Credit Bureau Complaints Treated Like Dangerfield

Credit Bureau Complaints Treated Like Dangerfield

 

Credit Bureau Complaints

Rodney Dangerfield’s comedy album No Respect. (Photo credit: Wikipedia)

Hopefully your father wasn’t so stupid that he went to jail for stealing pens from a bank and you weren’t so ugly that the doctor slapped your mother when you were born, but like Rodney Dangerfield your electronic credit bureau complaints get no respect from the credit reporting agencies.  Why are electronic credit bureau complaints treated like Dangerfield?

The FCRA (Federal Credit Reporting Act) gives consumers the right to dispute incomplete or inaccurate entries in your credit reports.  The Credit Reporting Agency must investigate and remove credit bureau complaints within 30 days unless the complaint is frivolous.  Credit reporting agencies claim that 30% of credit bureau complaints are frivolous.  The way they deal with electronically filed credit bureau complaints would be laughable if it did not have such a serious impact on consumer’s rights. Online disputes are called “soft deletes”  They are frequently temporary and many times they re-appear after a 45-60 day period, particularly if the company resells the debt to a new collector. After you read this you will know why I say never dispute electronically.  Take the time to write out your credit bureau complaints and create a file the old fashioned way.

How Credit Bureau Complaints are Really Handled

According to the National Consumer Law Center‘s report “Automated Injustice” outsourcing of electronic complaints is highly profitable to the consumer reporting agencies.  Equifax has reduced its cost per dispute from $4.67 in 2004 to $0.57 by using an agency in the Philippines known as DDC.  TransUnion’s offshore vendor in India processes electronic credit bureau complaints for $8.00 per hr.

When a consumer uses the automated dispute system they log into the dispute suite and the dispute is converted into a two-three digit code that is then forwarded to the reporting agency for “investigation.”  No paper trail is created.  All your carefully detailed investigation is crunched into code!  If the credit agency deletes within 3 days they are not required to forward anything to the creditor.  Since the creditor never knows about it he will re-submit in the next billing cycle and the consumer is right back where they started.  By choosing to dispute on line you have also waived the right to be notified of the re-insertion!

Electronically submitted credit bureau complaints are placed on a form known as the Automated Consumer Dispute Verification form (ACDV).  This system is called the e-OSCAR system.

There are 26 available dispute codes (reduced from 100!) all of which are inadequate to convey a complete picture of the dispute.  The 3 digit code is all that is transmitted to the reporting agency.  Out of the 26 codes, 84.3% are reduced to 5 codes:

Actual Breakdown of Credit Bureau Complaints

 

  • Not his/hers……………………………………………………………………30.5%
  • Disputes present/previous Account Status/History…………………….21.2%
  • Claims inaccurate information.  Did not provide specific dispute……16.8%
  • Disputes amounts……………………………………………………………..8.8%
  • Claims account closed by consumer………………………………………7.0%

………………………………………………………………………….Total………….84.3%

One of the fundamental flaws of the whole credit reporting system is that creditors can add negative information to the report without having to provide any proof of validity.   The burden of proof is always on the consumer to prove that the item is incorrect.  Good credit is held hostage while the consumer fights this frequently uphill battle where the creditor’s claim seems to have preference regarding credibility.

You are the Key to Enforcing Your Credit Bureau Complaints Rights

Don’t sleep on your rights!  No one else cares. Credit bureau complaints are up to you. Creditors benefit in 2 ways from false negatives in your reports.  They get to charge you a higher rate while enjoying the benefits of taking a lower risk on your loan than the score indicates.

Credit Bureau Complaints Under CFPB Review

The Consumer Financial Protection Bureau has instituted a broad study of these practices and issued new guidelines.  How far this will take us into a new and fairer era of treatment of consumer complaints to credit bureaus remains to be seen

 

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After practicing law for 37 years Edward F. St. Onge, Sr. now devotes all his time to helping consumers achieve a high credit score with amazing speed. Learn the counter-intuitive secrets to credit scoring through his down to earth instructions backed by extensive knowledge of the laws and trends. All of the latest tricks and techniques that they don't want you to know now at your disposal. At last a level playing field for the consumer!

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