|Received:||5/22/2006 3:25:40 PM|
|Subject:||Procedures to Enhance the Accuracy and Integrity of Information Furnished to Consumer Reporting Agencies|
|Title:||Advance Notice of Proposed Rulemaking|
|CFR Citation:||16 CFR Parts 660 and 661|
Comments:A1: (Types of errors, omissions, or other problems that may impair the accuracy and integrity of information furnished to consumer reporting agencies.) --------------------- Errors: Date of Last Activity on closed, charged-off accounts is often updated when other inaccuracies in the accounts are disputed, making it appear that the accounts have been used more recently than they were and negatively impacting credit scores with this false information. --------------------- Omissions: Credit Limit is frequently NOT reported (or reported as $0) by some companies making it appear that the consumer has no available revolving credit. Besides being false on its face, this can have a devastating impact on the consumer's credit score by causing the scoring model to interpret the consumer to have no available revolving credit, or less-than-actual available. --------------------- A2: (re the sale of consumer debts to and among collection agencies) Third party collection agencies are frequently characterizing charged-off open-ended consumer credit as "Factoring Company Accounts" as well as “Past Due 120 days”, creating the false impression that these are open, late accounts of a completely different character and legal status. Collection agencies should only report as collection accounts, not as “Factoring Company Accounts” and not as “Open” type or “Revolving Credit” accounts either – another common problem. --------------------- Collection agencies are also falsely reporting “Unable to locate consumer” when consumers dispute other inaccurate information or request validation, apparently in order to cause more damage to credit scores as punishment for disputing or requesting validation of claims. --------------------- Additionally, I recently had a debt collector “suppress” disputed accounts from view in my credit file until after the disputing timeframe was passed. It appeared from my point of view as if the account had been deleted. In fact, it remained in my file but was not investigated when I disputed. The CRA claims they don’t have to reinvestigate “suppressed” accounts when they receive a consumer dispute. The debt collector was thus able to circumvent the dispute process and later reappeared to report more inaccurate information without providing the validation requested or directly responding to my dispute either. --------------------- A3: (Business, economic or other reasons for patterns and practices described in A2) The false and misleading reporting described above appears to be designed to inflict far greater damage to a consumer’s credit report and score than correct and accurate reporting would. A collection agency representative once bragged to me that they could and would report false information in order to destroy my chances of getting new credit and possibly cause universal default rates on existing credit if I continued to dispute and demand validation of debt instead of paying them immediately and unchallenged. It was pure extortion – and on a debt that had already been paid.