Navient's Deceptive Practices

Navient is one of the most well know student loan services in the United States. Millions of borrowers use this company to repay their federal and private student loans. They have lawsuits that allege harmful and deceptive practices that could impact your student loans. 

Below we will go deeper into Navient lawsuits that have began since 2017. 

Borrowers Being Mislead

The Consumer Financial Protection Bureau (CFPB) stated that Navient “illegally failed borrowers at every stage of repayment.” The CFBP alleged in a lawsuit that Navient damaged borrowers by providing negative and sometimes false information such as: not processing payments correctly and not taking the appropriate steps to rectify situations when borrowers submitted complaints to company.

The lawsuit had alleged that Navient purposely caused many borrowers to pay more on their loans than they were expected to. The CFBP is suing Navient for borrowers to get financial relief from their mishandling. 

The suit alleged that Navient directed borrowers into forbearance over other preferred options such as income-driven repayment plans. A forbearance temporarily pauses student loan payments without hurting the borrowers repayment standing, but the interest builds up while the borrower is not making payments. This means that borrowers end up paying more in interest rather than being able to save money while choosing the IDR plan. 

Navient Advises Pricey Options 

A lawsuit filed in October 2020 in New Jersey alleges that Navient pressured borrowers into taking out private student loans with co-signers, even though it wasn’t in the best interest of the borrower. New Jersey states that Navient told borrowers they could have family members guarantee their private loans as co-signers, but set in place almost impossible hurdles to let borrowers release their co-signers from the loan. This makes it so that Navient gets paid if the borrower defaults on the loan since Navient is able to collect by charging the co-signer on the loan. 

Lies and Collections

New Jersey states that Navient would tell borrowers that they owed more on the loan than they really did if they were behind on their loans. Navient did this by collecting the amount that was past due and also the next months amount. This has caused borrowers to overpay hundreds of dollars oftentimes when they could not afford it. The CFPB alleged that Navient would not allow some borrowers to discharge their loans even though they qualified. The CFPB stated that “severely and permanently disabled borrowers with federal student loans, including veterans whose disability is connected to their military service, have a right to seek loan forgiveness under the federal Total and Permanent Disability discharge program—Navient misreported to the credit reporting companies that borrowers who had their loans discharged under this program had defaulted on their loans when they had not.” 

How This Affects Your Student Loans 

Many lawsuits are still on-going, so as of right now you won’t see an impact. If you are experiencing any issues with your student loan servicer, you can take these steps to ensure that it is working in your best interest: 

• Review all of the details in your loan. Whether you have been on autopay or have not been able to make payments in awhile, you might not know what is happening with your loans or even the types of loans you have. Since Navient services private and federal loan lenders, you should check what you have before exploring your options.

• Look for alternatives on your own. You can explore different repayment options such as: income-driven repayment plans, forgiveness, or student loan refinancing. It is vital to know what options you have before speaking to your loan servicer so that you are informed about different offers.

• Ask the servicer for options. After researching on your own, contacting your servicer is next. Ask them what you qualify for and how each option will impact your repayment and what you will eventually repay over the lifetime of your loan. If the lender mentions that you do not qualify for specific programs or if they direct you to more expensive programs and payment options — it may be a red flag.

• File a complaint if necessary. If you believe that your loan servicer is causing you to pay more money than you think you owe or you’re being mislead, consider filing a formal complain. You can do this directly with your lender, your states attorney general or at the federal lever with the U.S. Department of Education, Federal Trade Commission, or the CFPB. If you do this, you will need documentation proving your case. Keep a detailed record of notes, every phone calls, and correspondence with your lender.

Does Navient Service Your Loan? 

Navient services millions of borrowers but it does not service ever borrower. You can check your servicer with the Department of Education if you have federal loans. The best way to find out who services your private loans is to check your latest correspondence. If you have not made payments in awhile, you should check your credit report. You can do this for free through www.AnnualCreditReport.com. Due to the pandemic you can check your reports weekly for free until April 2022. This will allow you to see all of your debt, including delinquencies, in default, and paid off loans. 

Will Navient Forgive Student Loan Payments? 

A lawsuit against Navient that was settled July 2020 gave no monetary damages to the borrowers affected. Instead, Navient implemented improved training for employees regarding PSLF. It is a possibility that future lawsuits could proved the affected borrowers a monetary compensation, but it is unlikely that Navient will forgive student loan payments. 

Many lawsuits are still ongoing. If you feel that you have been negatively and wrongfully affected by Navient, consider reaching out for help and guidance. 

Identity Theft By Family or Friends

Identity theft isn’t always committed by a stranger or a mystery hacker. Oftentimes, when your identity is stolen, it is taken by someone who know. In 2014, there were approximately 550,000 identity theft and fraud victims reported that was committed by someone they knew and the numbers have likely raised.

It is hard enough to deal with a stolen identity, let alone when it is perpetrated by someone you know.You may feel betrayed, violated, and your trust may be broke. It might be difficult to trust anyone again. These are valid feelings to have.

When the theft is by a family member or friend, you may have a hard time turning that person in or filing a police report because of the ramifications it will have for that person and the judgement by your other family members. They may even pressure you to let the matter go. It is even trickier when your spouse is the one who stole your identity. 

What is Identity Theft 

Identity theft happens when someone uses your identity for their own financial gain. It could be for making purchases, qualifying for a loan, or getting approved for a credit car, among other things. 

Parents may be under the impression that using their child’s information for financial gain is okay, but that is a form of identity theft. Some other examples include:

• A family member uses your name and SSN to qualify for a credit card or loan.

• A parent uses their child’s name and SSN to sign up for utilities or cable.

• A family member uses another family members name and SSN to qualify and sign for a lease.

• A spouse uses your name and income without your permission to open an account without you knowing.

Often, you may not know that it has happened until you have a delinquency on an account, an outstanding debt under your name, or an unfamiliar account on your credit report. It is still considered a crime that needs to be corrected even if it hasn’t gone into collections. 

What To Do

Once you realize that your information has been stolen you need to contact the creditor and business and explain that you are not responsible for the debt. You should also file a police report. This is the only way that you will be able to fix your credit report. You need to also place a fraud alert with the credit bureaus and report the theft to the Federal Trade Commission (FTC). It is difficult to file a police report on someone that you know, but it is a must if they have jeopardized your financial future. 

What if Friends or Family Do Not want you to File a Report?

If you are being pressured to let the situation go by friends or family members, you have to realize what is at stake if you do not report the theft. Your credit history is on the line, and you will ultimately be the one responsible for repaying the money owed unless you take the necessary steps to dispute the charges. If the person gets away with the theft, you might be putting others at risk as well. They may feel that they can get away with stealing someone else’s identity if they see it as an easy task. 

Other Ways to Protect Yourself

You will possibly need to change your bank account number as well as close all the accounts that you currently have open. You should take the time to set up alerts on your credit report. This will help protect you from identity theft in the future. 

If your credit card(s) are stolen, you are at an even greater risk of having your identity stolen. You will want to carefully monitor your statements. You should be requesting your credit report every few months to check over your information. Right now, credit reports are free weekly from www.annualcreditreport.com until April 2022. Many banks are now offering free credit report tracking as well. 

Dealing With Your Family After

You need to remind yourself that identity theft is not your fault, and you did not do anything wrong. You will likely be dealing with feelings of betrayal regarding the person who did this. You should take the time to seek advice on how to communicate with them, what boundaries you need to set up, and if it is possible to maintain the relationship.   You should always be cautious about how you share your information with friend and family members. 

Let us know if you have questions on dealing with this type of situation. 

Free Report Weekly Until April 2022

On March 2, 2021 the three major credit bureaus, TransUnion, Equifax, and Experian in a joint statement said that they will continue to offer consumers free weekly credit reports until April 20, 2022 due to the ongoing COVID-19 pandemic. 

Prior to the pandemic, credit bureaus were required by law to provide a single free report just once a year and consumers were charged about $20 each additional time they needed one. 

Frances Creighton, president and CEO of the Consumer Data Industry Association, which represents the three credit bureaus told Consumer Reports Inc.: “None of us could have foreseen that the pandemic situation would last longer than a year.” This time is especially important for consumers to have the key to their financial information. 

Credit reports are used by lenders to determine whether you’re a good credit risk. Your credit report shows whether you made mortgage, credit card, auto loans, and/or student loan payments on-time. Employers, potential landlords, cellular service providers, and employers are able to review your report with your permission. 

Your credit score is calculated by the information in your credit report. This is the three-digit number that is meant to determine your creditworthiness. Getting a credit report on a regular basis can help consumers monitor their information because changes in the report can happen daily. 

You can obtain your credit reports at AnnualCreditReport.com. The credit reporting industry has seen an unprecedented amount of consumer complaints made to the Consumer Financial Protection Bureau over errors discovered in credit reports. Credit report errors accounted for nearly 2/3 of the total complaints in 2020, which is a rise of 23% from 2019 according to the CFPB’s complaint database. 

It was found that up to 1/4 of credit reports contain at least one mistake according to a 2012 Federal Trade Commission Report. Consumer Reports Inc. conducted a nationally representative survey of 2,223 U.S. adults in January 2021 and found that 12% of Americans who checked their credit report found an error. 

Errors include anything from incorrect address information to more serious problems, such as loans that are listed multiple times, paid-off loans that appear as still open, and/or information about someone else’s account that appear on your account. 

Last year, in another survey, participating consumers noted a range of mistakes on their reports. One man found that his mortgage was listed twice. His bank had promised to fix the error but it still remained on his report months later. Another consumer’s report had his sons information mixed with his own. One other found that an unpaid bill had went into collections in a state he had never lived in. 

These errors can negatively affect a consumers credit score and could be a particular problem for people who deferred loan payments with lenders or credit card companies. 

Last May, the Coronavirus Aid, Relief, and Economic Security Act was passed and required companies providing federally backed mortgages and student loans to offer deferrals while still reporting to the credit bureaus that the loan is current. Some credit card companies and auto lenders also offered deferrals. For some, those deferred loan payments were still being reported as late. This is another good reason to check your report often. 

There are consumers who are advocating that credit reports should be free permanently. They feel that consumers should not be charged to access their own data. Chi Chi Wu, an attorney at the National Consumer Law center, who has a focus on credit issues, said: “There’s nothing I can think of that would legally or logistically prevent the Big Three credit bureaus from making free weekly reports permanent”. 

Credit bureaus are suppose to look at all supporting documentation when a consumer files a dispute, but they very often do not. Agencies should ensure that any supporting documents a consumer submits in the automated dispute filing is considered in the bureau’s review of their case. Oftentimes the task of reviewing disputes is outsourced and the bureaus will usually accept the results of the outsourced investigation without questioning the accuracy of the findings. 

Currently, credit bureaus will only match 7 of the nine digits of a social security number in the consumes report. To avoid errors, advocates are pushing for the bureaus to require the matching of all nine digits. 

If you find an error in your report you should file a dispute with the three credit bureaus. TransUnion, Equifax, and Experian are separate companies so the disputes must be filed to each. It is best to send a letter by certified mail and keep copies for yourself. The paper trail will make it easier to confirm that the credit bureaus are following the lawful time lines. You should avoid filing disputes online because often credit bureaus have standardized forms that might force you to oversimplify your situation and never have an actual representative look at the dispute. 

Along with the letter, you should include any evidence. This could be account statements or information on payments made that will protect you from a credit bureau dismissing your claim because of lack of sufficient backup information. Avoid resubmitting a evidence later on because it could be denied if the claim is considered similar to previous ones. 

Dispute Still Denied

If your disputes get denied consider hiring an experienced lawyer to file a case. We specialize in FCRA law, your consultation is free, and your legal fees will be covered so there is no out of pocket expense. 

Personal Statement 

You are able to add a personal statement to your report to help explain your situation. Banks and other institutions will typically read and consider this note when making a decision about your creditworthiness, especially if you lost a dispute and have a negative item on your report. 

Ask to send updated report

If you won a dispute you should ask the bureaus to send out an updated report. This new report will go to anyone who has checked your report within the past six months. 

Plaintiff Alleges Obtaining Credit Report for Marketing Purposes is Not Permissible.

Last month, on February 16, 2021, the United States District Court Middle District of Florida Tampa Division denied a motion to dismiss by Defendant when Plaintiff claimed that Defendant allegedly violated the federal Fair Credit Reporting Act (FCRA). Plaintiff claims that Defendant requested their credit report from two Consumer Credit Reporting Agencies without a “permissible purpose” under the FCRA. 

Plaintiff alleged the Defendant had obtained their credit report without their consent for “marketing purposes” which is not a permissible purpose under the FCRA. The FCRA prohibits a person from using or obtaining a consumer report for any purpose unless “the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished” under the FCRA and “the purpose is certified in accordance” with the FCRA.

Plaintiff alleged that Defendant engages in consumer lending of high-interest bearing loans and had obtained Plaintiff’s credit report two times without her consent to assess whether she would be a good loan prospect for Defendant’s marking efforts.

The United States District Judge Kathryn Kimball Mizelle stated in the order that the court must accept the conduct is not a permissible purpose as true at this point under the FCRA. She also stated that “Defendant fails to make any argument that it obtained Plaintiff’s credit report for a permissible purpose or under a reasonable interpretation of the statute. Accepting Plaintiff’s allegations as true and viewing them in the light most favorable to her, the Court concludes that Plaintiff has adequately pleaded enough facts to proceed past the motion-to-dismiss stage.”

In 1970, Congress enacted the FCRA to promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies (CRA’s), protect consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, and regulate the collection, dissemination, and use of consumer information, including consumer credit information. 

In background screening, lawsuits for alleged violations of the FCRA have become very common and can result in monetary awards in thousands or even millions of dollars. In 2020, FCRA lawsuit settlement proposals reached up to an $18 million. According to the provider Employment Screening Resources® (ESR), FCRA lawsuits will continue to serve as a legal compliance signposts for employers conducting background checks on job applicants. 

What to Know About the 3 Major Credit Bureaus

Credit reports affect your life more than most people realize. When you are leasing or buying a new home, applying for loans or credit cards, getting insurance coverage, or applying for a new job, there is likely someone using one of your credit reports to evaluate you. 

Because your credit reports carry so much of your information, the companies in charge of putting together and selling them have a major influence over your financial life. These companies are known as credit bureaus. In this blog we will look closer at what the credit bureaus do and the rules they must follow. 

The three main credit bureaus in the U.S. are Equifax, TransUnion, and Experian. They are the three largest nationwide providers of consumer credit reports to lenders, insurance providers, employers and other companies who use credit information to help predict risk. 

Credit reporting has been around for over 100 years, but it has evolved over time. Credit bureaus use to be small and localized, but overtime the “Big Three”, as the major credit bureaus are known, attained may of these smaller credit agencies and consolidated their data into larger databases. 

Presently, each of the three major credit bureaus maintains a database with information of approximately 220 million U.S. consumers. When you apply for a loan and/or credit card, it is a given that the lender will access at least one of your credit reports provided by these three companies during the application review process. 

Big data, as the credit reporting industry is often called, brings in big money. The three main credit bureaus earn billions of dollars every year selling credit information to other companies. They collect information about you and sell it to others who are willing to pay for the data.  

How They Get Your Information

You may not recall giving credit bureaus permission to create a credit file about you, and you shouldn’t. This is because that is not how the bureaus work. Many companies that you and others owe money, are willingly sharing details about their customers with the bureaus. These companies include lenders, banks, credit card issuers, collection agencies, and others. These businesses are called data furnishes. Data furnishers opt to share information with the credit bureaus for many reasons. The biggest motivator is that credit reporting give a company’s customers extra motivation to pay their debts and to pay on time. 

Most of the data in credit reports comes from data furnishers, but the credit bureaus collect information in other ways too. When it comes to public records such as bankruptcies, the credit bureaus seek out purchase information from data aggregation companies like PACER, AKA Public Access to Court Electronic Records, and LexisNexis. 

Information the Credit Bureaus Collect

The credit bureaus collect a great deal of data to include in your credit report but ignores some details about your life also. For example, your credit reports do not include criminal records, income, or bank account balances. The information that they do collect for credit reporting purposes can generally fit into one of the five categories.

Categories:

1.Personal Information

• Name (current and previous)

• Addresses (current and previous)

• Date of Birth

• Employer

• SSN

2. Collections

• Accounts sold to, or managed by third-party debt collectors

3. Public Records

• Bankruptcies

• Previously included judgements and tax liens as well

4. Credit Inquires

• Details about when your credit was accessed during the last two years.

5. Accounts 

• Credit obligations (current and previous)

• Account numbers

• Payment History

• Current Balance

• Status (current, closed, past due, charged-off, etc.)

• Credit Limit

• Date of account opening

Credit bureaus collect this information for the reason that it is profitable. Other companies are willing to pay for your credit reports. Credit reports are helpful to lenders and other companies to predict the risk of doing business with you. Scoring models, like FICO and VantageScore, can also use these details to calculate your credit score. 

Credit Bureaus Must Follow Federal and State Laws

It I can be aggravating that the credit bureaus are allowed to collect sensitive financial information without your permission. Even though these companies are allowed to gather your information and sell it to others, there are rules in place to help protect you. 

At the federal level, the credit bureaus are obligated to follow the Fair Credit Reporting Act, also known as the FCRA. The FCRA is in existence to protect consumers and regulates what consumer reporting agencies are required to do when it comes to your information. The full text of the FCRA is over 100 pages, but here are some of the key provisions of the act:

• Credit Report Accuracy: The bureaus must impose “reasonable procedures” to assure “maximum possible accuracy” of the information concerning the individual. They should only be including accurate information on your credit reports. Should you discover credit reporting errors or fraud, the FCRA allows you to dispute the information. When you submit a credit dispute, the bureau must investigate your claim. They have 30 days to respond to the dispute and to delete information that isn’t verified as accurate. 

• Free Annual Credit Reports: It is a good idea to review your credit reports frequently. An amendment from 2003 to the FCRA, known as the Fair and Accurate Credit Transactions Act or FACTA, provides free access to each of your credit reports once every year. AnnualCreditReport.com is the website you should visit to access these free reports. The three major credit bureaus are offering a free weekly credit report access at this website until April 2021 in response to the Coronavirus pandemic.

• Permissible Purpose: The credit bureaus are only allowed to sell your credit reports to certain entities such as Lenders, insurance companies, landlords, and employers (with written permission). They may have “permissible purpose” to buy a copy of your report. In good news, someone such as your ex-partner or random creepers would be out of luck.

• Freezing Your Credit Report: You have the right to freeze your credit reports as a protective measure. When a credit freeze or security freeze is in place, companies you don’t have a current relationship with cannot access your credit information. In order to grant them access to your data, you must first unfreeze your report. An amendment established in 2018 to the FCRA, known as the Economic Growth, Regulatory Relief, and Consumer Protection Act, lets your freeze and unfreeze your reports for free.

• Opting Out: The credit bureaus are able to sell your information to certain companies for marketing purposes, even if you are not applying for financing. Your credit data may have been sold without your knowledge if you have ever received a prescreened offer of credit or insurance in the mail. Use the link OptOutPrescreen.com or call 888-5-OPTOUT (888-567-8688) if you wish to stop sharing your credit information for marketing purposes

Along with the FCRA, the credit bureaus must comply with state laws as well. For example, on top of the free annual credit reports provided by the FCRA, state law might require the credit bureaus to give you more free reports. In some states, employers aren’t allowed to review your credit information as a part of the background check. 

Different Credit Bureaus Contain Different Information

When reviewing your credit reports from all three bureaus, you will likely find similar information on each report. But, there are probably some differences as well. For example, your Experian credit report might show a collection account, while that account may be missing from Equifax and TransUnion. 

There are many reasons why your credit reports could contain slightly differing information. Here are a few examples:

• The credit bureaus are competitors and they do not share data with one another.

• Credit reporting is voluntary. Just because a data furnisher opts to share information with one bureaus does not mean it has to report information to all of them. The most major lenders will report to all three credit bureaus.

• The consumer doesn’t always understand the dispute process. Someone might dispute an incorrect item with one credit bureau, but not the other two. This could results in an incorrect account being deleted form one credit report while it remains on the others.

• Dispute results can be inconsistent. Even if you dispute an inaccurate account with all three credit bureaus, the results may vary. Each bureau will conduct its own investigation. So, while a data furnisher might verify the account as accurate with one credit bureau, it could also fill to respond to the others. This might lead to a disputed account remaining on one or more of your reports, but not all of them.

• Your credit file could be mixed. Credit bureaus can make mistakes. One major mistake is combining your credit file with someone else’s file. This often occurs when people have similar names. Generally, mixed files occur with just one credit bureau at a time.

It is critical to understand how the credit bureaus work, whether you’re building credit for the first time, rebuilding damaged credit, or trying to maintain your already good credit rating. The credit bureaus are important but they do not control every aspect of your financial life. 

The credit bureaus don’t assign your credit scores. They don’t approve or deny loan applications. They don’t decide which accounts you will open or how you will manage your credit obligations. Knowing what the three credit bureaus are allowed to do and which behaviors are wrongful can protect you and help you keep your credit intact. 

Statutory Violations for All Class Members

In a previous blog, I wrote about Plaintiff Sergio Ramirez, who was trying to buy a car in 2011 and found out that he was incorrectly put on a “terrorist list” by TransUnion LLC (“TransUnion”), one of the three major credit bureaus. Ramirez had sued on behalf of himself and 8,184 other TransUnion users who were also wrongfully designated. Ramirez alleged that TransUnion violated the Fair Credit Reporting Act (FCRA) “by placing the false alerts on their credit reports and later sending misleading and incomplete disclosures about the alerts.” A jury found in favor of the case and each class member was awarded $984.20 in statutory damages and $6,353.08 in punitive damages.

TransUnion appealed, in part because the class members (not including Ramirez) lacked standing. The Ninth Circuit held that “each member of a class certified under Rule 32 must satisfy the bare minimum of Article III standing at the final judgement stage of a class action in order to recover monetary damages in federal court.” The Ninth Circuit also held that each class member had requisite standing to obtain damages, even though about 3/4 of the class members did not have their reports disclosed to third parties. The court had found standing in that TransUnion violated the class members’ statutory rights under the FCRA.

On December 16, 2020, TransUnion filed a writ of certiorari, meaning that all Justices have an opportunity to state their views on the case and raise any questions or concerns they may have. The court granted this petition. 

On March 30, 2021, the Supreme Court will hear the arguments on whether a damages class action is permitted by Article III of the Constitution or Rule 23 of the Federal Rules of Civil Procedure where the majority of the class has suffered no actual injury. This will be the first time the Supreme Court will apply the rulings of Spokeo, which held that plaintiff “cannot satisfy the demands of Article III by alleging a bare procedural violation,” to an entire class. 

The Supreme Court’s ruling would make it difficult for larger companies subject to a variety of laws and regulations to defend against class actions. Other companies such as Google, eBay, and several others, have filed a brief in support of TransUnion. They argue that the services provided “are often target for claims under the federal and state laws that confer private rights of action and contain statutory damages provisions similar to the provisions in the FCRA including the Wiretap Act, the Stored Communications Act, the Video Privacy Protection Act, and the Telephone Consumer Protection Act.” If the ruling is in TransUnion’s favor, this could aid those companies in defending against damages claims based only on statutory violations. 

The Supreme Court’s decision could also affect the settlement process inherent in the litigation of class actions. The U.S. Chamber of Commerce and the National Federation of Independent Businesses filed an amicus brief arguing that affirming the Ninth Circuit’s holding “would embolden [enterprising] lawyers to seek out atypical clients in order to leverage their uniquely sympathetic experiences into a multi-million-dollar damages award or settlement – all based on technical statutory violations.” In their view, upholding the lower court’s ruling would encourage settlements even more so than class actions already do.

The Supreme Court’s forthcoming decision will have significant implications on defenses to class actions, and could possibly expand liability for companies most often entangled in class actions with plaintiffs that have tenuous claims based only on statutorily created rights of action.

Twitter Shredded by Credit Karma's Comically Inaccurate Scoring

Last week, Twitter was bombarded with consumers expressing their (hilarious) frustrations concerning their credit scores provided by Credit Karma, the personal finance company owned by Intuit. 

The frustration comes from users realizing that Credit Karma is providing them with lower credit scores than what is found on their credit reports. 

Consumers were tweeting about applying for credit cards, loans, and attempting to purchase vehicles thinking that they had good or excellent credit, only to find out that the credit score that the issuer pulled was lower than what they had found on Credit Karma. The tweet that started the meme trend can be found here.  

Twitter users were quick to share and create memes about how their credit score was inflated on Credit Karma. @RiotGrlErin had even tweeted “checking your credit score on credit karma is like checking your symptoms on WebMd.”

But, users were on to something important when it comes to checking your credit score. There are many reasons why your credit scores differ between what a personal finance website tells you and what lenders or credit card companies find. There are mainly two reasons: For one, a lender may pull your credit from different credit bureaus, either Equifax, Experian, or TransUnion. Your score can differ depending on which bureau your report is pulled from, since they do not all receive the same information about your credit accounts. Secondly, there are different credit score models and versions that exist across the board. 

Credit Karma’s website states that they use the VantageScore® 3.0 model. VantageScore may look at the same facts that the other popular FICO scoring models does, such as your payment history, amounts owed, length of credit history, new credit and your credit mix but each scoring model weighs these factors differently. Because of this, VantageScore and FICO Scores tend to vary from one another. The VantageScore® 3.0 on Credit Karma will likely be different from your FICO Score that lenders use most often. If you are planning on applying for credit, make sure to check your FICO score since there is a good chance that lenders will use this to determine your creditworthiness. FICO Scores are used in over 90% of U.S. lending decisions. It is important to note that there are also industry-specific FICO Scores to look at when you are planning a specific purchase. For example FICO® Auto Scores are ideal if you are wanting to finance a car with an auto loan. If you are planning to buy a house you should look at FICO® Scores 2, 5 and 4. 

The best way to look at your scores is to visit www.annualcreditreport.com where you can access and download your reports from Equifax, Experian, and Trans Union. Due to Covid, your report is free to access once a week until April 2021. 

Feel free to shoot us a message for any questions!

COVID-19 Identity Crimes on the Rise

The number of COVID-19 identity crimes are expected to rise in 2021. The Identity Theft Resource Center (ITRC) has new data that shows an increase in identity crime victims being targeted multiple times. The rate was 21% in 2018 and increased to 28% in 2019 before the pandemic. 

With the stress of COVID, identity theft is not the top focus of people right now and victim resources are getting harder to research. The U.S. Department of Justice funds allocated for crime victim services has dropped from $3.7 billion to $1.9 billion since 2018. New fraud cases and identity crime victims are likely to increase with the pandemic-related benefits and stimulus payments due early this year. 

2020 was a difficult time for many people and it continues to affect them today. Some have lost their jobs and others had to close their businesses. There have been millions of state unemployment benefit-related identity theft cases that have been detected across the U.S. since March 2020. The ITRC receives less than 20 inquires regarding unemployment benefits in a year on average but in 2020 they received more than 700 unemployment benefits fraud victims inquiring for help. A sharp increases in scams was seen also. This has given criminals countless opportunities to trick people with phishing scams, charity scams, healthcare scams and work-from-home scams. 

What Will 2021 Bring?

Identity crimes are expected to impact victims well into 2021. Many victims may not even realize that their identity information was misused until they received their IRS Form 1099 for non-wage income. The research by the ITRC shows a significant increase in identity crime victims being victimized a second time, even before the rise of fraud, scams, and identity crimes in 2020. An analysis of the post-pandemic shows an even greater spike. 

The ITRC and other private-sector researchers show that cybercriminals looking for profit are using consumer’s and employee’s bad security habits, as well as the changing work environment, to attack businesses more often. Resources for cybersecurity training and education along with identity-related crime victim assistants are lessening. 

The U.S. Department of Justice (DOJ) funds allocated for all crime victim services has dropped from $3.7 billion in 2018 to $1.9 billion. Discredtionary DOJ grants awarded to victim services organizations has dropped from $311 million in 2019 to $144 million in 2020. Funding for programs that support victims of identity crimes, compromises, cybercrime, scams, and fraud have been reduce to $0. According to the cybersecurity firm Coveware, ransomware payments have grown on average from less than $10,000 per incident in 2018 to $233,000 as of the third quarter of 2020. Some large enterprises are reportedly paying ransoms over $1 million. The most common cause of ransomware attacks is stolen credentials to access a business system or network remotely. 

Research by the ITRC that will be published in May 2021 shows that there is an increase in identity crime victims being targeted multiple times. It could be even worse after the rise in crimes committed during COVID. 

Data shows that the COVID identity crimes will continue in 2021. More victims will suffer from trauma of a second, or even third crime. Getting the fraud resolved can be a daunting process and some victims will have trouble meeting their basic needs or find a job because they will not pass a background check until the fraud is resolved. Winning the battle to protect ourselves from cybercriminals will require us to devote more resources toward assisting victims and devote more time and attention to educating consumers and employees of their need to be cyber-aware and vigilant. 

If you believe that your information maybe have been compromised, contact us on our page for resources and help. We can direct you on how to solve this issue and guide you through a potential lawsuit. 

FTC is Launching Identity Theft Awareness Week

The FTC is launching an Identity Theft Awareness week. We will be doing the same. Follow us on social media to gain more insight.

Below is from the FTC website with helpful links and information.

FTC Marks Identity Theft Awareness Week with Events to Help Consumers Identify Risks of Identity Theft During the COVID-19 Pandemic

The Federal Trade Commission is launching Identity Theft Awareness Week, February 1-5, 2021, with a series of events to highlight steps consumers can take to help reduce their risk of identity theft and recover if identity theft occurs.

Identity theft happens when someone steals personal information about you such as your Social Security number or credit card information, and uses it to commit fraud. Reports about any type of identity theft topped the list of consumer complaints submitted to the FTC through the third quarter of 2020.

As part of Identity Theft Awareness Week, the FTC will participate in webinars and other events to highlight what you can do to protect your personal information, red-flag warning signs of possible identity theft, and steps to take if identity theft happens to you. Events include a webinar on Monday, February 1, with Identity Theft Resource Center and FTC experts discussing identity theft during the pandemic, and a Facebook Live discussion on Thursday, February 4, hosted by the AARP Fraud Watch Network, focused on COVID-19-related identity theft, current trends, and ways to protect yourself.

You can find the full list of events at ftc.gov/IDtheftweek, along with details on how to participate and tips on how to reduce the risk of identity theft.

The Federal Trade Commission works to promote competition and to protect and educate consumers. You can learn more about consumer topics and report scams, fraud, and bad business practices online at ReportFraud.ftc.gov. Like the FTC on Facebook, follow us on Twitter, get consumer alerts, read our blogs, and subscribe to press releases for the latest FTC news and resources.

For Consumers

Identity Theft Awareness Week Calendar of Events

More news from the FTC >>

Home Security Company Violated FCRA and Must Pay a $600,000 Civil Penalty

On December 11th, 2020 a home security company in Utah  had an alleged violation of the Fair Credit Reporting Act (FCRA). The Consumer Financial Protection Bureau (CFPR) announced that the Arkansas Attorney Generally reached a settlement with Alder Holdings, LLC. Alder charged higher activation fees to consumers with lower credit scores without providing a notice. 

The settlement terms include a $600,000 civil penalty that Alder will pay and they will have be required to provide proper notices to their customers in the future. Alder sells home security alarm systems by door-to-door selling. They have sold products and services to over 115,000 customers. When a salesperson sells an alarm system, the customer is entered into a long-term contract that contains monthly monitoring fees and an initial activation fee. Through monthly installments, the activation fee may be deferred. 

The alarm and monitoring material is sold to the customer at a much lower price than the retail value. Alder then recoups their costs and makes a profit through the deferred activation fee, monitoring fee, and the arrangement of the long-term contract. 

Alder grants that their customers have the right to defer payment of the activation fee and this arrangement qualifies as an extension of credit for FCRA purposes, according to the complaint. Not all customers of Alder are charged the same activation fee. Each customer is evaluated by Alder, and is evaluated by their credit score. The score determines the amount that the customer has to pay for the activation fee. The FCRA’s Risk-Based Pricing Rule regulates the practice of providing a less than favorable credit terms based on a review of a consumers credit report. This requires that that a company utilizing this practice must provide a Risk-Based Pricing Notice to the affected customers. This notice has to contain information about the consumers report, the identity of the provider of the report, and the customers rights under the federal law to obtain a copy of the report and include an option to dispute its accuracy, among other things. 

Alder failed to provide these notices to their customers, and has violated the FCRA and regulation V according to the complaint. 

Alder is also currently involved in a related litigation with the State of Arkansas in Arkansas state court. According to the terms of the settlement, if Alder will agree to pay $100,000 to settle the related state-court litigation, that amount will be offset from the $600,000 civil penalty in this case. 

Only One-Third of Americans Checked Their Credit This Year

CompareCards have conducted a survey for the third year in a row in August 2020 following the massive data breach from Equifax four years ago. Only thirty-three percent of Americans have checked their credit reports in the past year. This is a concern since there have been an increase in credit card fraud attempts during the Covid-19 pandemic. In 2019 39% checked their reports and in 2018, just 37%. It is most crucial to be checking your reports at this time because it has never been easier. For the past four months until April 2021, consumers are able to check their credit reports for free once week, instead of just once a year through AnnualCreditReport.com.

Consumers aged 75 and older are at most risk for credit card fraud and only 20% of this age group has reviewed their credit report in the last year. Cardholders are taking less action to prevent identity theft. Here are some steps to take to prevent identity theft:

• Review online banking and credit cards often

• Check your credit score

• Activate alerts via text, email, etc to inform you when changes are made

• Review your credit report

• Change passwords to your banking and credit card sites

• Change the PIN on your ATM card

From a group of the surveyed consumers, 41% of cardholders were unaware that they had the option to check their credit report for free weekly due to the pandemic. Twenty-eight percent of those surveyed admitted that they did not plan to take advantage of this free allowance. Checking your credit report every week isn’t necessary but checking it once a month will put your mind at ease and keep you up to date and it won’t do any harm. Once you take a look at the reports one or two times, it will give you a good idea of what it looks like and you will have an easier time finding mistakes and errors, if they were to occur. Consumers who don’t have a credit card or a loan are more likely to feel that they do not need to review their reports as often. There is too much fraud out there to not keep tabs on your file. 

Only half of credit or debit cardholders check their credit score each month and a third of those admit that they do not always review their card or bank statements to ensure accuracy. Women are dropping the ball on checking their reports with only 41% doing so monthly as opposed to men at 59%. Breaking down to different generations, Gen Xer’s are best about checking their scores followed by Millenials. 

The fatigue of the pandemic may be distracting from the focus of identity theft. There has been an economic downturn and rampant job loss which is understandable why some consumers may be more focused on other areas of their personal and professional lives than they are of identity theft. More people are at home more often, so instead of binging out on Netflix during downtimes, we could be keeping up to date on identity theft. 

Most people are hesitant about providing their personal information online but nearly 47% of people with a credit or debit card provided their entire social security number in an online form in the past month according to the survey. In 2019 it was 40%. This increase may have occurred due fluctuations in the job market and people applying for unemployment and onboarding at new jobs online. Even providing a partial SSN causes concern. This puts consumers more at risk for identity theft, which makes checking your reports and statements a priority. 

Seventy percent of cardholders have reported using the “sign in with “Facebook” feature to sign up or log in to various websites. While this is a convenience, using your Facebook account to log into other multiply accounts can be problematic. There has been security concerns about Facebook’s ability to protect personal data. The information you are giving has an increased risk of being exposed which is a major target for hackers. Facebook is a signal site that contains information about you that are useful to hackers. Facebook has a past for not keeping data safe so it is important to proceed with caution when you login to other accounts or webpages. 

Nearly half of cardholders (47%) were victims of a data breach within the last year and 14% of them experienced this harm more than once. Consumers may want to take stronger steps to protect their identity such as:

• Freezing your credit- With a credit freeze, or security freeze, you can restrict access to your credit reports and prevent others from opening new credit-related accounts with your information. You will still have access to your credit reports during the freeze and your credit score will not be affected.

• Sign up for alerts - Many companies are on the market to provide services that monitor for identity theft as well as keeping an eye out for Social Security number scanning. 

• Create safer digital habits - You can set calendar reminders to change important passwords often and learn to recognize the signs of phishing emails and other online scams. It is important to remain cautious when providing personal and financial information online and you may even want to invest in security software for electronic devices. 

Most of all it is important to realize that you, as a consumer, have your financial health and security in your own hands. Nobody cares as much about your credit and money as much as you do. It is vital that you protect your personal information and finances because no one else can do it for you. 

Drastically Dropping Credit Score

Many people are are wondering why their credit scores are dropping at a drastic rate. You may be doing things such as paying off auto loans, credit cards, and even making credit card payments well above the minimum due. So, this drop seems really unfair, doesn’t it?

You first want to retrieve your credit reports from the three main bureaus: Equifax, TransUnion, and Experian. You can obtain and download these reports from: AnnualCreditReport.com  These reports are now available weekly, for free until April 2021! Every month millions of data are retrieved by credit bureaus to be posted. The items in your report should be accurate but sometimes errors can be found. You should check for things such as: a misspelled name, a mixed-up account in the lenders’ records, a suffix such as “junior” that should be “senior” and other items that could be a mix up with someone else’s data on your report. By getting all three reports you will be able to see the discrepancies faster.

The bureaus do not have all the same information. They compete for business both into and out of their files. Some lenders may only be reporting to one of the lenders and you may find that you have very different credit scores from each reporting agency. Make sure to dispute anything that you do not recognize as yours, that is more than seven years old, or if something is missing. The best way to dispute is by sending them a letter through certified mail, so that you know an actual person is reading your dispute and you can verify that they received your letter. Since they are in competition with each other, if that data is incorrect, that is not a good competitive business for you. 

High Balances

If you are making the above minimum payment on a number of cards which you are carrying balances, the interest being charged is making your balance go up which is causing you to lose points.  You should be keeping your credit card balances below 30% of your credit limit. If you have multiple cards, don’t focus on just paying off one. The card with a high balance will still effect your credit score regardless if they other(s) are paid off. 

Accounts not appearing on report

Some lenders don’t report to every bureau every month. It costs the lender money to report to the bureaus that you have paid a bill. Auto lenders are quick to repossess a vehicle if you miss a payment but might find little advantage in reporting the paid-off loan instantly. It may take a three-month period for that good news to get published! It’s unfair! 

Closed Credit Card Accounts 

If you have paid off credit cards and then closed the accounts, the utilization points in your score will have gone down because you have lost the available credit from those cards. This is a reason why it is important to not close accounts if you can prevent from doing so. Your credit limits are tied directly to your credit utilization ratio, which counts for 30% of your overall FICO score. You should try to keep credit cards open, whether you are using them or not, unless you are being charged a large fee for their use. One tip I can suggest: If you have two cards from the same bank issuer, you should ask to have the closed account credit limit added to your remaining opening account. This will keep the utilization factor low while saving you an annual fee. 

Your credit history has gotten shorter

If you have recently closed any other accounts, it could have impacted your credit history. Your credit history is how long you have had credit being reported in your name. In credit reporting, the older the better. This makes it more difficult for young people to build up their scores. It is useful to know that some scoring models only count your open accounts in this calculation. 

What affects your credit score?

Here is a brief FICO score primer:

The five basic components in order of importance:

• Payment history (35 percent)

• Credit utilization (30 percent)

• Length of credit history (15 percent)

• Credit mix (10 percent)

• New credit (10 percent)

Credit mix

While the car payments aren’t a factor in utilization, they have a direct impact on the credit mix portion of your score. Lenders like to see that borrowers can handle both revolving credit (credit cards, etc.) and installment debt (car notes, mortgages, etc.) on a monthly basis. Once your car notes were paid off, you lost those points. You still have your good payment history on those notes and that history will stay on your credit reports for 10 years. But credit cards alone will not do much for you in the credit mix department.

New credit

Having hard inquiries over the past couple of years could negatively impact your credit score but only in short term. If you have applied for credit that you did not receive that will hurt you since you would not have the new available credit credit to balance out the impact of that inquiry. It is important to have a fairly good idea that you will be accepted for credit before you apply. 

If you have questions or concerns about your credit report use our online form to contact us. We can answer your questions and see if you might have a case. 

Tips for Boosting your Credit Score before Applying for a New Apartment

When getting a new apartment, you are required to do a lot of paper work. Luckily, most apartment applications occur online, especially since the onset of the coronavirus pandemic. Landlords and property management companies will still ask that you provide personal information so that they can conduct a thorough credit and background check. 

Different states, cities, and apartment complexes will have different requirement, but most rental applications will request similar information for each applicant, so that they can verify your identity and your ability to pay rent. This typically includes information such as: personal contact information, social security number, current and previous addresses, employer information with proof of income, emergency contacts, and vehicle information. 

Even though it is all basic information, rental applications can still be extensive. Once everything checks out - meaning you have a clean criminal record, a good rental history with no evictions, and have proof that you can afford your new place - a new home will await for you on the other side. 

To help you obtain a new home here are a few wats you can manage and maintain your credit score to amaze your potential landlord:

Know what is on your credit report ahead of time

It is reassuring to know what your prospective landlord will be seeing when they run a credit check. Before your apartment hunt visit AnnualCreditReport.com and download your free credit report from each of the three main credit bureaus: Experian, Equifax, and TransUnion. You can download your credit report weekly for free through April 2021. (This is typically annually)

Once you download your reports, it is vital that you review them carefully. If you have student loans, or any other credit balances, it should come as a surprise to find them on your report. You will also be able to see your credit score. 

You want to look out for negative marks that you may not have known about. If you see something that is inaccurate or an error, make sure you dispute the errors right away. It is better to send a letter by certified mail rather than using their system so that you have the comfort of knowing a real person is looking into the issue and you can verify that they received the dispute.

Improve Your Credit Score

The best way to prime your credit score, is to first know how it is calculated. The most popular is the FICO score model that looks at five key factors:

• Payment History (35%): Whether you have paid past credit accounts on time. 

• Amounts Owed (30%): The total amount of credit and loans you are using compared to your total credit limit, aka your utilization rate.

• Length of Credit History (15%): The length of time you have had credit. 

• New Credit (10%): How often you apply for an open new accounts. 

• Credit Mix (10%): The variety of credit products you have, including credit cards, installment loans, finance company accounts, mortgage loans, etc. 

To boost your credit score quicker, pay off as much credit card debt as soon as possible without completely draining your cash reserves. Do this more than 30 days before you apply so that your credit score can refresh. 

Finances

You will be asked to provide proof of income when you apply for your new apartment, which is typically your pay stubs and/or tax returns. In addition you should also be prepared to provide statements for both your checking and savings accounts. It is always good to make sure you have proof that you have savings set aside for your security deposit and incidentals like facility fees, parking fees, and maintenance fees. 

 Be Weary of New Credit Inquires

If you can avoid it, don’t apply for any new credit cars, auto loans, or any other kinds of credit products right before you apply. When a lender performs a credit check, it leads to a “hard inquiry” into your credit history. Hard inquiries appear on your credit reports that are pulled by the lender and may results in a temporary decrease in your credit score. While the decrease is usually insignificant, around five points, it can send red flags to the potential landlord. 

Build Up Your Savings

Before moving into your new place, prepare for your increased cost of living. If you have the ability to live rent-free with a family member, take advantage! Every month, or even better, every week, set aside what money you would be spending on rent. After a few months you will build up a nice emergency fund. 

These are just a few helpful tips to get you ready for your move! If you are denied, check over your report for inaccuracies. If you need help, contact us for a free consultation

Employers and Background Check Firms are still targets of FCRA Lawsuits

There is a continuation of class action lawsuits going against employers and background check firms that claim alleged violations of the federal Fair Credit Reporting Act (FCRA) in 2020. This is despite the ruling against Spokeo v. Robins by the Supreme Court that led to some cases being dismissed.

Spokeo, Inc. v. Robins was a United States Supreme Court case decided in May 2016, in which the Court vacated and remanded a ruling by United States Court of Appeals for the Ninth Circuit on the basis that the Ninth Circuit had not properly determined whether the plaintiff has suffered an "injury-in-fact" when analyzing whether he had standing to bring his case in federal court. 

A national policy resource center compiled an examination of 146 successful FCRA class action lawsuits. They found that employers have paid out approximately $174 million over the past decade to settle claims they violated according to the FCRA. According to background check firms that provide background checks about job applicants to employers, reports that employers have paid out another $152 million when sued directly under the FCRA . Class action lawsuits that claim violations of the FCRA, including small technical violations of statute are costing employers big time. 

In just 2018 and 2019, The employers such as: 7-Eleven paid $1.9 million, Delta Air Lines paid $2.3 million, Omincare paid $1.3 million, a subsidiary of PepsiCo paid $1.2 million and Frito-Lay Inc. paid 2.4 million to settle the class action lawsuits over alleged violations of the FCRA. 

Consumer Reporting Agencies (CRAs) such as TransUnion, Equifax, and Experian - who are background check providers - also had to pay out money due to these FCRA lawsuits. A government agency that enforces the FCRA - the Consumer Financial Bureau (CFPB) - required a CRA to pay $8.5 million to resolve an FCRA lawsuit, while a federal judge in Florida approved a $3.6 million settlement in a FCRA class action lawsuit that was filed against another CRA. 

The Supreme Court ruling in May 2016, Spokeo v. Robins, caused some FCRA class action lawsuits to be dismissed or decertified. One example includes a man who filed a lawsuit when he found that a “people search website” obtained inaccurate information about him. Found consumers must prove that there is “an injury in fact” in lawsuits for alleged “bare” violations of federal statures to establish standing under Article III of the United States Constitution. 

In the Spokeo case, the Supreme Courts decision did not allow employers to relax their obligations or ignore the technicalities of the FCRA. Employers must always ensure that they are compliant with the obligations stated by the FCRA and must work with background check providers that understand the FCRA inside and out. 

Employers and CRA’s are encouraged to use Employment Screening Resources (ESR) that offer two complimentary white papers (a government or other authoritative report giving information or proposals on an issue) that include: “Common Ways Prospective or Current Employees Sue Employers Under the FCRA” and “Common Ways Consumer Reporting Agencies are Sued Under the FCRA” These closely examine the many causes that can lead to lawsuits and shows employers and CRA’s that they work with can avoid a costly litigation. 

Covid and Credit Score

Covid-19 has been such a unprecedented event and there is still a lot of work being done to configure how different situations should be treated and reported. 

The Fair Credit Reporting Act (FCRA) is a law enacted in 1970 that gives consumers certain rights when it comes to their credit reports that include the ability for consumers to dispute credit reporting errors. It also requires that furnishers (those that produce credit reports) are reporting accurate and up-to-date information. 

Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) in March 2020. Part of this act ensures that consumers impacted by Covid-19 are still able to receive loan accommodations without having their credit score impacted. This means that when banks and other lenders provide a loan, payment deferrals, and other forms of relief to consumers due to the pandemic, it should not impact their credit score.

Many Americans have been heavily impacted by Covid-19 and have received these types of relief from banks and lenders. While these should not impact credit scores, there are different credit reporting agencies and different credit scoring models. The current challenge is to make sure that loan payment deferrals are being treated consistently. As a consumer, you have the right to view your credit score. Currently, you are able to obtain a free credit report weekly as opposed to yearly. It is important that you check your credit report and score regularly and to make sure to contact the credit reporting agencies if you notice any inaccuracies in your report, especially now if you have received a loan during the pandemic. 

If you feel that your credit report has inaccuracies contact us to take a look and to see if you have a claim. Consultation is free and you may be entitled to a settlement! 

TransUnion is Continuously Sued for Misreporting Consumers as Terrorists

Lawsuits have ensued after TransUnion lost two jury trials for the company’s failure to use adequate identifying information regarding terrorist alerts that are appearing on consumer credit reports.

On August 25th, 2020, A man in Pennsylvania, filed a class action lawsuit against TransUnion in federal court, alleging that the bureau violated the U.S. Fair Credit Reporting Act (FCRA) when it mislabeled him as a terrorist on his credit report. This mislabeling occurred because the man simply had the first name of two individuals on the terrorist watch list. Previously, TransUnion had two other lawsuits concerning the same misreporting that led to punitive damages verdicts, including a record verdict under the FCRA. 

Back in March 2020, the plaintiff in the case, Ahmed Al-Shaikli, was seeking pre-approval for a mortgage. His applications were denied based on information located in his credit report. When Ahmed requested copies of his credit report from the three bureaus, Experian, Equifax, and TransUnion, he noticed that TransUnion contained information that the the other two bureaus did not have. According to his complaint, Ahmeds TransUnion report claimed that his name matched two people on the U.S. Department of the Treasury’s Office of Foreign Assets Control’s (OFAC) list of Specially Designated Nationals (SDNs). 

SDN’s are individuals that are prohibited from business transactions in the United States for national security reasons. In the complaint, the matches were stated to be incorrect. One of the names matched Ahmeds first name, but not his last and the birthdate of this first person was nearly 20 years earlier than that of Ahmed. The second name also matched his first name, and according to the reports from TransUnion, had a birthdate of more than 35 years earlier than his. 

Ahmed is not on the OFAC SDN list nor is he on any other government watch list. He is a lawful United States permanent resident who proudly became a naturalized U.S. citizen, and had also served in the U.S. military as a contractor. 

According to the complaint, Ahmed has reason to believe that TransUnion sold credit reports about him with these false and inaccurate terrorist connections to 11 organizations from February 2019 through April 2020. 

Jim Francis, a partner at Francis Mailman Soulmilas, P.C., who is representing Ahmed in these claims, has stated that: “

Despite TransUnion having Mr. Al-Shaikli's full name, address, social security number, and date of birth, it appears that the company ignored most of that information, and instead associated him with the terrorist watch list because his first name was Ahmed" 

Despite these findings, and TransUnion being hit twice for the same conduct, they still continue to carelessly use the same loose name-matching logic. Ahmed is not the only one to suffer from this similar extreme defamation. 

Ahmeds complaint alleges that TransUnion violated the FCRA by willfully failing to follow reasonable procedures to ensure the maximum possible accuracy of the credit reports it sold. As the lead Plaintiff in the class action, Ahmed seeks to represent all people residing in the U.S. and its Territories about whom TransUnion 

Mr. Al-Shaikli's complaint alleges that TransUnion violated the FCRA by willfully failing to follow reasonable procedures to assure the maximum possible accuracy of the credit reports it sold. As the lead plaintiff in the class action, Mr. Al-Shaikli seeks to represent: 1.) All people residing in the U.S. and its Territories about whom TransUnion prepared a credit report that included any OFAC record beginning five years prior to the filing of the lawsuit; 2.) the members of the first group whose TransUnion reports claimed they matched a person on the OFAC SDN list but that match was not a character-for-character match to their first and last names; and 3.) the members of the first group whose TransUnion reports claimed they matched a person on the OFAC SDN list but that person had a different year of birth than they did.

A mixed file, even if not to these extreme is a major violation and can cause punitive damages to a consumer. If you feel you have a mixed file, contact us for help. You could be entitled to a settlement.

Plaintiff Brings Claim Against Employer

A Plaintiff by the name Gennaro Mattiaccio II was terminated by Defendant DHA Group for alleged misconduct. On July 21st, 2020, The United States District Court, District of Columbia issued an opinion in Matticcio v. DHA Group., Inc. that said the Plaintiff had standing to pursue claims of Fair Credit Reporting Act (FCRA) violations against his former employee. The DHA Group used a background check that was used to justify Plaintiff Maticcio’s termination from work.

Mattiaccio II claims that these background checks were retaliation for a complaint he had filed against DHA Group. Typically, pre- and post- employment background checks that investigate employee misconduct are exempt from the FCRA.

Mattiaccio II brought two FCRA claims: Defendant lacked proper authorization to perform the background checks, since they were not clearly formatted and Plaintiff did not authorize a post-employment background check and was given neither a summary of rights or an opportunity to review his report before his termination. 

District Judge Colleen Kollar-Kotelly wrote an opinion that has been cause of the latest decision in almost a decade-long dispute between the two parties. Judge Koller-Kotelly granted in part and denied in part the Defendant’s Motion for Summary Judgement for lack of standing under Article III of the U.S. Constitution.
She states that the Plaintiff has a standing on claims that he did not authorize the post-employment background check but he cannot bring in the claim that he did not authorize the pre-employment background check. She states that he also has a claim that he was not provided a copy of the report or his summary of rights before the adverse action was taken against him. The case has now been taken to court. 

The FCRA promotes the accuracy, fairness, and privacy of consumer information contained in the files of Consumer Reporting Agencies (CRA’s), protects consumers from the willful and/or negligent inclusion of inaccurate information in their consumer reports, including consumer credit information. 

Employment Screening Resources (ESR) wants to remind us that allegations made in a lawsuit are not proof that a business or individual violated any law, rule, or regulation. The allegations written in this blog are not factual at this current time. 

If you feel that your employer has put a violation wrongfully against you, contact us to take a look at your case and we will provide you with information and let you know if you have a claim. 

Keeping Good Financial Health

The most important financial document you can have is your credit report.  It is used by lenders to determine if you qualify for a loan, insurance, renting a property, and it may even be checked when you apply for a new job. 

Information contained in your credit report is used to calculate your credit score. To maintain and/or increase your credit score, you have to check that the information that the credit bureaus are collecting are is accurate and the activity is remaining positive. 

Keeping your credit score up comes from :

• Paying bills on time

• Not opening too many credit accounts

• Keeping your credit card balance below 30% 

Even government-regulated agencies such as Transunion, Equifax, and Experian can make mistakes. The Federal Trade Commission reported that 1 in 5 people had an error in their credit report in 2012.

How does this happen?

It could be that a lender had sent the credit bureaus the inaccurate information. This includes information about your transaction history, or you could have a mixed file with someone who shares a similar name and social security number. An error could also be a sign of identity theft. 

The only person who is keeping tabs on your credit report for accuracy is you. We recommend that you check your credit report at least once a year. You are allowed to request an annual free credit report at annualcreditreport.com. Since the Covid pandemic consumers are able to view their credit report once a week for free. Everyone should take advantage of this service, especially at this time where finances are are difficult. 

Lenders are not required to report to every company, so the information you find on a Transunion may report differently than on Experian and Equifax.  

The specific details in each credit report may be different, but they all follow a similar structure. It is important to check the personal information of your credit report carefully:

• Current and former names

• Current and former addresses

• Birthdate

• Social security number

• Phone numbers

• Spouse or co-applicants

• Current and former employers

Errors in this section could indicate a mixed file or a stolen identity. If you find an error it is important to dispute the wrong information immediately.

Your credit report contains a section for “Soft” and “Hard” inquiries. Soft inquires are requests made by outside parties, such as lenders who want to offer you unsolicited credit. They request your information to see your credit worthiness. These do not affect your score. Hard inquiries will affect your score. These are made by lenders when you apply for credit, employment, insurance, etc. You have to authorize the hard inquiry when you apply.

If you have debt related mistakes, it is important to contact the lender first and clearly explain the error that was made. They will likely fix the error without protest, especially if you have been a good customer. They are required to alert the bureaus of the mistake, but you should also file a dispute to the bureaus to make sure the communication was successful. 

When communicating with the credit bureaus about an error in your report, it is important to collect any and all documentation that supports your claim. This could be bank statements, bills, contracts, legal documents, and emails. An effective way to dispute is to write a letter to the bureau as opposed to disputing online, so that a real person must look over your information. In the letter you should clearly outline the error(s) and explain the steps you have already taken to fix it. When finished, send the letter along with copies of your documents to the bureaus using certified mail. It is important to keep track of all communication. 

If you need help with anything related to your credit report, use our contact form to send us an inquiry. We will get back to you within 24 hours! 

Artificial Intelligence for Consumer Protection

The Consumer Financial Protection Bureau (CFPB) is currently monitoring the innovation of Artificial Intelligence (AI), and more precisely the subset of Machine Learning (ML) as part of their mission of consumer protection. The CFPB was tasked by congress to ensure that markets for consumer financial products and services are operating transparently and efficiently. 

Financial institutions have already started to instill the use of AI in a range of functions such as virtual assistants that take customer requests, detecting fraud as well as other illegal activity, and compliance monitoring tools. 

AI has the potential to use traditional underwriting techniques that could enable lenders to evaluate the creditworthiness of millions of consumers who are considered to be “unscorable”. It is said that 1 in 10 adults in the United States are considered credit invisible due to not having a credit record at the nation wide bureaus. Around 19 million other consumers have too little information to be evaluated by the widely used credit monitoring model. This technology would involve models that would allow the lenders to evaluate more information about credit applicants which could lead to more efficient credit decisions and the potential to lower the cost of credit. 

On the downside, AI could potentially amplify risks that include unlawful discrimination and privacy concerns.  The bias in the model could also lead to inaccurate predictions. An important issue to note is how the AI models will address the adverse action notice requirements in the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act (FCRA). The FCRA requires that the creditors provide the consumers with the main reasons for their credit denial and other adverse actions. Questions of concern will arise concerning how these institutions will comply with the requirements when they are basing their information on complex interrelationships driven by the AI. 

Hopefully financial institutions ponder how to most effectively take advantage of the AI’s potential benefits. It would be a good use of time for them to explore ways to engage with consumers with features that would allow access to educational components and sharing information with consumers on how the underwriting decisions are made and what data/factors are used. 

Promising technology could allow for a better overall experience that would benefit the consumers. 

If you are seeing inaccuracies on your credit report, fill out our form to get your questions answered. We are leading experts in the field and can help you get your credit and life back on track. 

Protecting Your Credit Score Act

On June 29th, 2020, the Protecting Your Credit Score Act (H.R. 5332) was passed by the United States House of Representatives. This act will amend the federal FCRA to guarantee that consumer reporting agencies, such as Transunion, Experian, and Equifax, are giving fair and accurate information in consumer reports. The act will be making changes to strengthen the rights of consumers and increase the consumer data protection guidelines that reporting agencies must follow. This will increase the accountability of the agencies. 

A study of the Frederal Trade Commission shows that approximately 21% of consumers had errors in their credit reports, 13% of those errors affected the consumers credit score, and 5% had errors that were serious enough to cause a credit denial. For the consumer, fixing this errors can be complicated and a full blown nightmare. The reporting agencies favor the side of the creditor and/or debt collector. 

This new act takes a number of steps that will make it easier for consumers to fix the credit errors. It will also be easier to force the credit bureaus to reinvestigate the errors and fix the mistakes. 

A few notes from the act include: 

• Establishing an online consumer portal landing page

  • This is a single online consumer portal that has free and unlimited access to their reports and credit scores. 

• It will increase credit report accuracy and transparency. 

  • This will require Experian, Equifax, and Transunion to conduct preventative audits by matching ALL digits of the consumers social security number or the full legal name, date of birth, current address, and one previous address. The credit bureaus are known for only matching 7 of the 9 digits of the consumers social security number, which often results in a case of a mixed file. 

• It establishes a CFPB ombudsperson, or a public advocate to resolve these common errors made by reporting agencies. 

Be sure to check your credit report frequently. Many people do not realize that they have an error in their credit report until they are trying to apply for credit. This can effect your ability to get a credit card, get a loan, buy a car, a home, and more. 

If you have errors in your credit report, contact us for help. We can give you step by step guidance and let you know if you have a case! 

Protect Your Credit Score Act