, TransUnion, or Experian to fix errors on their credit reports.
The basic video is here.   It leads to a “CBS Overtime” video which should also be watched.

The most shocking fact on the video (as uncovered by a particular female consumer who sued one of the credit agencies) is that the credit report that the three major companies send you (through the mandatory free “annual credit report” mechanism) isn’t the same credit report that loan underwriters see,  I have never heard this myself.  And I worked in the credit industry (for Chilton, which became Experian after going through TRW) myself in the 1980s, in Dallas.
I do not know how this can be.  Is this against the law?  If a car, department store, or mortgage underwriter could see this “invisible” report , could your property or auto insurance company?  Could your employer?  Could the government or police?  This is unacceptable and shocking.
CBS also reported that most “disputes resolution” is done with offshore staff, in India or South America.  Calling 800 numbers does not work, and employees have little authority to fix errors.

These companies find it cheaper to settle lawsuits from consumers (which consumers win when they can afford good lawyers) than actually have to resolve disputes.  
I don’t think this was the case when I worked for Chilton.
I worked for a debt collector (RMA, or Risk Management Associates, now associated with ACB or Associated Credit Bureaus) near Minneapolis in the summer of 2003.  I believe that about 98% of the debts for people whom I called were probably valid.  But a few were in dispute and people had trouble resolving them.  It may sound hard to believe, but some consumers really did want to settle their problems. We actually followed the FDCPA and FCRA rules closely.

What I wonder is if the following video is really correct: 
This  CBS story needs to be followed closely.  

It's also useful to the link for the Federal Trade Commission (FTC) that stands behind the CBS story, here. An FTC study found that 5% of consumers had errors on their credit reports serious enough to affect their terms on loans.  Over 42 million reports (about 13%) had some errors.  And the study has apparently found that correcting errors is very difficult.  I will have to look and see whether Macy's "bait and deny" trick could be based on wrong information (Jan. 23, 2013).  In addition to less favorable loans, consumers could lose out on discounts.

Some employers and lenders feel that only consumers and employees (that is, individuals) can take "absolute responsibility" for their own records.  

Wednesday, February 06, 2013

IRS says policy changes needed for it to do a better job in stopping identity theft

There is a story by Matthew Weigert (Dec., 3, 2012) on FCW, “The Business of Federal Technology”, about the difficulties the IRS says it has in detecting identity theft in returns because of regulations in the way it contacts other agencies, particularly regarding health care (those would be HIPAA regulations).
The link for the story is here

The IRS does have its own YouTube video on how identity theft in tax returns can be stopped.