Suing the credit bureaus

I am a litigious, angry consumer. I'll sue a creditor, collector, or credit bureau at the drop of a hat. Why? Well, it is the only thing they understand, since these are for profit businesses. Threaten their profits, and they sit up with rapt attention. Yell, scream, cry, kick, moan, groan, etc... and they don't care. The credit bureaus in particular ARE NOT YOUR FRIEND. They don't make any money off of you directly, YOU ARE NOT THEIR CUSTOMERS. The credit bureaus make money from selling reports and information to creditors and collectors. Only as of late have the bureaus embraced this concept of selling reports and credit monitoring products to consumers while throwing out the spectre of "identity theft". Before that, believe it or not, the big 3 ran collection agencies and were really in a consumer hostile mode.

One universal concept is that credit bureaus DO NOT FOLLOW THE LAW. They push the envelope as far as they can go, get a 1M fine or so every year from the FTC, chalk it up as a business expense, and figure out what to do with the other 199M they earned that year. If you can game the system and delete accurate info (and you absolutely can) you'll hear wails and moans about how it is fraud, and how future creditors could get burned, etc... Credit reports are defacto inaccurate by and large. I've seen numbers suggesting upwards of 70-80% contain inaccuracies. Why? Because contrary to popular belief the credit bureaus don't actually CHECK the information they are given, they just report whatever the creditor/collector puts in the E-oscar terminal. Anyone can report anything at any time, and you are generally powerless to do anything about it. The CRA's can rely on the representations of the data furnishers. The way the law is written, it is on YOU to do something about any inaccuracies.

As far as doing investigations, as Johnson V MBNA showed, the credit bureaus and data furnishers just parrot information back and forth. "You got a Johnson owing a debt? Yup, sure do. Ok, thanks, VERIFIED" That is about it. The data furnishers don't get information on your dispute, it is reduced to a 2 digit code (01 = not mine, 02 = never late, etc...) and sent off. Don't ever think for a minute that a "not mine" can't get confused and put in as a "never late" or something stupid like that. The data furnisher checks their records or is supposed to and then they update accordingly. For example, on a "not mine" dispute all that is checked is your name, SSN, DOB, and address. Match 2 out of 4 and it is verified. The deck is stacked against you.

If YOU are on the recieving end of a raw deal, though (ID theft, mistaken identity, just plain wrong info being reported), you'll often find that you have no recourse. Go ahead, complain to the worthless BBB. They are a private, for profit entity as well with no regulatory power to fine or do anything. Write your congressman: they simply don't care. Write the FTC: they won't get involved unless there is a "volume of complaints" which means as your civic duty, you SHOULD do this, but don't expect any personal attention, unless you have an egrigeous case. Write your state AG. They are like the FTC, and should be involved, but don't expect much help.

Now, what is a consumer to do? Just sit back and take it and hope superman comes to your aid? I don't think so.

There is one last recourse that for whatever reason consumers as a whole just don't do. SUE THEM!!! This is actually my first recourse. I approach EVERY call, letter, or whatever as me simply gathering evidence in preparation for a lawsuit. I record all calls ( I live in a 1 party state, as most states are, and even if I didn't, the big 3 give 2 party notification with the start of each call. Record everything no matter where you live when dealing with them, and don't tell anyone you are recording). I send my letters certified with return reciept, so I can have proof when they come with the "we never got it" excuse. They get one shot. If you screw up, I am going to be best of friends with your corporate counsel. I am on a mission to sue them, unless they make me happy. The CRA's are NOT your friends, they are NOT on your side, they do NOT have your interests at heart.

Suing is depicted as something to be done only in "extreme" cases, like nuclear war. Truth be told, consumers get sued every day by the hundreds by collectors, and businesses sue other businesses all the time as well. Suing has been depicted as "evil", mean spirited, or an opportunistic person looking for a jackpot judgment. In truth, you CAN absolutely get a monster judgment, depending on if you have actual damages, and rightly so. If you have some stupid collector or business reporting inaccurate info, or the CRA's fail to follow the established procedures and it costs you a house, that collector or CRA owes you a house, pure and simple. For smaller transgressions, 1k per violation is the legal max for statutory damages. If you can show actual damages, such as getting declined, then the damage o meter goes up from there. The point isn't to get paid, though, but to clear up your report. All I can say is nothing gets someone's attention like a summons.

One silly notion is that suing is hard. Suing isn't hard. Lawyers do it all the time, so it can't be THAT difficult. Head to the Western district of Texas Federal court website, and download the pro-se guide if you don't have one. The hardest lawsuit is your first one. The pro se guide has examples, definitions, etc... It is so easy. Describe yourself, describe your problem, how you were harmed, what laws were violated, describe what damages you have, if no actual damages go for statutory. Sign it, get a clerk to stamp it, send it off certified, and wait for your call the next day.

You will probably have to go pro-se, because it is harder to find a GOOD consumer lawyer to take your case on contingency than it is to find an honest politician. Lawyers want money. Consumer cases, generally don't have a lot of money, unless you have the magic case (good 700+ credit, collector or someone plasters your report, you dispute to no avail PROPERLY, and it costs you a house or something, and that gives you an ulcer, AND your wife divorces you) outside of that, you are probably better off going at it alone. People attach all sorts of mythical abilities to lawyers, but honestly, most have no clue about consmer statutes and a brief read through of the law and significant cases will make you more knowledgeable than 99% of the lawyers in the world, no joke. I've gone head to head with the best law firm in town, TWICE, and these guys are absolutely clueless. They don't know the first thing about consumer laws, and much of it was spent with them telling me why I should accept a pittance, with me telling them they better come hard with a settlement that makes me think about not continuing or not at all.

Next fallacy: suing is expensive. It isn't expensive. It costs more to have bad credit than it does to sue a few times. Federal court is now $350. Get an "Informa paupis" form to hopefully file for free. I've done it every time I have sued, and it was denied every time. I knew I had no chance to get it approved, but I did it anyway. Why? To get the suit filed. Once it is filed and served, the defendant will have 20 or 30 days (I can't remember which) to answer it. In that time, they'll do their best to convince you how you have no case, how lucky you are that they are letting you dismiss it with prejudice, and how they are going to sock you for atty's fees. If they come to their senses and make me a reasonable offer, which includes fixing my report and some cash, then I may be able to make out without paying the fee. Worst case, I add a few weeks to a generally long process, and I pay the fee in the end, no big deal.

I think the "we will sock you with atty's fees" is like the standard line lawyers have to memorize before taking the Bar or something. With just about every consumer statute, the ONLY time you can be hit with atty's fees is if you are suing in bad faith or for harassment. Prove one violation or one pseudo violation or heck, even if you are mistaken with your interpretation of the law, you have NOTHING to worry about. Furthermore, if you can prove ONE violation, all court costs, legal fees, and expenses are billable to the defendant. Suing in actuality is free.The lawyer just wants to get it dismissed, so they don't have to do any real work. Real work is expensive, and it costs their clients money. YOUR GOAL IS TO COST THEIR CLIENT MONEY.

The next step is discovery. Discovery is were you kinda ask them relevant questions about the case and they ask back. BURY THEM IN PAPERWORK. Ask for any and everything, the agents names and addresses that fielded your calls, who worked on your case, what FCRA training they went through, EVERYTHING. Start working on your motion to compel while you are waiting for them to send their blanket objections. Make it expensive to deal with you. Don't give them anything as far as free discovery or tell them about your case. After the first call, unless they are bringing a sizeable settlement, tell them not to call and to send everything via certified mail. The more money you cost them, the more likely they are to capitulate.

The big 3 talk tough and put up an initial fight, but generally capitulate easily. Why? They don't want bad caselaw out there, they don't want regulatory attention (the FTC DOES track Federal lawsuits), and they don't want to risk any Johnson V MBNA expenses (80k Judgment, plus atty's fees for both sides)

Oh, yeah make sure to sue in Fedreal. Small claims court is a joke. The judges are idiots, the clerks are idiots, they probably have never heard of the Fair credit reporting act, the CRA's will probably just remand the case to Federal anyway, and small claims courts generally lack the power to grant injunctive relief.

Common ways CRA's violate the law include:

not allowing people to dispute inquiries. This is a clear cut violation. When you get your standard "inquiries are a matter of record..." letter, respond with "so are lawsuits, here's a summons..." It is a stone cold, hands down, clear cut, violation. The FCRA says you can dispute ANY INFORMATION in your credit file. If a hard inq should really be a soft inq or it wasn't authorized, you can dispute it. Think of it this way, if you can dispute silly stuff like phone numbers or addresses that generally have ZERO impact on your FICO and marginally at best as far as getting approved, you should be able to dispute inq's. Bottom line: it is the law and your right to dispute ANYTHING in your file. If anyone gives you any static, sue them.

Not sending REAL responses to procedures requests. At anytime you can request the procedures used in your dispute. To ME that sounds like a detailed account of when the dispute was sent, what was transmitted, who responsed and how, when they responded, etc...The CRA's say it is a standard form letter saying they investigate your disptue and publish the results. Well, here is my standard form letter: Plaintiff: Codename_47, Defendent: Dumb credit bureau...

Not doing thing in the required time frames. This is an easy one. CRA's are supposed to transmit info within 5 business days to the data furnishers. The often don't. My response: "stop right there, delete it now" If they balk, sue them.

I had a certain regional CRA try this one with me: "We need a copy of your drivers license and SSN card to send you your dispute results" Please. For a CONSUMER DISCLOSURE, yes they can require proper ID. Dispute results are not consumer disclosures. Consumer disclosures are not dispute results. A consumer disclosure is when you are denied credit or purchase a free report. Dispute results are dispute resutlts, period.

Reinsertion. This is where you dispute something, the creditor re-certifies that it is indeed accurate, and it comes back. The CRA's are supposed to send you a letter stating that it has been reinserted. Do you think they ever do? Of course not, so why don't you send them a little letter instead.

Not reporting credit limits!!!! This one pisses me off. The FCRA says the CRA's must strive for the "maximum possible accuracy", but they WILLFULLY do not report credit limits. I am going to sue a credit bureau over this here shortly. I disputed the credit limit of one card, which is 26k, not too shabby of a limit, I think, much better than 17k that they were reporting. They changed it for a month, then it changed back. I have them for reporting inaccurate info, reinsertion with no letter, and not striving for maximum possible accuracy. Sure, it says high balance or credit limit, but lets assume for a minute that NOBODY reported credit limits. It is a huge part of your score, second only to payment history, and if it is so important, why do people get the option to report it or not. They don't, in my book.

My personal favorite is ID theft. I wish someone would. I have NO fear of someone stealing my identity. I would dispute ONE TIME, send in the appropriate paperwork, and in 31 days, if that stuff isn't off my report, EVERYONE is getting a summons.

Suing works. It costs people money, which they hate. It gets people's attention. I would never, ever spend hours upon hours on the phone trying to get someone from india to investigate my dispute. I'd bang out a 1 page letter in word, send it certified ONE time, follow up with a letter demanding deletion after day 31, and the third thing would be a summons. The only reason I would ever be on the phone is to get the name of the corporate counsel or to get a physical address if I can't quickly find one to send my paperwork. Put your number at the bottom, and they WILL call YOU within 24 hours. The credit bureaus get sued all the time. They have a special department at each that handles angry consumers that sue called "special handeling" or whatever the term de jour is. I think the best thing you can have to preserve your score is a solid understanding of the law, and the willingness to defend your rights.

You know what, I really appreciate great folks like you, taking the time and posting such valuable information in these forums.

Other folks might share such rich information only in their blogs and make money from Ads.

Green to you OP.

I just came across a site with great info the other day. It really explains what your rights are. there are great pieces of information you can find many places but this is something I hadnt seen yet:

Myth: It is illegal to have truthful information removed from your credit report.

Fact: Congress has already set the precedent by making special provisions for the removal of correct information from individuals' credit files by fulfilling certain criteria. Congress realizes that dangling that carrot in front of college students encourages repayment of defaulted student loans. It should come as no surprise that creditors in other financial markets are hip to this. Let's face it; congress had to get the idea from somewhere. Right?

If you need more proof, read section 609(c)(2)(E) of the NEW Fair Credit Reporting Act that President Clinton signed in September of '96.

"...a consumer reporting agency is not required to remove accurate derogatory information from a consumer's file, unless the information is outdated under section 605 or cannot be verified."

Notice the wording above, "is not required to remove." It is very interesting that the law does not say that accurate information "can not" be removed, but only that the credit bureau is not required to. Now, there is law that says a creditor can not knowingly add wrong information to someone's file, but the subject of removing accurate information is mysteriously avoided. The truth is the FTC and the bureaus themselves spend a lot of money trying to convince consumers otherwise. Why? Lobbyists and money of course! It makes more work for the credit bureaus, thus increasing their labor costs. Bureaus save millions of dollars a year by convincing consumers that the consumer is virtually powerless. But congress worded things to leave the door open, and in at least one case drafted law allowing for it, specifically.

Fortunately, creditors make their profits by collecting from their customers, not reporting negative credit information. Many creditors, though, have an agreement with the credit bureaus that they will not allow a negative listing to be deleted upon settlement. Larger creditors, such as huge credit card companies or banks will require more pressure before they will agree to delete a negative listing, but virtually every creditor will give in with the right amount of convincing. Every creditor who reports to the credit bureaus can also change the information they report. In most credit organizations, there are several managers with the authority to make changes on the credit report.

Bottom Line: Anything a creditor is responsible for reporting and confirming, a creditor can change.


I am going to post a link to the site. It explains steps and your rights very clearly.

I'm gonna link to the page the gets straight to the point of how to build/rebuild credit.
ClickText

I have a question about suing:

When I was 18 and in college I opened a Wellsfargo scredit card $700 limit. About 10 months later I wenton spring break and maxed it out. I was afraid to tell my parents so I waited, not paying anything for 2 months, after which I told my parents.(I know dumb) At that point they paid the balance and I requested the account be closed. A few months later when I went to switch banks I learned because of my credit the only checking account I could open would be one in which my parents co-signed. So that is the way it has been. For five yrs that is all I could get in my name, no leases, no credit cards, etc. So a couple months ago I finally was able to open a checking account in my name, but now 25 I have NO credit. I can not even get approved because of that for a gas card, and my apartment lease still needs a cosigner. Looking over my credit report Transunion reported the creditcard/same account# closed twice. One date reported in 2000 "account closed by consumer", then reported in 2003 "canceled by grantor". This is an obvious error I am working to change, can I sue anyone?

Experian amd Equifax have the account "closed(paid)" date reported 2003. Experian has "credit line closed-grantor request-reported by subscriber" and Equifax has "Paid account/zero balance accounts closed by grantor". Isnt this all weird since the account was closed by me 2000.

****I wanted to add that I could have been passover for jobs since many companies now check credit upon hiring.

SUCKISSTAPLES said:eyeluvtrget said:I have a question about suing:

When I was 18 and in college I opened a Wellsfargo scredit card $700 limit. About 10 months later I wenton spring break and maxed it out. I was afraid to tell my parents so I waited, not paying anything for 2 months, after which I told my parents.(I know dumb) At that point they paid the balance and I requested the account be closed. A few months later when I went to switch banks I learned because of my credit the only checking account I could open would be one in which my parents co-signed. So that is the way it has been. For five yrs that is all I could get in my name, no leases, no credit cards, etc. So a couple months ago I finally was able to open a checking account in my name, but now 25 I have NO credit. I can not even get approved because of that for a gas card, and my apartment lease still needs a cosigner. Looking over my credit report Transunion reported the creditcard/same account# closed twice. One date reported in 2000 "account closed by consumer", then reported in 2003 "canceled by grantor". This is an obvious error I am working to change, can I sue anyone?.for being bad on spring break?

for losses incurred do to error.

eyeluvtrget said:
for losses incurred do to error.you did not detail any efforts to correct the error. You need to give them an opportunity to correct the error, but its your responsibility to bring it to their attention - they are not omnipotent.

Rajjeq said:So two lessons from this story:

1. Don't store your credit card anywhere, as it can lead to problems including identity theft and charges you don't know about.
2. Obviously if you are right, but even if a situation is questionable, or even if you are completely wrong, it's easy to send in disputes, and sometimes works.
And learn to check your credit card statements online, don't just count on the paper statements...

I think I've decided to just accept it because my scores took a pretty large jump from not having the chargeoff on anymore.

Great info.

One thing I would like to add that by initiating a temporary credit alert for 90 days (I do it every three months in order to better protect my identity), you are entitled to a free credit report from each of the three CRC.

I wonder if you can add this info to the main message.

Mik.

codename...

Suing is lame unless you actually were hurt. Not getting a credit card due to bad info is not grounds to sue as far as I'm concerned. Especially when you can check your credit report for free yearly. People need to take personal responsability and fix their own credit reports. If you're trying to get a house you should have fixed your credit report before even getting an agent. Now if they refuse to fix your credit report then I can see that being grounds for litigation but I'd try a letter to the top dog long before heading to the court house.

Suing is a waste of time and money most of the time. Hopefully someone doesn't sue you one day, bury you in paperwork, and cost you tons of money. Then you'll sing a different tune. As a business owner it seems like everyone wants to sue. It's just lame. What you don't realize is that if they want to they can screw you over for several years (in some states) by just drowning you in paperwork, demanding depositions, filing change of venues to maybe the state where their corporate office is, etc. The pendulum swings both ways. You might win in the end but it can take years and years and years and you might go broke and just have to give up. I've seen it happen. They can smother you. I would only sue if you know what you're doing and can prove your case quickly. Then of course you have to hope you get a good judge since I've seen some judges just get lazy and delay a case out for years due to the volume of paperwork that generally accompanies these stupid tit for tat lawsuits. Once you start the paperwork war it's basically a mess and a judge won't want to spend 6 weeks of her time reading 600 pages of crap. Then when the company requests delay after delay they'll get granted. There are ways, motions, to stop large companies from outspending you by getting a case through a trial quickly but they're not necessarely going to work.

With that said, I agree completely that for most litigation you don't need a lawyer for these small legal matters. Lawyers are generally just overpaid bookworms and I've fired every personal lawyer I've had. I don't think I'd want to do any courtroom law on my own though. I wouldn't want to risk a win just because I couldn't talk the lawyerbabble. If it's just paperwork though (immigration and divorce within 5 years for example) don't bother with a lawyer. Most lawyers are pretty stupid unless you're getting one that costs several hundred dollars an hour which I've had to use for lawsuits pertaining to my business.