Credit Bureaus Reach Historic Settlement With Attorney General

906

Part-2 of Occasional Series On Credit Bureau Laws And How Credit Regulations Affect Or Benefit Consumers

Over 200 Million Americans Benefit

Americans will now have a better and more effective recourse to correct false reporting errors on their credit reports. This follows the historic settlement between the New York State Attorney General’s Office and the big three U.S. credit reporting agencies. Those agencies collect and disseminate credit information on more than 200 million Americans.

The settlement announced recently require credit bureaus like Equifax, Transunion, and Experian, to change the way they handle errors, complaints, false debts reported by lenders and data furnishers. It includes how they report unpaid medical bills. This is part of the largest overhaul since the 2003 Fair Credit Reporting Act. The settlement will no doubt impact the way the credit reporting industry does business with the public.

What forced the settlement to take effect was the continuation of heavy pressure by New York Attorney General Eric Schneiderman, and reforms pushed through Congress by the U.S. Consumer Financial Protection Bureau.

“We certainly hope this does a lot for consumers,” said Chi Chi Wu, staff attorney at the National Consumer Law Center. “It doesn’t take care of every single problem with credit reporting, but it’s a huge step,” Wu said in a news article.

“The settlement represents the most comprehensive, voluntary changes to how the credit bureaus do business that I’ve ever seen,” said John Ulzheimer, president of Consumer Education at Creditsesame.com, in a interview with NewsBlaze.

“Problems with credit reports routinely block people’s access to housing and jobs, particularly low income people and people of color,” said Susan Shin, senior staff attorney at the New Economy Project, in a article published by Nasdaq.com.

Attorney Susan Shin added in the Nasdaq article, “The unfair practices of the big three credit reporting agencies have an outsized impact on the lives of hundreds of millions of people.”

credit squeeze

Under the final agreement reached earlier this year in March with New York State, Equifax EFX LLC, Experian Information Solutions Inc, and Transunion LLC; these three credit bureaus agreed to be more proactive in resolving disputes over information published on credit reports. It is a process that has continually stacked the deck against consumers in unfavorable ways that left unresolved errors on credit reports, according to federal watchdogs and consumer advocates.

Changes will apply nationally and gradually will phase in fully within the next six to 39 months.

The deal, “is a good sign that the reporting agencies are finally willing to step up their game and respond to the needs of hardworking consumers and their families,” said New York State Attorney General Eric Schneiderman,” in a statement published by Wall Street Journal.

Stuart Pratt, president and chief executive officer of Consumer Data Industry, a Washington-based trade group that represents credit bureaus, said also in a Wall Street Journal article, “This dialogue with a state attorney general (gave) us the chance to have a dialogue with each other and work on details on how we can proactively pursue changes to our practices.”

The deal underscores recent findings by the Federal Trade Commission(FTC), that showed in a study that “one in four Americans has at least one error or errors on their credit report.”

A lawsuit highlighted the corrupt practices by credit bureaus. Coloradoan Julie Miller won an astounding $18 million dollars in damages from the Equifax credit bureau because the agency stubbornly refused to correct proven false errors on Miller’s credit report.

Among significant changes implemented in the settlement agreement between Credit Bureaus and New York State Attorney General, a settlement called National Consumer Assistance Plan, the three biggest credit reporting agencies will:

  • Keep unpaid medical bills off your report for a waiting period of 180 days – to allow insurance payments to roll in.
  • “Consumers with medical bills awaiting payments from an insurance company will benefit from mandatory delay of at least six months before a debt collector can report unpaid medical bills to your credit report, giving the insurance process time to get the bill paid,” Ulzheimer told NewsBlaze.

  • Listen more closely to the consumers’ side when they dispute debts reported by “data furnishers” such as lenders and debt collectors.
  • In the past, credit bureaus often claimed the creditor or lender who reported the information had actually verified the accuracy of the debt, and that the information, no matter if an error had been reported to a credit bureau by a lender or debt collector, the credit bureau representatives told consumers the information would remain on their credit report.

    Such action shouldn’t happen anymore without a thorough and objective investigation according to consumer advocates.

  • Heighten oversight of data furnishers that submit delinquent debts to the credit bureaus
  • Provide a free credit report after a successful dispute, and also allow you to verify the correction was made
  • Erase unpaid municipal fines, traffic tickets and other debts that are not covered by a contract or agreement with the consumer
  • Date-of-Birth Requirement On Credit Cards: The settlement also includes a fraud fighting provision for reporting authorized users of credit cards by requiring that the user’s birth date be provided. Information on authorized card users that lacks a birth date will be barred from the cardholder’s credit report.
  • With major changes on the horizon in the credit industry, let’s hope American Consumers can be treated equally when disputes arise over questionable debts put on their credit report and hopefully the big three credit bureaus uphold their end of the settlement they reached with Attorney General Office.

    As an analyst and researcher for the PI industry and a business consultant, Clarence Walker is a veteran writer, crime reporter and investigative journalist. He began his writing career with New York-based True Crime Magazines in Houston Texas in 1983, publishing more than 300 feature stories. He wrote for the Houston Chronicle (This Week Neighborhood News and Op-Eds) including freelancing for Houston Forward Times.

    Working as a paralegal for a reputable law firm, he wrote for National Law Journal, a publication devoted to legal issues and major court decisions. As a journalist writing for internet publishers, Walker’s work can be found at American Mafia.com, Gangster Inc., Drug War Chronicle, Drug War101 and Alternet.

    Six of Walker’s crime articles were re-published into a paperback series published by Pinnacle Books. One book titled: Crimes Of The Rich And Famous, edited by Rose Mandelsburg, garnered considerable favorable ratings. Gale Publisher also re-published a story into its paperback series that he wrote about the Mob: Is the Mafia Still a Force in America?

    Meanwhile this dedicated journalist wrote criminal justice issues and crime pieces for John Walsh’s America’s Most Wanted Crime Magazine, a companion to Walsh blockbuster AMW show. If not working PI cases and providing business intelligence to business owners, Walker operates a writing service for clients, then serves as a crime historian guest for the Houston-based Channel 11TV show called the “Cold Case Murder Series” hosted by reporter Jeff McShan.

    At NewsBlaze, Clarence Walker expands his writing abilities to include politics, human interest and world events.

    Clarence Walker can be reached at: [email protected]