New Rule Protects Federal Benefit Checks from Seizure by Creditors

A new federal rule effective May 1, 2011, vastly strengthens protections for Social Security, SSI, VA, federal retirement checks, and certain other federal benefits from seizure by creditors. Heretofore, in theory such benefits were protected, but not in practice. Under the current rules, creditors could seize the consumer’s bank funds and it was up to the consumer to hire an attorney to challenge the seizure or garnishment. Needless to say, hardly any consumer successfully challenged the seizures leaving many consumers unable to pay the rent. The new rule requires all banks and credit unions to determine whether exempt federal benefits...

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Case before US Supreme Court May Decide Fate of Consumer Class Actions

In November of this year, the US Supreme Court hear arguments in AT&T Mobility v. Concepcion, a case that could decide the fate of consumer and employee class actions for years to come. The case involves the widespread practice of using standard-form contracts to ban class actions. Courts in California and other states have held that class-action bans are unenforceable, however AT&T Mobility has asked the Supreme Court to find that state laws are preempted by the Federal Arbitration Act.. The problem is that class-action bans are often disastrous for consumers and employees. Class-action bans in consumer contracts prevent consumers...

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New Edition of Credit Scores & Credit Reports

Evan Hendricks is a leading expert on credit scores and credit reports. His book, aptly named Credit Scores & Credit Reports, How the System Really Works, What You Can Do, 3d Edition, is now available in paperback on Amazon. Anyone interested in how the credit bureaus operate should read this book. Hendricks covers credit scoring, obtaining your credit report, disputing errors, identity theft, mixed files, reinvestigations, so-called credit repair, debt collection, and other topics.

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Prof. Elizabeth Warren Talks About Credit Reporting on NPR’s Fresh Air

Last week, Prof. Elizabeth Warren talked about credit reporting on the NPR program Fresh Air with Terry Gross. Ms. Gross’ husband had to hire an attorney to convince the credit bureaus that someone else’s bad debts listed on his reports did not belong to him. In response to Ms. Gross’ questions how the inaccuracies occur and why it is so hard to correct them, Prof. Warren said the credit system is “noisy” with, for example, data associated with social security numbers one digit off being attributed to the wrong person. She said the problem is the credit industry has no...

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Credit Bureaus Sell Consumers’ Data

Consumers might assume that Experian, Trans Union and Equifax restrict the the information they collect to creditors to whom consumers have applied for credit. On the contrary, the credit bureaus sell personal and financial information to various companies. The credit bureaus were recently criticized by the national mortgage brokers’ association for selling “trigger lists” containing personal and financial information on prospective borrowers to sub-prime real estate lenders. Introduced in 2005 by Experian, a basic trigger list includes the names and contact information of people who recently applied for a mortgage. A more complete list includes credit scores, credit card debt...

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