Credit Report Errors

A February study from the Federal Trade Commission says that 20% of Americans have errors on at least one of their three credit reports (from Experian, Transunion and Equifax ) and that 5% had mistakes that "could led to them paying more for products such as auto loans and insurance."

http://www.mainstreet.com/article/moneyinvesting/credit/debt/cfpb-lowers-boom-credit-report-furnishers?puc=yahoo&cm_ven=YAHOO&utm_source=Sept+23+email&utm_campaign=9%2F23%2F13&utm_medium=email

Here’s a snapshot of relevant points from the FTC report:

• 25% of U.S. consumers found errors on their credit reports that could crimp their credit health.
• 20% of consumers had an error on their credit report that was corrected by the credit agency after the mistake was disputed.
• 80% of consumers who filed disputes had the mistake “modified” by the credit report agency.
• 5% of consumers had a maximum score change of more than 25 points, and only one in 250 consumers had a maximum score change of more than 100 points.

Credit reports are free through annualcreditreport.com, FTC officials note — and contact the credit bureau right away to fix a mistake. That’s especially important before buying a home, car or applying for a credit card or insurance policy.

CHASE TO PAY $309 MILLION REFUND FOR ILLEGAL CREDIT CARD PRACTICES

WASHINGTON, D.C. — The Consumer Financial Protection Bureau (CFPB) ordered Chase Bank USA, N.A. and JPMorgan Chase Bank, N.A. to refund an estimated $309 million to more than 2.1 million customers for illegal credit card practices. This enforcement action is the result of work started by the Office of the Comptroller of the Currency (OCC), which the CFPB joined last year. The agencies found that Chase engaged in unfair billing practices for certain credit card “add-on products” by charging consumers for credit monitoring services that they did not receive.

http://considerchapter13.org/2013/09/22/cfpb-orders-chase-and-jpmorgan-chase-to-pay-309-million-refund-for-illegal-credit-card-practices-approx-2-1-million-consumers-receive-full-refund/?utm_source=Sept%2023%20email&utm_campaign=9%2F23%2F13&utm_medium=email

: Previously Banned Fees Charged To Consumers Now Permissible For Visa And Mastercard Transactions

In November 2012, the U.S. District Court for the Eastern District of New York preliminarily approved a settlement agreement in the In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation. As a result, merchants may now charge their Visa and MasterCard customers supplemental fees to recover the cost incurred when credit cards are used as the form of payment

http://www.mondaq.com/unitedstates/x/237790/Financial+Services/Previously+Banned+Fees&email_access=on

Check Your Credit Report After Bankruptcy

A Creditor May Continue to Report a Debt

The most common way in which credit reporting errors are discovered is at the most importune time, a new credit application rejection. Old debt discharged in bankruptcy may still be reported as delinquent when the debts should have been removed or a settled debt is still listed as owed to the creditor.

The Inaccurate Reporting Maybe the Result of Credit Reporting Agency Negligence
While the Fair Credit Reporting Act was designed to protect consumers from faulty credit reporting there are often allegations of negligence against the three main credit-reporting agencies. You will need to send demand letters to each agency to clear up the errors.  If they refuse a suit may be necessary.

The Bottom Line, Check your Credit Report After Bankruptcy or Debt Settlement
Do not wait until you hear from a lender that there is a problem with your credit report. While experienced counsel can resolve these issues, the time for resolution may be outside the time constraints of a real estate purchase or new car loan application.

Bank Pay Day Loans

The banking version of payday lending, called deposit advance, is no better than its storefront cousin. For starters, the advance loan can carry an interest rate of over 300 percent. There is no fixed due date for repayment. Instead, the bank repays itself from an electronic deposit into the borrower’s account. A new study from by the Consumer Financial Protection Bureau says these transactions are anything but harmless, one-time deals. Three-fourths of the loan fees are generated by consumers who borrow more than 10 times in a 12-month period. Overdraft fees deplete the borrowers’ meager resources, causing them to borrow again and again — and pushing them deeper into the debt trap.

Personal Data Usage

In question is nonpublic financial information of consumers and customers as such terms are defined in the Gramm-Leach-Bliley Act of 1999. According to the U.S. Code (USC), the term “nonpublic personal information” means personally identifiable financial information that is “provided by a consumer to a financial institution, resulting from any transaction with the consumer or any service performed for the consumer or otherwise obtained by the financial institution.”


The operative phrase is “financial” information. This, of course, would include account numbers, account balances and other nonpublic financial information regarding the consumer, including the fact that the consumer is in default. It does not, however, include property and other public records or information widely available through published telephone books, Internet social sites, etc. Nor does it apply to identifying information - such as a name, address or phone number - so long as the identifying information is not linked to the nonpublic information. the information can be shared with and by persons and entities seeking to assist in enforcing the transaction. Nothing in the codes calls for consent, written or otherwise, by the consumer. This is clearly not an oversight by Congress, as the Fair Debt Collection Practices Act (FDCPA) makes specific provisions for some requirements to be in writing, but not for others. The issue of financial institutions sharing consumer nonpublic information is generally covered under Section 313.1 of the Code of Federal Regulations (CFR)

The Road to Recoverying your Credit

Once a debt is discharged by the court a creditor no longer has the right to collection efforts. However, unscrupulous creditors such as collection agencies and debt buyers will continue to pursue collection efforts. Debt buyers will often base their business models around the collection of debts that can no longer be collected legally, such as those that have been discharged in bankruptcy. Additionally, we see where creditors will continue to report debts as still owed, in violation of the Fair Credit Reporting Act.

The perpetual entrapment of people in a virtual debtor’s prison is unconscionable.   Check your credit report 3 months after bankruptcy, file with the bureaus to correct wrong information, 3  months latter pull your credit again and make sure the file is correctly updated, do this again 3 months later then once a year.

Credit Bureau's VIP List

The credit rating bureaus, whose reports influence everything from credit cards to mortgages to job offers, have a two-tiered system for resolving errors - one for the rich and powerful, and the other for everyone else, according to a New York Times report yesterday. The three major agencies, Equifax, Experian and TransUnion, keep a V.I.P. list of sorts, according to consumer lawyers and legal documents, consisting of celebrities, politicians, judges and other influential people. Those on the list get special help from workers in the United States in fixing mistakes on their credit reports. Any errors are usually corrected immediately, one lawyer said. For everyone else, disputes are herded into a largely automated system. Their complaints are often electronically ferried to a subcontractor overseas, where a worker spends, on average, about two minutes figuring out the gist of the matter, boiling it down to a one-to-three-digit computer code that signifies the problem and sending a dispute form to the creditor to investigate. Many times, consumer advocates say, the investigation translates to a perfunctory check of its records.

http://www.nytimes.com/2011/05/15/your-money/credit-scores/15credit.html

Interest Rates

U.S. Rep. Barney Frank (D-Mass.) today introduced a bill that would let interest rates be set only by Federal Reserve officials picked by the government, a new attempt to move power away from regional Fed officials chosen by the private sector, The Wall Street Journal reported today. The bill would remove from the 12-member policy-setting Federal Open Market Committee the five members who represent regional Fed banks. Only the seven-member board in Washington, which currently has two vacant seats, would get to vote on interest rates. The congressman said this would make the Fed more democratic and increase "transparency and accountability on the FOMC" by eliminating those officials who are effectively picked by business executives. Analysts said Frank's new proposal could hurt the Fed's independence from Congress. "Setting interest rates...that's a public function. And the Federal regional presidents are picked by private citizens," Frank, the ranking member of the House Financial Services Committee, told CNBC. However, not letting regional Fed presidents have a say in monetary policy would be "tragic," Hoenig said today. The banks allow the public around the country to have an input on the Fed's decisions, he argued.

http://www.gpo.gov/fdsys/pkg/BILLS-112hr1512ih/pdf/BILLS-112hr1512ih.pdf

Rebuilding Your Credit After Bankruptcy

Financial:


http://www.bankrate.com/ and http://www.hsh.com/- (free) sites offering information on interest rates for credit cards, autos, mortgages and links to the prime rate and the LIBOR rate. the site also lists offers for low interest credit cards.



Budgeting:

http://www.mint.com – (free) budget creator for managing household expenses

http://www.choosetosave.org/ (free) calculator designed to help folks save for retirement



Charity:

http://www.irs.gov – look up where your money is going (type in the search box “charities”); make sure your donations are going to the right place and then make sure you take the deduction on your tax return.



Continue to Learn:

http://www.sesameworkshop.org/ – site offers videos and basic money lessons from Elmo. It is never to early (or late) to learn the basics of money and simple budgeting. PNC Bank also gives out these DVD's for free.

http://www.careprogram.squarespace.com/ – program offered by bankruptcy courts around the country to educate elementary and high school children about money and budgets. If your school doesn’t offer the program, call the principal and ask why?



Credit Reports:
http://www.annualcreditreport.com/ – links to three credit reporting agencies, Experian, Equifax and Transunion. You are able to get one free report from each every year.

My clients are advised to get the three credit reports about 30 days after their bankruptcy is complete and to check the credit reports for outstanding balances and accuracy. If items are reported inaccurately, you should see your bankruptcy attorney.

http://www.chexsystems.com/  and – www.telecheck.com — both are another kind of credit reporting agency.

These provide service to banks and credit unions before a new account is opened. I advise my clients to get these two reports too.

Dunn & Bradstreet- business credit reports

Staute Limitations on Debt- Florida

Statute of Limitations
The statute of limitations on debt is the maximum time the debt collector can use the courts to collect a debt from you. Even though the statute of limitations has expired, the collector may still call you or may even file suit against you in court. To stop calls, send a cease and desist letter to the collector. If the collector files suit against you, attend the hearing prepared with evidence that the statute of limitations on the debt has indeed expired.
 
The statute of limitations on debt in Florida puts a time limit on the amount of time you can be sued for a debt.

Oral Contract: 4 years

Written Contract: 5 years

Promissory Note: 5 years

Open-Ended Accounts: 4 years
http://credit.about.com/od/statuteoflimitations/g/flsol.htm


State By State List
Each state has its own statute of limitations on debt - the amount of time the court will force you to pay a debt. The statute of limitations varies depending on the type of debt you have - credit card or loan - and is usually between three and six years, but is as high as 10 or 15 years in some states. Before you respond to a debt collection find out the debt statute of limitations for your state.

http://credit.about.com/od/statuteoflimitations/a/entirestatesol.htm


Debt Validation
The Fair Debt Collection Practices Act, FDCPA, gives you the right to verify debts from debt collectors. Within 35 days of being contacted by a debt collector, you can send a letter requesting the collector validate your debt. This validation needs to include some documents from the original creditor proving you owe the debt, the amount you owe is valid, and the agency is allowed to collect the debt from you. Your request for validation must be made in writing and should be sent via certified mail with return receipt requested.

Cease and Desist
You have the right to request the collector to stop contacting you. By sending a written cease and desist letter to the debt collector you can have the collector stop communicating with you about the debt altogether, regardless of the legitimacy of the debt. Such a letter should be sent via certified mail with return receipt requested. If the collector violates this request, you can take legal action.


Credit Report Dispute
If you’ve requested validation of the debt and the debt is still in the 30 day validation period or the collector has failed to respond to the request altogether, the collector cannot legally add the debt to your credit report. In either of these cases, you can have the account deleted from your credit by submitting a credit report dispute. The case for the dispute is stronger if you include a copy of your debt validation letter along with the certified and return receipt requests.

Get a Free Credit Report
There are specific get a free credit reports under FACTA.
Online, by visiting http://www.annualcreditreport.com/
By phone, by calling 877-322-8228.
By mail, by printing a request form (Adobe viewer needed) and mailing it to the address listed on the form.

Federal Reserve Must Face Bank Suit over Credit Card Fee Rules

Federal Reserve Chairman Ben S. Bernanke lost a bid to end a bank lawsuit challenging the legality of forthcoming rules limiting the amount of money the largest U.S. banks can collect for debit card transactions, Bloomberg New reported today. U.S. District Judge Lawrence L. Piersol in Sioux Falls, South Dakota, yesterday denied the U.S. government's request to throw out the case filed last year by TCF National Bank. He also rejected the bank's request to block the regulations and allowed the case to move forward while Congress debates the issue. TCF bank, a unit of Wayzata, Minnesota-based TCF Financial Corp., sued Bernanke and the Fed's Board of Governors in October challenging the legislation appended to last year's Dodd-Frank financial regulation overhaul bill. The provision, sponsored by Democratic U.S. Senator Richard Durbin of Illinois and known as the Durbin Amendment bars banks with more than $10 billion in assets from collecting from retailers more money per debit-card transaction than the actual cost of providing that service.

http://washpost.bloomberg.com/story?docId=1376-LJ3PXT07SXKX01-48EHHUQPFG0J5D1V26EGBPA3TJ

ATM Fees Heading Higher

Some of the nation's biggest banks are imposing a variety of new fees on people who withdraw money from automated-teller machines, the Wall Street Journal reported today. JPMorgan Chase & Co., TD Bank Financial Group, and PNC Financial Services Group are already changing their ATM policies to collect more fees. JPMorgan's Chase retail division, for example, is going after noncustomers who withdraw money from the bank's ATMs. Chase executives have grumbled about customers of rival banks using the company's machines even though it charges them $3, which is standard in the banking industry. Chase is now testing fees of $5 and $4 in Illinois and Texas, respectively, for noncustomer withdrawals.

Dodd-Frank Making Matters Worse

Fourth quarter data from CoreLogic reveals negative and near-negative equity mortgages account for 27.9 percent of all residential properties with a mortgage nationwide, and the company says recent legislation could make a gloomy situation even darker for the hardest-hit states. Negative equity increased in the last quarter of 2010, rising from 10.8 million properties underwater in the third quarter to 11.1 million in the fourth. Today, about 23 percent of all residential properties with a mortgage are already underwater.

http://www.dsnews.com/articles/with-negative-equity-still-rising-dodd-frank-could-make-things-even-worse-2011-03-08

FTC Seeks Return of More Than $275 Million in Billing Scheme

A federal court has frozen the assets of corporations and an individual behind a vast Internet enterprise that allegedly made more than $275 million after luring consumers into "trial" memberships, and bogus government-grant and money-making schemes, Collections & Credit Risk reported on Tuesday. The court froze the assets of 61 corporations (collectively known as "I Works") and their alleged leader, Jeremy Johnson. It placed assets for these defendants under the control of a court-supervised receiver to help ensure that funds are available for consumer restitution when the case is concluded.


http://www.collectionscreditrisk.com/news/ftc-seeks-return-of-more-than-in-massive-billing-scheme-3004892-1.html?zkPrintable=true

Free Credit Reports Yearly

https://www.annualcreditreport.com/cra/index.jsp

United States: Red Flags Rule Now Excludes Lawyers, Doctors, and Other Professionals

http://thomas.loc.gov/cgi-bin/bdquery/z?d111:S.3987:

On December 18, 2010, President Obama signed the Red Flag Program Clarification Act of 2010. Effective immediately, the act changes the definition of the word "creditor" in the FTC Red Flags Rule to exclude most professionals that take payment after rendering services.  LexisNexis has a great website on Red Flags Rule, if you would like more information


The Red Flags Rule requires "creditors" and "financial institutions" to address the risk of identity theft by developing and implementing a written prevention program. As originally written, the Rule defined "creditors" using a very broad definition covering all businesses or organizations that regularly defer payment for goods or services or provide goods or services and bill customers later. As the FTC noted in its own guidance on the Rule, this definition included most lawyers, medical providers, accountants, and other professionals. Professional organizations such as the American Bar Association objected in the courts and to Congress that the definition of creditor was broader than necessary to reasonably address identity theft, and pointed out that most legal, medical, and financial professionals are already subject to requirements to protect personal information.

The new definition eliminates from the scope of the definition businesses that merely bill consumers for services previously provided, which was the reason many professional organizations were covered. Instead, the Act specifies that the term "creditor" applies only to a business or organization "that regularly and in the ordinary course of business— (i) obtains or uses consumer reports, directly or indirectly, in connection with a credit transaction; (ii) furnishes information to consumer reporting agencies, as described in section 623, in connection with a credit transaction; or (iii) advances funds to or on behalf of a person, based on an obligation of the person to repay the funds or repayable from specific property pledged by or on behalf of the person." The third item does not include funds advanced on behalf of a person "for expenses incidental to a service provided by the creditor to that person."

The Red Flags Rule was originally scheduled to take effect on March 1, 2008, but enforcement has been postponed several times. Most recently, enforcement was delayed from June 1, 2010 to January 1, 2011 at Congress's request. Those entities that still qualify as creditors under the revised definition should be prepared to comply by the new year, as Congress's stated reason for the extension was to pass this legislation.

For a full summary of the Red Flags Rule, see the previous summary from Digestible Law @ http://www.digestiblelaw.com/?entry=856.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Thanks Mondaq.

FEDERAL RESERVE PROPOSES TO INCREASE CONSUMER CREDIT, LEASE-PROTECTION LIMITS TO $50,000

The U.S. Federal Reserve proposed two rules that would raise consumer protection coverage limits for credit transactions and leases, Bloomberg News reported yesterday. The rules would increase the limits to $50,000, according to the Federal Reserve, and amounts will be adjusted annually to reflect any increase in the consumer price index. Consumer loans of more than $25,000 are generally exempt from the protections of the Truth in Lending Act, and leases where the consumer’s total obligation exceeds $25,000 are also exempt from safeguards of the Consumer Leasing Act. The $50,000 limit for leases would apply to everything consumers are required to pay under the lease excluding taxes, the Fed said. The financial overhaul bill enacted July 21 included a provision to extend coverage to $50,000 effective July 21, 2011.

http://www.bloomberg.com/news/print/2010-12-13/fed-to-increase-consumer-lease-protection-limits-to-50-000.html