Credit Justice Services BLOG

Better think again.

I get asked many questions about credit and credit repair. It's what I do. Anytime the occasion arises where I'm able to help someone I'm glad to help out. One of the questions that keeps coming up nowadays is - 'Should I dispute my credit report online?'

The short answer is 'NO.' But the reason behind it might surprise you.

The credit bureaus have made it easy for consumers to dispute the accuracy of credit reports online. You can simply go to one of their websites such as www.experian.com and enter 'dispute' in the search window. It will take you to a page where you can request an online dispute. Simple!

But when you look down at the bottom of the page you will see three conditions that you must agree to in order to proceed. One of them is simply that you agree to the terms and conditions. Be wary of these!

The first item tells us that they are regulated by the Fair Credit Reporting Act. Another condition that you are 'agreeing' to states:

• Once an item has been verified by the credit grantor, you may not dispute the same item again without providing additional relevant information.

The line that says Experian is regulated by the Fair Credit Reporting Act (FCRA) is important. Also important - and the part that sends chills down my spine - is the part that I highlighted in red. This sentence might sound innocent enough, but if you look deeper, it's easy to identify the problem.

First, the FCRA says this is about your right to re-dispute information on your credit report (section 611):

‘...if the completeness or accuracy of any item of information contained in a consumer's file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly, or indirectly through a reseller, of such dispute, the agency shall, free of charge, conduct a reasonable reinvestigation to determine whether the disputed information is inaccurate and record the current status of the disputed information, or delete the item from the file in accordance with paragraph (5), before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer or reseller.’

Remember a couple of paragraphs back when Experian reminded us that they were regulated by the FCRA? It's interesting to note that an agency regulated by this act that is in place to protect consumers asks consumers to sign their rights away when they opt for the convenience of online disputing. Clearly they are trying to make an end run around the very law that regulates them. Shame on Experian.

When they tell us that 'You must agree to the three statements below to dispute information in your credit report' I must disagree. In fact, I would say that 'you must NOT' agree to those statements. Instead, type out your dispute, send it to the bureaus, as many times as you wish, and let them do their homework.

As you all may know I was an owner of a large collection agency and national subrogation company (insurance collections) Having 350,000 debtors in my data base I heard all the excuses and had seen all the collection tactics legally used by my corporation. I am ashamed to say; just like the credit repair business the collection business has some very unscrupulous companies collecting debt. Now that I’m on the other side of the table helping consumers know their rights about credit, I would also like to share with you your rights as a consumer against the unwarranted collection agency. I get hundreds of complaints in my office every day about harassing collection agencies and the illegal tactics used by the companies.
A great many people have collections on their credit report. Most of us have a time in our lives with a medical situation where the bills mounted up or just a web of circumstance that led to us having our accounts sent to collection. It’s not unusual. You may even have the will and volition to pay the debt, but not the means. Whatever the case, it is important to know your rights so that you are equipped with the knowledge to deal with these companies.

Let’s look at the Facts.

FACTS:

1. The consumer is protected under the Fair Debt Collections Practice Act (FDCPA). You may find your rights in detail on line at http://www.ftc.gov/os/statutes/fdcpajump.shtm
2. The original creditor is NOT governed under FDCPA only the collection agencies are held to this act.
3. There are 3 sections to the FDCPA that collection agencies seam to have the most complaints with.
a. FDCPA 806 - Harassment or Abuse
b. FDCPA 807 - Fails or Misleading representation
c. FDCPA 809 - Validation of Debt

Let me give you the "Cliff Note" version of each section. Make sure you challenge the collection agencies on the following:

FDCPA 806 – Harassment or Abuse

• Threatening or the threat and use of violence or the reputation of an individual
• Use of profane language
• Letting the telephone ring, or engage any one in a telephone conversation repeatedly with the intent to annoy, abuse, or harass

FDCPA 807 - Fails or Misleading representation

• Telling you they work for the State or Federal Government Agency
• Telling you they are an attorney or represent an attorney when they do not
• Implying that non payment will result in an arrest, garnishment, lien, ECT. When the collector has no intent or legal ground to do so.
• Telling the consumer they committed a crime in order to disgrace you

FDCPA 809 - Validation of Debt

• Written notice of debt must be sent to you within 5 days of initial contact by phone
• You have 30 days; from the time you receive the collection letter (Dunning Letter), to dispute validity of the debt and ask for proof.
• Upon disputing the debt the collection agency MUST cease all collection activities until verification is mailed to consumer.

Keeping records of all phone conversations is imperative to winning your case. Keep all letters and correspondence received by the collection agency in a file, this will help you if you need to go to court. If the collection agency continues to try and collect the alleged debt without providing you validation you are then able to take them to small claims court in your local area and file suite for $1,000. Remember, the collection agencies count on the consumer’s ignorance of their rights. Although I, at one time, ran a collection agency, it is now my steadfast commitment to shed light on the dubious practices of the unscrupulous companies that take advantage of you, the consumer.

Educating the consumer,

Douglas Muir, CEO
Credit Justice Services, LLC

I love the 'greatest generation.' They emerged from events like the Great Depression and World War II wondering what else they could do to be of help. They embraced responsibility in times that would bring most people today to their knees.

So when one of the group, my father, responded to my first blog with 'I can't believe those scoundrels at the credit card company raised my interest rate to an exorbitant level because I had the bill buried under a stack of papers on my desk and I was late with one payment. Heck, I even paid triple the minimum payment the month before!' I was floored.

When words like 'scoundrel,' the curse words of a gentler generation, escape my father's mouth I know that he's really, really mad.

If you missed that particular blog, it outlines the fact that credit card companies can raise your rates to extremely high levels if you are late with one payment or run your balance up too high. Given the amount of money the banks have lost in the past couple of years through defaults in the mortgage industry, this isn't too hard to believe. What most people don't know is that the other credit card companies that you have accounts with check your credit from time to time and can raise your rate as well once they see that your credit score has dropped due to the late payment or maxed out card. The higher rate is kicked in, not by a human, but by a computer that automatically assigns the new rate. Make no mistake, the credit card companies could care less about you or your finances. They are businesses that want to maximize the amount of money they can make off of you.

So what can be done about a situation where your credit card companies sock you with a higher rate? Well, you can try a couple of things before you go and cancel the card. First, you can ask them to lower it. There are cases where they will forgive, but they are fewer and farther between nowadays - OR - You can threaten to pay off the balance and cancel the account. The second option gets their attention much more effectively. Credit card companies spend $200 to gain you as a customer. This is pretty much true with all of them. Their advertising cost is so high that they calculate exactly how much they have to spend to attract you as a customer. They lure you in with cute pirate commercials and then you find out, years later sometimes, that they have been systematically ruining your credit each time you run a balance too high or make a payment a day late. Threatening to cancel the account can sometimes lead them to either remove the late payment or, at least, reduce the interest rate to a lower level than the new one.

If that doesn't work, what I would do is take advantage of my still good credit score and transfer the balance of that card to a new one with a low interest rate. I would leave the account open on the card that I transferred the money from and keep a zero balance except for very small purchases and pay the amount off, in full, before interest accrued each month. This would leave my credit unscathed. This is the advice I gave my father and now to you. Heaven knows the last thing we need is our credit card sticking it to us with gas and grocery prices going through the roof.