Wrongful Credit Damage, Identity Theft and Debt Collection Abuse Blog » Credit Damage

GREAT NEWS! California Department of Motor Vehicles Will Take Your Identity Theft Report!

baddogbob — Mon, 20 Jun 2011 17:51:26 +0000

Hello Readers,

I hope your summer 2011 is off to a good start.

We’ve received many, many complaints from identity theft victims that they have had problems with local police agencies taking their identity theft police reports. Some police agencies have refused to take a police report from identity theft victims. As you probably know from other blog entries, many of your civil law remedies rely on you initially obtaining a copy of an identity theft police report and providing it to the credit bureaus and to the creditors who are pursuing you for identity theft debts.

At a recent dinner I attended, I sat at the same table as two deputies from the California Department of Motor Vehicles. I discussed this problem with them, and each indicated to me that the DMV is more than happy to take an identity theft report and provide a copy to the consumer for his or her later use. In fact, DMV has jurisdiction over many identity theft cases because DMV regulates driver’s licenses, which are still the favored form of identification for many financial transactions.

So, if you find yourself the victim of identity theft and you need to file a police report, go to the DMV. A DMV identity theft report has all the force of a report issued by a police department or a sheriff, and DMV can cross-connect your report to your driver’s license.

Here’s the contact information you need:

Phone: 1-866-658-5758
Email: DLFraud@DMVCA.gov

Hope this helps!

So You Have Decided to Pay Off that Debt–How Do You Know that the Debt Collector Really Owns It?

baddogbob — Mon, 21 Mar 2011 18:03:20 +0000

Dear Readers,

Thanks for tuning in. With debts being transferred around today like so many baseball cards, it happens that some consumers pay a debt, only to learn later that the debt collector that they paid does not owe the debt. We handle these types of cases.

Gerri Detweiler, a consumer credit consulting expert, has referred a question on this from Jay in Indiana. I answer Jay’s question about how to handle this situation, where you are not sure that the debt collector trying to collect from you really owns the debt. Here’s the question and answer:

“I am trying to do the right thing and pay off a judgment but cannot locate who to pay. The judgment is from Sears and the debt has been purchased by Sherman Financial Group initially who was the plaintiff for Sears, then it was bought by Eltman Eltman and Cooper then by LVNV Funding or Resurgent Capital Services, then by Capital Recovery or Recovery Management Systems Corp.

“Recovery Management Systems is saying that a third party is involved (Sherman Financial Group)and that they are having a hard time finding out the information from Sherman Financial Group (Even though they are related).

“I would like a settlement offer if at all possible so I can get my life back together.

“Any Advice?

“Jay in Indiana

“Dear Jay in Indiana,

“Gerri Detweiler has asked me to assist with this question.
“When you cannot determine who owns a debt you would like to pay off, there are two things you need to do:
“1. For the party (usually a debt collector) who apparently owns the debt currently, request of them all documentation showing that they indeed own the debt. Minimally, there should be an agreement showing that they have bulk-purchased a bunch of debts, of which yours is one. It may not conclusively prove that the current debt collector owns the debt—it probably will not—but it is a document which you can keep in your files to protect yourself against future claims for the same debt. These types of future claims, “second bites at the apple,” occur frequently, so put the document into a safe place.
“2. This is the most important one: make the current debt collector indemnify you against any future claims on the same debt if you pay it. “Indemnify” means, essentially, insure. You are making the debt collector, in writing, promise to pay for your defense and for any damages assessed against you if you are sued on the same debt in the future. Put this in writing: “[Current Debt collector] warrants and guarantees that it currently owns the debt of $***, originally incurred through a credit charge with Sears. [Jay in Indiana] has agreed to pay this debt, in full, with a payment of $*** made payable to [current debt collector]. If [Jay in Indiana] is, at any future time, sued for the same debt, [current debt collector] will fully defend and indemnify [Jay in Indiana] for all costs, attorney’s fees or expenses or damages which [Jay in Indiana] may incur as a result of such future suit.” If the current debt collector will not agree to include this language in the release, which the current debt collector signs, then don’t pay them. Simple.
“I hope this helps.

Robert F. Brennan, Esq.
BRENNAN, WIENER & ASSOC.
La Crescenta, Ca.

What We All Need to Learn from the Mortgage Document Crisis

baddogbob — Wed, 27 Oct 2010 04:07:49 +0000

IMPORTANT Information on Credit Scoring–the Bureaus Compile the Scores and, in most cases, THEY ARE BASED ON INCOMPLETE OR INACCURATE INFORMATION!

baddogbob — Mon, 26 Jul 2010 16:09:53 +0000

Hello Readers,

Welcome to the “Dog Days,” so named because the “Dog Star” is high in the nighttime sky and very visible. My grandmother used to tell me that “Dog Days” were so named because dogs went blind with the heat of the late summer, but, upon further inquiry, I regret to report that my dear grandmother was misinformed.

On the subject of “misinformed,” you need to know that credit scoring is actually performed by the bureaus, using “algorithms” supplied by Fair Isaac. For those of us who did not major in mathematics, traditionally an “algorithm” referred to a set process or function through which you could put a number to obtain a result. A very simple algorithm might be “3x,” and then you would supply the specific number. So, if you supplied the number “4″, then the algorithm would give a product of 12.

Obviously, when calculating something by a highly complex computer system, the algorithms become more and more complex.

The essential point that you need to understand, however, is that the “algorithms” are the functions or processes through which your personal credit information is put to create a credit score. However, it is not nearly as scientific as most people believe. Below is a short article reprinted from the New York Times which identify, correctly, the credit bureaus as the ones who create the score, using algorithms licensed from Fair Isaac Co. This really is a classic example of “garbage in, garbage out,” because if the bureaus do not include positive accounts (which happens all the time) or if they include false or inaccurate negative accounts, your credit score takes a big hit.

Enjoy the article and enjoy the “Dog Days”. Here it is.

It is not FICO that comes up with a borrower’s score — it just sells the algorithms. The companies that do are the big three credit bureaus, TransUnion, Equifax and Experian. They gather input about the prospective borrower’s lending history from various lenders like credit card companies and auto dealers, plug them into a formula and derive a credit score.
You would think, given the critical importance of an accurate score, that there would be rules about the information that is submitted to them. There aren’t. Lenders can submit information about your credit history to one of the bureaus, all of them or none of them. Some of them turn over information right away; some take months; some don’t do it at all. Some are sticklers for accuracy; others are sloppy. The point is that the credit score is derived after an information-gathering process that is anything but rigorous.
And finally, they don’t take into account the many, many mistakes that are found in credit reports. My own credit reports, which I looked up for this column, are a case in point. Although my score was O.K. — the low 700s — the reports themselves were full of unpleasant surprises. They listed credit card accounts I didn’t have, and failed to list at least one big one that I did have. Two of them noted that five years ago, I was late on a car payment. (I was?) My daughter’s old Brooklyn address was listed as my former address. According to Experian, I was still writing for Fortune magazine. It said I no longer lived in a house that I just bought two months ago. TransUnion, meanwhile, listed The New York Times as my former employer. Currently, TransUnion said, I am an employee of Rite Aid.
Rite Aid? I know, I know — it is supposed to be up to me to catch their mistakes (which is also why they don’t have to care about the mistakes.) But what I find incredible is that we have imbued credit scores with these magical predictive powers — and yet the companies coming up with the scores can’t even get the borrower’s address and employer right. It would be funny if it didn’t matter so much.

The Role of The Debt Validation Letter

baddogbob — Wed, 21 Jul 2010 18:05:45 +0000

California’s Debt Collection Abuse Statute Protects Consumers

baddogbob — Wed, 30 Jun 2010 18:44:56 +0000

BEWARE of debt collectors who promise to clean up your credit

baddogbob — Mon, 14 Jun 2010 19:32:59 +0000

Account Number Morphing – Still Another Barrier to Accurate Credit Reporting

baddogbob — Thu, 03 Jun 2010 18:04:54 +0000

Account Number Morphing – Still Another Barrier to Accurate Credit Reporting
By Robert F. Brennan

The Federal Credit Reporting Act [“FCRA”] makes it mandatory for Credit Reporting Agencies such as Experian, Equifax and Trans Union “to follow reasonable procedures to assure maximum possible accuracy of the information in the [consumer’s credit] report….” A willful and negligent failure to do so is violation number 1 of the FCRA. One wonders then when in fact it turns out that certain Credit Reporting Agency [“CRA”] procedures, or lack thereof, assure maximum possible inaccuracy of information in the consumer’s credit report. Are we to take it that the words of a federal law mean exactly the opposite of what they say? Legally, philosophically, morally, one would think not.

A “trade line” on your credit report provides certain standard items of information about an account you have, such as the name of the company (say a department store, for example), the company’s address, the account number, the current balance on the account, the terms of the credit, and so forth. Any of this information could in fact turn out to be incorrect, but the item on information we will address in this article is that definite and critical identifier for the CRAs, the account number.

One would think that such a mundane piece of information as an account number couldn’t possible cause that much trouble, and in a sense that is true. What actually causes the problem is when the account number for the same account gets changed, and sometimes morphed repeatedly, so that the identity of the actual account is greatly obscured. When this is allowed to happen, the CRAs’ super computers, employing simple logic but lacking intelligence, assume that an account is the same, or a match, when it has the same account number, and that it is different when it does not. Therein can lie the source of much headache, aggravation and damages for a consumer, and much denial of responsibility from the CRAs.

An example would be helpful here to illustrate. Let us say the Consumer A is receiving bills for a $600.00 balance on a department store credit card. Consumer A never applied for such a card and therefore the debt cannot be his. He suspects someone stole his identity and opened the account using his social security number and other private information. After numerous phone calls and letters back and forth, the department store agrees that it is not Consumer A’s debt after all and tells Consumer A not to worry about it, that they’ll “take care of it”. Naturally, Consumer A is now relieved and assumes it will ve “taken care of”, i.e., they will stop billing him for the invalid debt and it will be deleted from his credit report. The account number, by the way – let us say it is 1234567890 and that is the way the CRAs are reporting it on Consumer A’s credit reports. Consumer A notifies the CRAs by certified mail of the situation, along with documentation, and they all delete the previously reported trade line within a month.

About four months ago by and Consumer A is dismayed to receive in the mail a letter from a Debt Collection Company named “Pit Bull”. Pit Bull, in its letter, states that it is collecting a debt on behalf of the department store (the same on that earlier told Consumer A not to worry about it, that they would take care of it and delete it from his credit report.) Pit Bull shows the debt now as $850.00, having tacked on a $50.00 penalty and a $200.00 “default charge” or attorney’s fees), but informs Consumer A that, although he owes immediately the full amount of $850.00, they will take $450.00 as a full payment. They can’t guarantee Consumer A that the department store will reinstate him in good graces vis-à-vis his credit card (the one that was never his in the first pace) but if he pays them the $450.00 at least they will stop dunning him. The account number of the letter is now 123DEPTSTRE890. A few months later Pit Bull furnishes the account 1234567890 as 123DEPTSTRE890 to the CRAs, showing the account as a “charge off”, amount $850.00, and a note that the trade line will be reported for the next seven years!

Consumer A is now distraught. He calls the department store and reiterates his story that the department store had earlier investigated, agreed with him that he did not owe the debt and that “they would take care of it” for him. These words come back to haunt Consumer A as the representative now tells him that they are sorry, the account is now with collections, and that they cannot interfere as it is now out of their hands. Consumer A also tried to clarify the satiation with Put Bull but, other than being cursed at and told to “pay the damn bill”, he gets nowhere. He disputes with the CRAs with certified letters, giving a full account of the situation and a statement that he categorically does not, and never did, owe the debt. Two of the three CRAs shortly thereafter delete the trade line from Consumer A’s report, but one of them does not. That one informs our consumer that they checked with the furnisher (Pit Bull) and the furnisher “verified” with them that the information they provided on the debt was valid.

Some more months pass and Consumer A starts feeling frantic. He tries to get refinancing on his home but is told he’ll have to clear up the derogatory trade line showing on one of his credit reports as a first step. He is also denied credit on a couple occasions which he suspects resulted from the same derogatory reporting.

Consumer A starts religiously checking his credit report, and discovers that now the account is being furnished by another collection company, Viper Inc., and the account number has changed again, this time to “732******”. Our consumer becomes by this point very discouraged. He tried communication with Viper In., but they are just as nasty and, if anything, more venomous than Pit Bull.

At this point Consumer A finds an attorney firm that will take his case and initiate a lawsuit on his behalf. Among other things, the Complaint accuses the remaining CRA of a “reinsertion violation”. What the CRA had done in this example was “willfully and negligently violated the reinsertion requirements of 15 U.S.C. Section 1681i(a)(5)(B) in reinserting derogatory information into plaintiff’s credit report after he had previously disputed it, without certification or notice.” (Even though the account number kept changing, it was still the same account being referred to all along. The CRA in question deleted, the reinserted the same account without notifying Consumer A, a no-no.)

After the account is deleted and then reinserted, the CRA fails to notify Consumer A within 5 business days that they are re-inserting the account information. The ironic twist to all this is that the CRA then argues that the “reinsertion” of the account was not their fault because it had a different account number, and how are they supposed to know that it was the same account?

How, indeed! It was the CRA’s own regulations, or lack thereof, that allowed the reinsertion to occur. The CRA argues that if they had known it was the same account then they wouldn’t have reinserted it, and yet the CRA is the one who allowed Pit Bull, and Viper Inc., and whichever entities came afterwards, to keep changing the account number on the same account; in short, in effectively disguising it from the CRA’s computer which only matches identities, not similarities or differences.

It is bad enough that the CRAs frequently take the word of disreputable or highly questionable collection entities over that of disputing consumers; but it is unconscionable that the CRAs allow collection entities to in effect cloak the identity of accounts even from themselves, the CRAs, and then blame it on the same system that they helped create! This bungling would be laughable if it didn’t happen to cause consumers so much financial hardship, as well as frustration and emotional pain.

Robert F. Brennan

The California Identity Theft Law

baddogbob — Wed, 26 May 2010 19:03:09 +0000

IMPORTANT! How to Dispute With The Credit Bureaus

baddogbob — Tue, 20 Apr 2010 01:17:42 +0000