Inaccurate Credit Reporting on Mortgages Hurting Consumers

Banks and their mortgage loan servicing companies are increasingly reporting consumers late on mortgages when they were not late and even when the mortgages were paid in full. Reuters reports on these inexcusable practices causing consumers no end of financial problems. Homeowners are finding that mortgages they thought were dead and buried are springing back to life. Sometimes, the end result is a foreclosure. “It’s the most egregious manifestation of an industry that’s seriously broken,” said Ira Rheingold, director of the National Association of Consumer Advocates. An attorney with the National Consumer Law Center has seen hundreds of foreclosure cases...

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Credit Bureaus Give V.I.P.’s Get Special Treatment

Experian, Equifax and Trans Union maintain lists of V.I.P.’s like politicians, judges and other influential people who get special help from employees here in the U.S. in fixing mistakes on their credit reports. Everyone else is herded into a largely automated system under which an employee spends about two minutes reading the dispute after which the dispute is categorized using a two or three digit code. The coded dispute is sent to the source of the inaccuracy, which may be a credit card company or debt collector. A front page story by Tara Siegel Bernard in today’s NY Times contrasts...

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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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Debt Settlement Industry Rips Off Consumers

Some 250 “debt settlement companies” pray on consumers who are overwhelmed by debts. Consumers are lured by Internet and TV ads promising consumers their debt problems will cease if they just sign up. Typically, the companies require the consumer to make payments to the company while not making payments on their debts. The companies promise that once a pot of money accumulates in the consumer’s account, the company will settle the debts with the creditors by paying a percentage of the debt. In their sales pitches, the companies omit over the fact that they deduct outrageously high fees, that the...

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New Report on Credit Bureaus’ Electronic Dispute System & How it Frustrates Consumers

Inaccuracies plague the credit reporting system. The FCRA established a process to enable consumers to dispute the inaccuracies and force the credit bureaus and companies that provide the data to investigate the disputes and make corrections. A new report from the National Consumer Law Center shows that the system is a travesty. The three major credit bureaus conduct investigations in a perfunctory manner. The bureaus translate consumers’ detailed dispute letters into two or three digit codes and send the codes to the companies that furnished the information. The bureaus fail to send supporting documentation to the companies in violation of...

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