Fraud Alerts on Credit Reports Cause Hardship for Many Consumers and Military Personnel

(LITIGATION NEWS) December 23, 2005 –- Consumer litigant and credit consultant Christine Baker receives many complaints about credit reporting agencies (CRAs) refusing to provide credit reports and refusing to investigate disputes from clients as well as readers of her blog at http://creditsuit.org/ and forum at http://fight-back.us/forum/

The Fair and Accurate Credit Transactions Act (FACT Act) became law in December 2003 and allows consumers to add a Fraud Alert to credit reports if they were subjected to identity theft.

Fraud Alerts notify potential creditors that the applicants are at high risk of fraud and often creditors decline applications rather than to take that risk or to pay employees to ensure that the applications are genuine.

Another unexpected side effect of Fraud Alerts is that consumers often can no longer get their own credit reports and their credit disputes may be refused. Often the CRAs demand that consumers send documentation by mail, with no alternatives to quickly and easily verify their identities by telephone, fax or e-mail. Details are at http://mylitigation.net/pr/news/release/fraud_alerts_on_trans_union_credit_report_cause_hardship/

For the men and women in the military it is even more difficult to get their own credit reports and sometimes it is impossible when serving overseas. How can a CRA demand that a soldier in Iraq mail utility bills or rent receipts? The CRAs’ toll-free numbers do not work outside the US and the military postal service is extremely unreliable.

Why subject yourself to ID theft by putting all your identifying data in the mail? Stolen mail is a primary source of personal and financial data for ID thieves.

A client had mailed disputes to the CRAs from an overseas base and all three mailings were lost. Two CRAs received the subsequent Express mailings after over a week and one delivery took several weeks and the fax number they had eventually provided was always busy.

Ms. Baker did not receive a response to her 11/30/05 Open Letter posted at http://mylitigation.net/pr/news/release/trans_union_fraudulent_fraud_alerts_and_refusal_to_provide_telephone_help/

“… Rather than supporting the troops, TU ensures that those willing to die in Iraq or Afghanistan have the worst credit, pay the highest interest rates and have the fewest opportunities to get corrections.”

The FACT Act also requires CRAs to provide free annual credit reports, but the free reports at https://www.annualcreditreport.com/ are frequently declined. When consumers then pay for the reports, they are often readily available.

Ms. Baker has been demanding a user changeable PIN for her credit reports for years. Almost all ID theft problems related to fraudulent accounts would be prevented if consumers could limit access to their credit reports to creditors with their PIN. The CRAs refuse to implement this incredibly simple solution.

Who would do business with a bank that refuses to provide a PIN to secure access?

When it comes to credit reporting, consumers have no choice which credit bureau to do business with as the personal and financial data is collected and sold without their permission.

In Ms. Baker’s experience, Fraud Alerts do more harm than good and should only be requested when absolutely necessary and when consumers are certain that they don’t need credit reports and credit, housing, bank accounts, cell phones, utilities, etc.

According to the FACT Act, the Fraud Alerts are supposed to be deleted after 3 months. However, CRAs also deny reports due to much older Fraud Alerts and in some cases the consumers never requested that a Fraud Alert be added and often CRAs refuse disputes even when no Fraud Alert is reported.

In 2001, Ms. Baker sued Trans Union in Kingman, AZ, Small Claims Court, case # 2001 CV 1751 UN, after it responded to her disputes with a form letter:

“To assist in our investigation, please forward a copy of your driver’s license and social security card to our office at the address located above.”

Ms. Baker alleged that Trans Union had no right to refuse the credit disputes. The filings, correspondence and confidential settlement agreement are posted at http://creditcourt.com/tu/filelist.shtml

On 3/19/03, Ms. Baker filed suit against credit bureau Experian in Phoenix federal court, case # CV-03-525. Recently Fair Isaac declined her order of the Experian report with the FICO score due to a Fraud Alert. Experian’s attorney Scott Kirkner with Jones Day alleged that the Fraud Alert was added by credit bureau Equifax.

The FACT Act requires CRAs to notify the other bureaus after a consumer added a fraud alert. However, Ms. Baker does not wish to be portrayed as a high fraud risk to creditors and she never requested a fraud alert with any credit bureau.

Equifax is a defendant in Ms. Baker’s 6/10/04 suit, Phoenix federal court case # CIV-04-1192. Equifax attorney Lewis Perling denied that Equifax added the Fraud Alert to her Experian report.

As both cases are now in the discovery stage, Ms. Baker hopes to find out how entirely fraudulent fraud alerts get on consumer credit reports and she will post updates at her blog http://creditsuit.org

The blocking of reports for consumers who filed suit against CRAs was litigated in Spector v. Equifax Info Servs, 338 F. Supp. 2d 378 (D. Conn. 2004). The court denied the Equifax motion for summary judgment as a jury might find that Equifax is liable for punitive damages. http://fight-back.us/forum/index.php?showtopic=1025

When consumers can’t get their credit reports, they won’t know what to dispute.

Having reviewed thousands of credit reports, Ms. Baker is certain that CRAs did not implement any computerized procedures to ensure accuracy and completeness. She sees balances higher than the highest amount owed, missing credit limits, accounts opened AFTER they were closed, undated late payments and other obviously incorrect data on just about every report.

More information about credit reporting, litigation and FICO credit scores can be found at http://fight-back.us/forum/ and http://creditfactors.com/

###