Equifax based in Georgia; Georgian Congressman seeks to gut FCRA. Coincidence? I think not!

Equifax is based in Atlanta, Georgia.  Three guesses which state's congressman proposed HR 2359, i.e. the Kill the FCRA bill.  Yep, that's right, Congressman Loudermilk of Georgia.  I wonder who put him up to it?

Representative Loudermilk is now being called on to withdraw his Equifax protecting bill by the National Association of Consumer Advocates (of which I am a proud member) and The Georgia Watch.  Their press release reads:

"NACA, Georgia Watch Call on Rep. Loudermilk of Georgia to Withdraw His Bill That Favors Equifax, Credit Bureaus Over Harmed Consumers

In light of the astonishing announcement of credit reporting agency Equifax’s security breach which impacts the personal information of more than 140 million consumers, National Association of Consumer Advocates and Georgia Watch call on Rep. Barry Loudermilk (R-Ga.) to withdraw his legislation, H.R. 2359, that would drastically reduce remedies for consumers who are victims of credit reporting abuses.

On the same day that Equifax announced the massive data breach, a subcommittee of the U.S. House Financial Services Committee held a hearing to consider legislation, including Loudermilk’s bill that would amend the federal Fair Credit Reporting Act to essentially shield credit reporting agencies from full accountability for willful and reckless conduct that upends individuals’ employment and financial lives.

Specifically, the “FCRA Liability Harmonization Act” would eliminate punitive damages, a tool used to punish the worst actors, and would impose an arbitrary $500,000 limit on statutory and actual damages in class actions. These illogical blocks on consumer remedies would obstruct individuals’ legal rights.

“Instead of running to Congress to seek a “get out of jail free” card to avoid accountability for its reckless handling of consumers’ personal and financial information, Equifax and its counterparts in the credit reporting industry should focus on protecting information from identity thieves,” said Christine Hines, legislative director at National Association of Consumer Advocates (NACA).

At Thursday’s hearing, witnesses for the credit reporting industry claimed that their violations of federal protections were merely technical and do not harm anyone despite evidence that consumers have been blocked from accessing credit, housing, and jobs due to industry’s irresponsible handling of consumer information. Industry representatives also used the hearing to bash a rule issued by the Consumer Financial Protection Bureau that would restore consumers’ ability to band together in class actions when harmed by unlawful financial industry practices.

Currently Equifax is rightly being criticized for its handling of the massive data breach. One of many of its missteps – it has inserted forced arbitration clauses in the terms and conditions of various credit monitoring services that it is encouraging affected consumers to enroll in.

“Equifax’s use of forced arbitration clauses and class action bans means that consumers cannot band together in court to seek remedies against it,” said Liz Coyle, executive director of Georgia Watch.  “This is unacceptable and will have disastrous effects on the marketplace.”

NACA and Georgia Watch insist that Rep. Loudermilk withdraw his bill and support consumers’ right to hold bad actors like Equifax fully accountable through the justice system."

Congressional Committee to hold Hearing Regarding Equifax Data Breach

Yesterday, the House Financial Services Committee held a hearing on a bill that would gut the protections of the Fair Credit Reporting Act, which is the only law protecting Americans from the ridiculously inept consumer reporting agencies such as Equifax.

Today, the public learned of a massive data breach of Equifax's treasure trove of secret information regarding consumers, including the full names, Social Security numbers, dates of birth and addresses of approximately 143 Americans.

Now, the House Financial Services Committee released the following press release:

"WASHINGTON – House Financial Services Committee Chairman Jeb Hensarling (R-TX) said his committee will hold a hearing on the Equifax data breach that has potentially compromised the personal information of roughly 143 million Americans.

“This is obviously a very serious and very troubling situation and our committee has already begun preparations for a hearing.  Large-scale security breaches are becoming all too common.  Every breach leaves consumers exposed and vulnerable to identity theft, fraud and a host of other crimes, and they deserve answers,” said Chairman Hensarling.

A date for the hearing will be announced at a later time."

Chairman Hensarling, if you want to protect Americans from data breaches and the damage caused by identity theft, your first step should be to kill HR 2359.  Only the Fair Credit Reporting Act stands in the way of Equifax and the other credit bureaus harming Americans by willfully and knowingly reporting erroneous information on Americans' credit reports.  That is the "answer" you seek.  Have you hearing, but start with killing HR 2359 and let the Fair Credit Reporting Act continue to protect Americans.

Equifax's data breach just keeps getting worse!

As if it is not bad enough that Equifax exposed 143 million Americans to the hellacious ordeal of identity theft, now its becoming crystal clear just how inept their response to the data breach was.

For instance, the website ARS Technica (www.arstechnica.com) reported the following:

"What's more, the website www.equifaxsecurity2017.com/, which Equifax created to notify people of the breach, is highly problematic for a variety of reasons. It runs on a stock installation WordPress, a content management system that doesn't provide the enterprise-grade security required for a site that asks people to provide their last name and all but three digits of their Social Security number. The TLS certificate doesn't perform proper revocation checks. Worse still, the domain name isn't registered to Equifax, and its format looks like precisely the kind of thing a criminal operation might use to steal people's details. It's no surprise that Cisco-owned Open DNS was blocking access to the site and warning it was a suspected phishing threat.

Another indications of sloppiness: a username for administering the site has been left in a page that was hosted here. ... That by itself wouldn't allow for unauthorized access, but it's still something that should never have happened.

Meanwhile, in the hours immediately following the breach disclosure, the main Equifax website was displaying debug codes, which for security reasons, is something that should never happen on any production server, especially one that is a server or two away from so much sensitive data. A mistake this serious does little to instill confidence company engineers have hardened the site against future devastating attacks."

So Equifax's attempt to "fix" the damage done by its data breach doesn't just take away the rights of consumers to get justice for the damage caused by Equifax's negligence, it now opens those victims up to more potential privacy problems by using a website with obvious security holes to collect the names and Social Security numbers of the victims.  Sheeeeesh!

Equifax's unwillingness to investigate consumer disputes properly is starting to look like the lesser of their sins.

NCLC's statement regarding the Equifax data breach

Below is a statement from the National Consumer Law Center regarding the Equifax data breach. NCLC fights for the rights of you, the consumer, every day, even though you probably didn't know it and, for a large segment of America, vote for the very politicians that are doing their best to strip you of your rights and protect the big businesses that trample your rights every day.

Statement of National Consumer Law Center Staff Attorney Chi Chi Wu on the Equifax Data Breach that Affected 143 Million Consumers

The massive Equifax data breach is one of the largest in our country’s history, affecting half of the United States population and nearly three-quarters of consumers with credit reports. Chances are, this affects YOU. Plus, the stolen information is the mother lode of sensitive personal data that can be used for identity theft: Social Security numbers, dates of birth, and in some cases, driver’s license numbers. Also, was highly revealing credit reporting account information stolen, such as student loan or mortgage payment account numbers and payment histories? This information could be used for phishing schemes or other fraud.

Equifax should immediately pay or reimburse fees for security freezes to affected consumers at all three of the major credit bureaus, i.e. Experian and TransUnion in addition to Equifax. A security freeze is the most effective measure against “new account” identity theft, because it stops thieves from using the consumer’s stolen information. Equifax is offering one year of its credit monitoring and identity theft prevention product in response to the security breach, which it states includes “the ability to lock and unlock Equifax credit reports.” That is a first step, as the ability to lock Equifax reports is better than credit monitoring alone. Credit monitoring only informs consumers after the fact when there has been an attempt to open a fraudulent new account using the consumer’s personal information. However, consumers need the ability to “lock down” or freeze their credit reports at all three major credit bureaus, and for more than one year, because the stolen information could still be used to fraudulently apply for credit using a report from Experian or TransUnion as well.

Equifax should immediately remove the forced arbitration clause and class action ban from the Terms of Use for its website and any credit monitoring or identity theft prevention services it offers. The arbitration clause does give consumers the ability to opt out of forced arbitration by notifying Equifax in writing within 30 days, which consumers should do.  However, most consumers will not see that fine print and will be forced to give up their access to the courts. Through those terms, Equifax is purporting to prevent affected customers from access to the courts or the right to join together with the other hundreds of millions of injured consumers to jointly pursue claims against Equifax. A new rule by the Consumer Financial Protection Bureau would bar such forced arbitration clauses with class action bans, but members of Congress have threatened to block the rule.

Consumers affected by the breach should not wait to see if Equifax will pay for freezes at the other two credit bureaus; they should get freezes immediately if they are worried about identity theft. If consumers do not want to get a freeze, there is also the option of putting a 90-day “initial fraud alert” in their credit report that tells businesses they should verify your identity before they issue credit. The initial fraud alert must be renewed every 90 days.

Another risk of this massive data breach is tax identity theft, where crooks file phony tax returns in the consumers’ name. The Internal Revenue Service (IRS) had previously made available Identify Theft PINs for consumers in Florida, Georgia, and the District of Columbia, and consumers in those states should consider getting the pin (which they should do before getting a freeze). The IRS should make Identity Theft PINS available to all affected breach victims.

It’s ironic that, on the same day that Equifax announced this data breach, Congress was considering a bill that would dramatic reduce the consequences of violating the Fair Credit Reporting Act (FCRA) for the credit bureaus and other industry players. H.R. 2359, the so-called FCRA Liability Harmonization Act, was just heard yesterday by the House Financial Services Committee and would eliminate punitive damages plus limit class action damages under the FCRA. While the FCRA may or may not be directly implicated by the Equifax data breach, we need stronger, not weaker, consequences when companies violate long-standing privacy laws, such as the FCRA. Credit bureaus, such as Equifax, should not be rewarded with reductions in legal accountability given these recent events

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Since 1969, the nonprofit National Consumer Law Center® (NCLC®) has used its expertise in consumer law and energy policy to work for consumer justice and economic security for low-income and other disadvantaged people, including older adults, in the United States. NCLC’s expertise includes policy analysis and advocacy; consumer law and energy publications; litigation; expert witness services, and training and advice for advocates. NCLC works with nonprofit and legal services organizations, private attorneys, policymakers, and federal and state government and courts across the nation to stop exploitative practices, help financially stressed families build and retain wealth, and advance economic fairness.

Equifax Data Breach Puts 143 Million Consumers at Risk

On July 29 (yes, nearly two months ago), Equifax discovered that it had suffered a data breach between mid-May and July.  The massive data breach exposed the personal identifiers of approximately 143 million Americans.  That means approximately half of the population of the United States just became even more likely to have their identities stolen.

The information that Equifax allowed to be stolen is the holy grail for identity thieves.  The names, Social Security numbers, dates of birth, addresses and, in some cases, driver's license numbers of 143 million Americans were pilfered from Equifax.  Even worse, Equifax sat on this information for nearly two months before alerting the public of Equifax's malfeasance putting them at risk.

Equifax is one of the last companies that should allow something like this to happen.  Equifax chose to enter the business of collected and disseminating the most private of information on nearly all Americans.  Equifax's credit reports are used nationwide for obtaining home loans, car loans, credit cards, bank loans and lines of credit.

Equifax's credit reports are used by many employers to decide whether to hire someone, particularly if there is any responsibility for financial accounts involved in the job description.

Equifax's credit reports are used by government agencies to determine whether you can have or keep a security clearance.  I have had many clients lose their security clearances (and thus their jobs) due to Equifax reporting erroneous information about them and the willfully refusing to correct the errors.

Equifax's credit reports are used by insurance companies to determine if you qualify for car insurance and homeowner's insurance.  And, if you do qualify, you may find that your premiums are higher because of the contents of your Equifax credit report.

Now, all of that uber sensitive information entrusted to Equifax (not that the consumer is given an option) has been exposed to identity thieves and hackers and is no doubt going to be sold on the dark web and used to victimize consumers across the country.

But what is even worse than Equifax allowing this tragedy to happen and then keeping its misdeeds secret for nearly two months?  Now, Equifax is offering free identity theft protection and credit monitoring to the victims of its data breach.  Sounds good, right?  Wrong!  Included in the sign up for that "free" identity theft protection are arbitration clauses that take away your rights to sue Equifax for the damage its data breach causes you.

When my wife woke me up this morning at 2:00 a.m. when she read about the Equifax data breach and then told me that Equifax was offering free credit monitoring and identity theft protection, I mumbled in my half awake state "do not sign up for it, they'll  have something bad in the fine print". How did I know this?  Well, for one, I have been suing Equifax for consumers they have wronged for nearly 18 years now.  Second, Equifax has done this type stuff before.  For instance, consumers are entitled under the Fair Credit Reporting Act to one free credit report per year.  But Equifax thought it right to make consumers agree to give up their right to a lawsuit to be able to exercise their right to a free credit report.  So Equifax stuck some arbitration language in the fine print of anyone accessing their free credit report online.  I warned you about this all the way back in 2009 - fcralawyer.blogspot.com/2009/05/truly-free-credit-report.html.  So it was no surprise that they would pull something like this again, especially since they are the root cause of the problem this time.

So, if Equifax's data breach causes your identity to be stolen which then causes your life to become a financial hell when your legitimate credit cards get closed, you lose your job and your home and auto insurance and then, due to the stress of it all, your health goes kaput, Equifax skates by free and clear because your only option is to bring an arbitration proceeding to be decided by Equifax's arbiter. Talking about heaping injustice on top of tragedy!

So, whatever you do, do not sign up for Equifax's "free" monitoring or identity theft protection.  To do so will cause irreparable harm to any potential lawsuit you may have if, God forbid, Equifax's data breach leads to theft of your identity.  And, if you do become the victim of identity theft, contact the Kittell Law Firm at 662-298-3456 or at ckittell@kittell-law.com.  I will sue Equifax in any jurisdiction in the United States for any victim of identity theft whose credit report is damaged as a result of Equifax's data breach provided that you have not agreed to throw your rights away by falling for Equifax's trap of "free" credit monitoring.

Equifax Continues to Profit from Identity Theft

Equifax has purchased identity theft protection company ID Watchdog for approximately $63 million.  ID Watchdog is a company similar to LifeLock that consumers and/or businesses pay to monitor their credit and "protect" them from identity theft.

Once again, Equifax is turning identity theft into a profit center for its bottom line.

Equifax is charged by the Fair Credit Reporting Act to perform reasonable investigations of disputes made to it by consumers regarding inaccuracies on their Equifax credit reports.  Many times these errors are actually credit cards, car loans or mortgages opened fraudulently as a result of the theft of the consumer's identity.  Sometimes they are collection accounts placed on the consumer's credit report for the purpose of collecting a debt that was fraudulently incurred by the identity thief in the consumer's name.

Unfortunately for the victims of identity theft, Equifax often does not properly investigate the disputes it receives, particularly those resulting from identity theft.  Instead of investing in its investigation department to make it better and thereby possibly comply with the Fair Credit Reporting Act and eliminate a lot of the problems caused by identity theft, Equifax instead turns identity theft into a means to profit by investing in a company that sells identity theft protection.

If Equifax consistently did the job that it is required by the Fair Credit Reporting Act to do and actually investigate the disputes it receives, consumers would not need to pay for additional identity theft protection or pay for multiple credit reports per year or monitoring services to monitor their credit.  But instead of doing what it is required to do, Equifax instead chooses to profit from the misery of identity theft victims.

Equifax makes millions each year from the sale of credit monitoring services and the sale of extra credit reports to consumers worried about the contents of their credit report because their identities have been stolen.  A quick glance at Equifax's website makes it clear that Equifax's emphasis is on profiting from credit monitoring rather than properly investigating consumer disputes.  Equifax sells no less than 5 different plans to "monitor" and "protect" the contents of your credit report.  They give these plans catchy names like Premier Plans, Advantage Plans, Family Plans, Patrol and even Patrol Premier, but they all have the same goal, to play on consumers' fear of identity theft to line Equifax's pockets.

The purchase of ID Watchdog provides Equifax with another mechanism to use to prey on consumers' fears.  Instead of fixing the problem by deleting fraudulent accounts when disputed, Equifax wants consumers scared so they will buy more credit reports and purchase more monitoring plans.  Not that Equifax is likely to delete any fraud accounts found by the consumers using Equifax's monitoring products.

Equifax needs to be held accountable for its decision to put its profits over the well being of consumers.  The government has put in place the mechanism to hold Equifax accountable when it passed the Fair Credit Reporting Act.  Now it is up to juries and judges to show Equifax and the other credit bureaus that putting profits over people will not be tolerated.

When to Check Your Child's Credit Report

When will your child have a credit report?  When should you check?  When should you be worried that your child does have a credit report or his or her credit is being used illegally?  These are all questions that parents should ask themselves but often do not.

Typically children do not have a credit report until they actually obtain their first credit card, car loan or other financial account that is reported to the credit bureaus.  This should not be until they reach the age of majority in your state and can legally enter into contracts.  Or possibly when you add them as an authorized user on your credit cards, not that I am advising that you do that!

However, children are often the victim of identity theft long before they are old enough to obtain their own credit.  Oftentimes, it is the children's own parents that are the identity thieves.  A credit application appears one day bearing the child's name.  A quick application later and a credit card is issued in the child's name.  An unscrupulous parent can then make charges that never are re-paid and that do not affect the parent's credit report.

And it does not have to be a parent that commits the crime.  Children can be the victims of identity thieves that are complete strangers.  Or they can be "merged" with another adult consumer whose name, Social Security number or other personal identifiers are similar to your child's. While the credit bureaus should never allow this to happen by simply complying with the Fair Credit Reporting Act, it does happen because the credit bureaus are known to utilize faulty matching logic that allows such mergers of credit files to happen.  And when it does, the adult consumer's credit can and will land on your child's credit report, which can cause your child to be saddled with a bad credit history before he or she even begins their adult life.

So how do you protect your child's credit?  What are the warning signs that a child has become the victim of identity theft?

You should check your child's credit report with the big three credit bureaus (Experian, Equifax and Trans Union).  I suggest doing so when your child turns 16.  At that point, the response from the credit bureaus should be that they have no file on your child.  But, if there is a file, then you should obtain a copy (as the parent and guardian of your child) and confirm that no accounts have been opened in your child's name.  If there have been, dispute them to the credit bureaus, including a copy of your child's birth certificate to prove that he or she is under age and thus not legally capable of entering into a contract to open the fraudulently opened account(s).

Should you ever check your child's credit before their sixteenth birthday?  Yes - if your child starts receiving credit card applications, collection letters, collection calls or anything indicating that they have been active in the credit arena.  This could be an indication that your child's identity has already been stolen.  At that point, despite your child's age, you should check his or her credit report and dispute anything that is not your child's credit.

Ideally, such disputes will lead to the child's credit reports being corrected.  But, as often is the case, the credit bureaus will not perform reasonable investigations of the disputes.  At that point, you should consult an attorney like me who specializes in Fair Credit Reporting Act litigation.

Nigerian Citizen Living in North Carolina Arrested for Phishing Scheme Targeting Connecticut and Minnesota School Districts

Nigerian citizen Daniel Adekunle Ojo was arrested last week at his residence in Durham, North Carolina.  He is being charged with fraud and identity theft charges filed by Connecticut U.S. Attorney Deirdre Daly.  

According to prosecutors, an employee of the school district in Glastonbury, Connecticut was duped by a phishing scam which Ojo was allegedly behind.  A phishing scam is one where an e-mail that appears to be legitimate asks for private information or asks the recipient to log into an account via a link in the e-mail that leads to a fake site.  Any information obtained via a phishing e-mail can then be used to commit financial crimes.

In the scam in this case, Ojo allegedly spoofed the e-mail address of one school employee to make it appear that that school employee had e-mailed the duped school employee requesting tax information for approximately 1600 school district employees.  Not realizing that the e-mail was not legitimate, the school employee provided the requested information, which was then allegedly used to file 122 bogus tax returns for nearly $600,000.00 in tax refunds.

At least six of the fake tax returns were successful, resulting in $37,000 in refunds being electronically deposited into various bank accounts.

It is also believed by authorities that Ojo is not a first time phisher.  Ojo's e-mail address is allegedly linked to a phishing scam in Bloomington, Minnesota earlier this year and that he may have been involved in a similar phishing scheme that targeted the school district in Groton, Connecticut.

A federal magistrate judge has ordered that Ojo be transferred to Connecticut for prosecution.

My advice on phishing:  Never, ever, ever click a link in an unsolicited e-mail even if it looks like it legitimately came from a company with which you do business.  Phishers used to be easy to spot due to their poor grammar and odd phrasing used in their e-mails.  But they have gotten better and thus less easy to spot.  So think hard before you click.

Former Member of U.S. Air Force Sentenced for Identity Theft

A Chicago federal judge has sentenced former U.S. Air Force member Ronnie Allen II to four years in prison for identity theft.  Allen, a 28 year old from Greensboro, North Carolina, used his position in the Air Force to illegally steal an Air Force personnel roster.  The roster contained the private identifying information of approximately 1400 Air Force members stationed in Idaho at Mountain Home Air Force Base.  The personal identifiers contained on the illegally obtained roster included the names, Social Security numbers and dates of birth of the Air Force personnel.

According to prosecutors, Allen distributed the private information contained on the stolen personnel roster with the hopes of profiting financially from the information's dissemination.  The information was then used to file tax returns and fraudulently open financial accounts using the names and other personal identifiers of the Air Force personnel on the list.  It is unclear how many Air Force members were affected by the dissemination of their personal identifiers.

Identity thieves often open credit cards and obtain loans using the names and other personal identifiers of their victims.  The criminals then make purchases using the credit cards and loans.  The charges are never paid, thereby ruining the victims' credit history while the criminals profit without any consequence unless caught.

Forged tax returns are a slightly different version of identity theft and has become more prevalent in recent years.  Instead of opening new financial accounts, the identity thief completes a fake tax return in the name of his or her victim.  This is usually done as early in the year as possible before the victim files his or her real return.  The taxes on the forged tax return are calculated in such a way as to result in a refund, which is then received by the identity thief instead of the victim.  The IRS has been cracking down on this type of identity theft over the past few years, including issuing pin numbers to persons who have been victims in the past to prevent the crime from reoccurring.

While four years seems like a light sentence to me (the damage to the victims' credit histories will last longer than that), it is good to see an identity thief like Allen being forced to spend at least some time behind bars.

New Blog Series - What Are Your Rights as a Consumer?

I represent a lot of consumers in litigation using different federal laws designed to protect consumers, such as the Fair Credit Reporting Act, the Fair Debt Collection Practices Act and the Telephone Consumer Protection Act.  Because of my experience representing consumers, I have learned what rights consumers have and, as often as not, do not know they have.  So I decided to do a series of posts about various rights of consumers under these particular laws.  I hope you enjoy and learn about your rights as a consumer.

This first post in the series will focus on when a consumer is entitled to a free credit report.

So when is a consumer entitled to a free credit report?  First bombshell - no consumer is ever entitled to a free credit report.  Why?  Because, in the eyes of the law, there is no such thing as a credit report.  Instead, there are "consumer reports" and "consumer disclosures". Consumer reports are basically what most people think of as a credit report.  The Fair Credit Reporting Act ("FCRA" for short) calls them "consumer reports" because consumer reports can deal with much more than just credit. Background checks are consumer reports. Compilations of insurance claims can be consumer reports. So can a lot of other types of  "compilations of data".

15 U.S.C. 1681a(d) defines a consumer report as "any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer’s credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer’s eligibility for:

(A) credit or insurance to be used primarily for personal, family, or household purposes;

(B) employment purposes; or

(C) any other purpose authorized under section 604 [§ 1681b]."

15 U.S.C. 1681a(f) defines a consumer reporting agency as "any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports."  And the term "person" includes corporations or other businesses.

So what does all that mean?  Basically, if a company or person compiles information about a consumer not for their own use but to provide it to a third party (usually in exchange for money), then that compilation of information is a consumer report.  When a consumer applies for a loan or a credit card, and the potential lender gets the consumer's "credit report", what they are actually getting is a consumer report.  Also, when a consumer applies for insurance or, in some instances, even a job, the insurance company or prospective employer often obtains a consumer report on the consumer before agreeing to insure or hire the consumer.

So when does a consumer have the right to get a free copy of his or her consumer report?  Again the answer is never.  This is true because consumer reports, by definition, only go to third parties (i.e. the credit card company or mortgage company).

A consumer disclosure, on the other hand, is basically the same thing as a consumer report (at least its supposed to be) but the recipient of a consumer disclosure is the consumer rather than a third party.  For the most part, the content of both a consumer report and a consumer disclosure is supposed to be the same, with the exception that the consumer disclosure has both hard and soft inquiries (i.e. records of access of the consumer's credit history).  

Why the distinction between consumer reports and consumer disclosures?  Because a credit bureau can not be sued for the contents of a consumer disclosure but can be sued, under the right circumstances, for the contents of a consumer report.  The concept is similar to the tort of defamation.  You can not sue me for telling you something untrue about you but you can sue me if I tell a third person a lie about you.  Congress wanted the credit bureaus to feel free to truthfully disclose the contents of a person's credit history to the person himself so they made it where the credit bureaus can not be sued for the contents of the consumer disclosure.  But they can still be sued for the contents of the consumer report, assuming they violated the FCRA in some way.

So, when is a consumer entitled to a free copy of his or her consumer disclosure?  

First and foremost, the big three credit bureaus Experian, Trans Union and Equifax are required to provide every consumer with one free consumer disclosure a year.  But this is not an automatic process.  Instead, each consumer must request a copy of his or her consumer disclosure.  There are three different ways to request your free annual consumer disclosure.  First, you can visit www.annualcreditreport.com which, despite the name, gets you your free consumer disclosures. This website allows you to choose which of your free consumer disclosures you want and then the site re-directs you to each of the credit bureaus' websites for the disclosures you want.

Second, you can use the form found at this location -  https://www.consumer.ftc.gov/articles/pdf-0093-annual-report-request-form.pdf - to request your free consumer disclosure(s) by mail.  Takes longer than accessing them online but at least you know you are not agreeing to anything you do not want to agree to by using the credit bureaus' websites.

Lastly, you can call 877-322-8228 to request your free consumer disclosures by phone.

Consumers are also entitled to a free consumer disclosure from any credit bureau whose consumer report is used in an adverse credit decision.  If you are turned down for a credit card, a loan, insurance or a job based upon the contents of your consumer report, the "user" of the consumer report that turned you down is required to send you a letter that states that you were turned down and gives you the name of the consumer reporting agency (aka credit bureau) whose information they used as part of the basis for their decision to turn you down.  This adverse action letter is also supposed to either give you the reasons why you were turned down (i.e. too much derogatory credit) or tell you that, within 60 days, you can request the reasons for the turn down in writing.  In my opinion, you should always request the reasons why you were turned down because you might just learn something like that bad credit is wrongfully being reported on your consumer report and because you should make any user too lazy to include the reasons in the original adverse action letter have to take the extra step of having to write you a whole new letter to tell what they should have already told you.

You can also get a free copy of your consumer disclosure if you are a victim of fraud, including identity theft.  

To sum up - free credit report?  No such thing.  Free consumer report?  Not going to happen.  Free consumer disclosure?  Once a year from each of Experian, Trans Union and Equifax and also any time you suffer a credit denial or other adverse action or are the victim of fraud.

Last but not least.  If you find an error on your consumer disclosure, you should dispute it to the credit bureaus in writing using their addresses found on this page of our website - www.kittell-law.com/practiceareas/consumerprotection/faircreditreportingact.  

And, if the credit bureaus fail to correct the error, you should contact the Kittell Law Firm to seek possible representation in a Fair Credit Reporting Act lawsuit.

Beware of Credit "Repair"

Be wary of anyone claiming that they can get current accurate information on your credit report deleted.  Information can only be deleted from your credit report if it is inaccurate (i.e. not yours) or if it is obsolete, which usually means a derogatory item that is more than seven years old. Lately, I have seen a lot of ads on the internet promising to "repair" your credit by having accurate, current information removed from your credit report.  This simply does not happen and is, at best, a waste of money and, at worst, a scam.

Some of the ads I have seen for credit "repair" are obviously untrustworthy.  For instance, I keep getting Craigslist ads in my Google alerts for credit repair.  You should always beware anything on Craigslist but even more so when it involves a service that sounds too good to be true. These ads are clearly suspect and are easy to avoid.

Other ads are a bit slicker, like the ones for so called law firms in the credit repair business. From my experience from potential clients who seek to hire me after one or more credit repair law firms fail to help them (after taking a lot of their money, of course), the disputes lodged by the credit repair "law" firms look like they are written by a toddler with a thesaurus, using long words that sound impressive but make no sense in the context they are used and, as a result, are not even likely to get an error deleted, much less an accurate item.  From what I have been told, the credit bureaus routinely ignore disputes from known credit repair law firms since they dispute all derogatory items, not just the erroneous items, and thus have little or no credibility left with the credit bureaus.  

Do not fall for these scams.  If you want an actual error corrected on your credit report, contact the Kittell Law Firm in Hernando, Mississippi and we will be glad to assist you in correcting your credit reports.  Not only will we do our best to get your credit report corrected, if a violation of the Fair Credit Reporting Act has occurred, we will seek compensation for you as well.  Unlike credit repair "law" firms, we try to put money in your pocket, not take it from you.

Identities stolen at a pace of one every three seconds in 2012!

One Mississippi ... Two Mississippi ... Three  Mississippi.  Uh oh, someone's identity was just stolen.

The crime rate for identity theft rose to a three year high in 2012 with more than 5% of the adult population in the United States having their identities stolen last year. That's 12.6 million consumers.  That also means that an identity was stolen every three seconds last year.

Yes, every three seconds someone in the U.S. fell victim to the life changing, financial ruining, most under prosecuted crime in the nation. Not to mention a crime that is nearly impossible to recover from absent a lawsuit due not to the complexity of the crime but the utter disdain for consumers held by the consumer reporting agencies and the furnishers of credit information, i.e. those charged by the Fair Credit Reporting Act with investigating credit errors but instead refer those investigations to out sourced, less than minimum wage, third world citizens who are not even given the authority or tools to investigate or correct any error.

The percentage of identity theft rose to more than 5% in 2012 , up from 4.9% in 2011 and 4.35% in 2010. Identity thieves made off with over $21 billion in fraudulently obtained goods and cash, the most since 2009. Also, not surprising, the same study revealed that the most important information to keep private is your social security number. According to the study, consumers whose social security number were compromised were five times more likely to have their identity stolen than an average consumer. So keep your social security number private as much as you can. And, if you are one of the unlucky 5%, be sure to hire the Kittell Law Firm and regain your correct financial reputation.

Ten Things the Credit Bureaus WON'T Say

The lastest blog post from the Kittell Law Firm website:

Kudos to AnnaMaria Andriotis at MarketWatch.com for penning a very detailed, in depth article about ten things the Credit Bureaus won't say.  I have taken her ten items (in quotes below) and added my thoughts for each one.  I even added an eleventh thing you won't hear the Credit Bureaus dare say.  

Ms. Andriotis' ten things include:

1.  "We track a lot more than just your credit."  What else do the credit bureaus track?  Pretty much anything they can.  Like how often you change addresses, your income, your neighbors' income, your city's average credit score, how often you change jobs.

2.  "Selling your secrets is how we make our money."  That's right.  We are not their customers.  We are the credit bureaus' inventory.  And they get that inventory virtually for free (and sometimes even paid to receive it).  Our creditors provide our payment history to the credit bureaus, sometimes paying a fee to do so.  The credit bureaus then turn around, compile the information provided by thousands of creditors into your credit report, then sell it to you and to your potential creditors.  If they assign the oh so magical "credit score" to your report, you pay even more just to have this number (which is not even uniform among the credit bureaus, creditors, or any one else).  Craziness.  Even crazier ... the credit bureau industry raked in about $4 billion in 2011 selling you to your potential creditors.  Bet you did not see a dime of what your information was sold for.

3.  "What we know could cost you a new job."  That's right.  Your credit report is not just used to determine your credit eligibility.  Its also used by many employers (roughly 47%) during the hiring process.  That often leads to a catch 22 type situation that I have talked about before, where you can't pay your bills because you are unemployed but no one will hire you because your credit score dropped when you didn't pay your bills.  Again I say ... craziness.

4.  "Good thing no one's reporting on our mistakes.  Oh, wait."  That's right, the credit bureaus sure wish there was no one paying attention to their accuracy level, or lack thereof.  But watchdog organizations and even governmental entities are watching and keeping track.  US PIRG releases a report on the credit bureaus every few years.  And, recently, the Federal Trade Commission issued a very damning report that showed that one in five (20%) of consumers had at least one error on one of their credit reports.  13% had errors serious enough to effect their credit score (i.e. making their interest rates go up or their credit limits lessen) and 5% had errors so bad that the errors would cause them to be denied credit in their entirety.  5% may not sound like a big number but that equates to about 10 million consumers.  Crazy scary.  

The Fair Credit Reporting Act requires the credit bureaus to follow reasonable procedures to assure maximum possible accuracy of the credit reports they create (and profit off of).  Obviously, a 20% error rate is not "maximum possible accuracy" or anything close.  Add that to an investigation procedure that does not come close to cutting it, and you have a recipe for a disaster for hardworking consumers.

5.  "You all look so much alike..."  This one hits on the faulty matching logic used by the credit bureaus.  When the credit bureaus generate credit reports about you, they use the personal identifying information inputted by the entity seeking your credit report to match you to your accounts.  At least that's how its supposed to work.  But the credit bureaus do not require an exact match of your identifiers to the identifiers on an account before putting that account on your report and publishing it as your history, good bad or ugly.  This leads to what us consumer lawyers call mixed files.  

I once represented a man whose brother had bad credit.  They shared the same last name (most brothers do).  Their first names started with the same first initial (again, a lot of parents name their kids like that).  Seven out of nine numbers of their SSN match, but that's not uncommon.  If they got their SSNs in the same state and at the same time, its very likely the first five numbers match, since (back then) the first three numbers identified the state where the SSN was obtained and the middle two numbers indicate the grouping of SSNs.  So if their parents got their SSNs at the same time (again, not uncommon), the first five numbers are very likely to match.  The two brothers in my case also shared the same address at one point in time (about 10 years before, again not uncommon for brothers to at one point live at the same address).  And their dates of birth were within ten years of each other, again not unusual for brothers.  So the only personal identifier that match was the brothers' last name.  But that was enough for one of the credit bureaus to merge their credit histories together, ruining my client's stellar credit with his deadbeat brother's terrible credit history.  And, even worse, the credit bureau refused to fix the problem, despite years of dispute from my client, until he finally hired me and we sued.  Crazy crazy.

6.  "... its tough to tell you apart from someone pretending to be you."  Ahhhh, identity theft.  The reason I got into this area of law to begin with.  While its often the fraudulent credit grantors that are to blame for the problems caused by identity theft, the blame also rests with the credit bureaus.  What the credit bureaus want to ignore is the Fair Credit Reporting Act's requirement that they perform reasonable investigations of disputes lodged with them.  They want to pretend that only the furnisher of the disputed information has such a duty (the furnisher does have such a duty, but its in addition to the credit bureaus' duty to investigate).  So all the credit bureaus do to "investigate" is forward your dispute to the furnisher of the erroneous data and then ... wait for it ... the credit bureaus believe whatever the furnisher tells them, no matter what proof you have provided of your innocence.  Unlike in baseball, where "a tie goes to the runner", in the credit bureau's world, you are out no matter how much you beat the throw, simply because the umpire says you are.  And the umpire gets paid if he calls you out.  Twice as crazy as crazy crazy.

7.  "Your 'credit dispute' doesn't quite capture our attention."  This ties into number 6.  The Fair Credit Reporting Act requires the credit bureaus to forward all relevant information provided to them by the disputing consumer to the furnisher of the information being disputed.  But what's nuts (I've run out of ways to say crazy)?  The credit bureaus do not even have a system in place that allows them to forward any documentation or other proof from consumers to the furnishers.  All they provide is a two digit code that is translated on the furnisher's end to a basic dispute like "identity theft" or "not mine" or "never late".  So send proof that you were never late, including bank statements and cancelled checks.  But don't expect your proof to make it to that umpire waiting to get paid by calling you out.

8.  "But bypass us on a dispute, and it'll cost you."  This is one of the main weaknesses of the Fair Credit Reporting Act.  There is no liability on the part of the credit bureaus or the furnishers of erroneous information if you do what most think is natural - dispute directly to the furnisher.  For the duties to perform reasonable investigations under the FCRA to be triggered, the dispute must be made to the credit bureau, even though all they are going to do is pass the buck on to the furnisher.  Many consumers do not know this and end up with no claim because they went straight to the furnisher instead of disputing to the credit bureaus.  

But disputes to furnishers are important.  See number 6 and 7.  Because the credit bureaus do not pass on your proof to the furnishers and do a lack luster job translating your two page dispute letter to a two digit dispute code, sometimes it is up to you to let the furnisher know what  your dispute really is.  And disputing to the furnisher in addition to the credit bureaus eliminates a common defense I see from the furnishers where they claim ignorance as to a consumer's dispute because they did not know what the credit bureaus meant by their two digit dispute code.  So, all you consumers out there, be sure to lodge your disputes with both the credit bureaus (to trigger the FCRA) and with the furnishers (so they can't avoid the FCRA by claiming ignorance).  

9.  "By the time you're done fighting us, your toddler could be a teen."  This one I don't necessarily agree with but only because the author of the Marketwatch.com article did not mention that you can stop the errors in most cases by suing the credit bureaus and/or furnishers.  So, consumers, dispute the errors.  Dispute them often.  Give the credit bureaus and the furnishers multiple opportunities to do the right thing and fix their errors.  And, if and when they don't, hire a consumer lawyer like me and sue the bureaus and furnishers for all the heart ache their refusal to follow the law caused.

10.  "Be careful what you pay for."  I've blogged on this topic multiple times at my blog located at www.fcralawyer.blogspot.com.  The credit score that the credit bureaus so eagerly want to sell you is not even a score that is used by your potential creditors in most instances.  It can be enlightening to see what your score is, but that's about it.  Creditor use different scoring models than what the credit bureaus sell.  The most common used score is the FICO score which consumers can buy, but not from the credit bureaus.  To see your FICO score, go to http://www.myfico.com.  

All in all, a very informative and well researched and written article about the true story of the credit bureaus.  But I will add a number 11 of my own:

11.  "We spend top dollar to investigate your disputes."  Not only do they not pay top dollar, the credit bureaus do not even pay minimum wage to its investigators. Your disputes are being handled by outsourced investigators in such places as Chile, Jamaica and the Philippines, where the credit bureaus do not even have to pay minimum wage.  And they work their third world work force by placing quotas on how many investigations they perform a day.  One such credit bureau expected its investigators to perform an investigation every two minutes.  That's simply not enough time to "reasonably" investigate anything.  Craziness to the nth degree.

Please read the full article at http://www.marketwatch.com/story/10-things-credit-bureaus-wont-say-2013-02-15.  Again, the article is very well written and a must read.

Identity theft news for February 12, 2013

Interesting news articles regarding identity theft found at the Kittell Law Firm's blog at http://www.kittell-law.com/blog/2013/02/12/bullet-points-identity-theft-news-122102

You'd better start reminding your neighbors to pay their bills on time!  Now, at least one of the big three credit bureaus is keeping track of credit scores by metro area as a reflection on your personal likelihood to pay your bills.

This should go in the "surely they've got to be kidding" file.  But its apparently true.  Trans Union, one of the big three credit bureaus and perennial defendant in Fair Credit Reporting Act lawsuits filed by the Kittell Law Firm, is tracking not just individuals' credit scores, but the average credit scores for metropolitan areas.  This means that, even if you pay all your bills on time, you are at risk for getting turned down for a loan or credit card just because the area you live in has a low average score, which, according to Trans Union, could indicate that you are less likely to repay your creditors.  

Calling them "metro ratings", Trans Union has determined the average risk for a collective group of people based upon where those people live.  Trans Union contends that a low metro rating does not just reflect a geographically localized group of lackluster bill payers, but could indicate places where the unemployment rate is high or that were hit hard by home foreclosures.  

Talk about hitting where it hurts.  Trans Union, who cares about nothing other than its bottom line, is now making it harder for entrepreneurs who want to start a new business in an economically deprived community to get a loan because the unemployed workforce who need the jobs the entrepreneur is trying to create have low credit scores because (duuuhhh) they are unemployed and can not pay their bills.  I have not seen a vicious cycle like that since employers started reviewing credit reports during the job application process, which lead to the old "you don't have a job so your credit score is low so I can't give you a job because your credit score is low" catch 22.  

So, neighbors of mine, don't be surprised if I start calling you once a month to make sure you are paying your bills timely, particularly since the area I live in (the Memphis Tenn-Miss-Ark area which us local folks call the Mid South) has the worst metro rating in the nation at a measly score of 638 (using a scoring range of 501 to 999).  

The complete list of the worst metro scores are:

Memphis, Tenn-Miss-Ark. 638;

McAllen-Edinburg-Mission, Texas 639;

Jackson, MIss. 642;

El Paso 650;

Columbia, SC 650;

Las Vegas-Paradise 650;

Little Rock-North Little Rock-Conway 651;

Baton Rouge 651;

Lakeland-Winter Haven, Fla. 651; and

Augusta-Richmond County, GA-SC 651.

The best metro scores are:

San Jose-Sunnyvale-Santa Clara, Calif. 700;

San Francisco-Oakland-Fremont, Calif. 696;

Madison, Wis. 694;

Honolulu 693;

Minneapolis-St. Paul-Bloomington, Minn.-Wis. 691;

Bridgeport-Stamford-Norwalk, Conn. 690;

Boston-Cambridge-Quincy, Mass.-N.H. 689;

Oxnard-Thousand Oaks-Ventura, Calif. 685;

Portland-South Portland-Biddeford, Maine 685; and

Seattle-Tacoma-Bellevue, Wash. 685.

What's next?  Trans Union tracking people's credit worthiness by the average score of their Facebook friends?  Now where was that "unfriend" button again?!

Or how about by party affiliation?  Interesting to note that the 8 of the 10 bad metro scores came from "red" states while all 10 of the best metro scores came from "blue" states.  I guess Trans Union will now be claiming that Democrats are better financial risks that Republicans!