Background Screening Company Doesn't Want Equal Employment For All

Judy Gootkind, member of the Board of Directors of the National Association of Professional Background Screeners, a group made up of resellers of consumer reports for background checking purposes, testified yesterday before the House Financial Services Subcommittee regarding a new proposed law entitled "The Equal Employment for All Act", H.R. 3149.  From reading a transcript of her testimony (reprinted below), it appears that NAPBS's main beef with H.R. 3149 is their claim that it would limit the types of companies who could use credit reports as part of background checks to "financial institutions", as defined by the FCRA.  I will have to do a bit more research to see if Ms. Gootkind's claims are valid. 

Her testimony is below:

"Sep 24, 2010 (Congressional Documents and Publications/ContentWorks via COMTEX) --


Chairman Gutierrez, Ranking Member Hensarling and members of the committee, thank you for this opportunity to testify. My name is Judy Gootkind and I appear here today on behalf of the National Association of Professional Background Screeners -- NAPBS. I am a member of the NAPBS Board of Directors. My company, Creative Services, Inc., located in Mansfield, MA, is a member company of NAPBS and I am Vice President of Finance & Administration. Creative Services, Inc. is located in the Fourth Congressional District of Massachusetts, Chairman Frank's district.

NAPBS is a trade association founded in 2003 which represents over 700 companies engaged in employment and tenant background screening across the country. Of this figure, approximately 360 member companies are Regular Members, meaning that they are primarily engaged in the business of providing employment and/or resident background screening services directly to end-users, such as employers, landlords and businesses. The majority of those Regular Members are small businesses, with 12 or less employees. Having said this, our membership does include a range of companies, from Fortune 100 companies to small local businesses. Collectively we conduct millions of employment and tenant screening checks each year.

In the employment context we provide background checks for private employers, volunteer organizations, non-profits, government, public utilities, healthcare, higher education and publicly held corporations. NAPBS seeks to promote ethical business practices, promote compliance with the Fair Credit Reporting Act and State law analogs and foster awareness of issues related to consumer protection and privacy rights within the background screening industry.

Our industry is highly regulated, both by the Federal Trade Commission and the newly created Bureau of Consumer Financial Protection. n1 Our ability to provide our employer end-users with consumer reports is driven by consumers' consent for such reports to be generated when they apply for employment or seek a promotion.

Before responding to the Committee's questions provided to NAPBS, I would like to point out our concerns with H.R. 3149, "The Equal Employment for All Act". We believe this legislation, as drafted, too narrowly restricts the use of credit reports for employment purposes, and all but prohibits them in the private employment space. As drafted, the legislation would limit the use of credit reports for those jobs requiring national security or FDIC clearance, state or local government agency employment, supervisory, managerial, professional, or executive positions at a financial institution, or when otherwise required by law. Our specific concerns are as follows:

* The legislation would limit the use of credit reports in private employment to certain positions at financial institutions, a narrowly defined term under current law. The term "financial institution" is defined in the Fair Credit Reporting Act to mean, "...a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or any other person that, directly or indirectly, holds a transaction account (as defined in section 19(b) of the Federal Reserve Act) belonging to a consumer." n2

* The legislation as written would prohibit the requesting of credit reports for the following types of positions, all of which are examples of actual job applicants for which NAPBS member companies provide credit reports: lawyers, mortgage lenders, property managers, cashiers, pharmaceutical representatives, pharmacists, asset management and financial planners, public safety officers, jewelers, health providers, NBA referees, executives in non-financial institution employers, accounting employees, finance employees, Information Technology employees, procurement employees, academic financial aid employees, Human Resources employees and other positions where employees have access to large amount of cash spending or personal information of other employees or customers.

Some would say that credit reports are reputation collateral and for many consumers, their credit history may be a good thing rather than the negative light in which they are being cast. NAPBS feels that there are instances beyond those which H.R. 3149 would allow in which it would be important and/or necessary to our employer end users to request a credit report. While NAPBS understands that this legislation seeks to limit the use of credit reports so that the credit history has some bearing on a person's job responsibilities and duties, as written, it eliminates many other positions where credit could be at least a potential sign of someone's judgment.

In your letter of invitation, you have asked NAPBS to address particular issues and questions regarding credit reports and employment background checks.

Committee Question -- Please explain the process of developing the reports that you provide to employers, including what types of information is used and how it is filtered. For example, do you alter or modify the information that you receive from the credit bureaus? If so, why and how?

Some background on how we operate is necessary to answer this question. Each Company who provides consumer reports to a third party is defined under the Fair Credit Reporting Act ("FCRA" or "Act") as a "consumer reporting agency". We provide "consumer reports" to third party end-users, for a variety of "permissible purposes" under the Act, including for employment purposes. The FCRA specifically lists those "permissible purposes" for the use of such reports in section 604 which is entitled "Permissible purposes of consumer reports". One such permissible purpose is for employment purposes, which is defined in the law as, "...a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee." n3

A consumer report could include information from a variety of sources, including a credit report/credit history, public record information such as a criminal report, or employment or education verification. It is important to mention that in the context of employment checks, a credit score is never included. The three major credit bureaus do not sell credit scores for employment purposes nor are consumer reporting agencies able to report such scores if the purpose of the consumer report is for employment purposes. In fact, contractual agreements are in place which prohibit our access to, or use of credit scores, in the employment context. Moreover, the bureaus audit end users as well as resellers of credit information for compliance with their agreements. As such, technical measures are in place to ensure that an end user identifies its permissible purpose upon ordering the report, leaving little room for an end user to receive an actual credit score by accident or otherwise.

Important steps in the background screening or consumer report preparation process. Prior to requesting a consumer report, an employer must provide to the prospective employee a written notice stating what information will be requested, the source of the information and the purpose for which it will be used. An employer must also provide a copy of the consumer report, including the credit report, to the consumer upon request, and prior to taking an adverse action in whole or in part based on the credit report. With the report, an employer must also provide a copy of the Federal Trade Commission's document entitled "A Summary of Rights Under the Fair Credit Reporting Act." The employer must then wait a reasonable period of time before making the ultimate decision thereby allowing the consumer the opportunity to dispute any inaccurate information in the report. n4 If an adverse employment action is taken against a prospective employee based on any information contained in a consumer credit report, for instance, the end user must provide the name and contact information for the consumer reporting agency to the consumer. Consumers can also request and obtain all the information about themselves in the files of a consumer reporting agency and they have the right to dispute incomplete or inaccurate information n5. Furthermore, consumer reporting agencies must correct or delete inaccurate, incomplete or unverifiable information.

Committee Question -- Has the use of credit reports/checks for employment purposes increased over the past decade?

This question is better addressed to the end users of such reports as we do not have such statistical data on hand at NAPBS.

Committee Question -- Do you add any information to the reports you receive from credit bureaus? If so, please explain what, why and how.

Generally, No. As a reseller of credit reports, most consumer reporting agencies merely pass through the credit reports they receive from the credit bureau(s).

Committee Question -- What kind of information is included in the reports you provide to employers?

A credit report includes information about a consumer and their credit experiences, such as name, addresses, employers, social security number, trade accounts, credit limits, balances, payment history, collection accounts, bankruptcies and tax liens. It may also provide additional verification and/or identify discrepancies with regard to the applicant's name, address, social security number and employment history.

Committee Question -- Do you have any proof that a credit record is an indicator of someone's propensity to commit a crime or their ability to successfully perform the duties of the job for which they might be considered? Please explain your views on this particular issue.

As consumer reporting agencies, we are the providers of information to end users when they are requesting background information, be it education or employment references/verification, credit history or criminal history. We believe the Committee is better served by facts rather than our personal views.
One study that may be of interest to the Committee is that conducted by the Association of Certified Fraud Examiners entitled "2008 Report to the Nation on Occupational Fraud & Abuse" which states that "...credit checks were by far the least common form of background check performed by victim organizations. Past research indicates that financial pressures are one of the key motivating factors of occupational fraud, and indeed, in [their] survey [they] found that the two most commonly cited behavioral red flags among fraudsters were 'financial difficulties' and 'living beyond one's means'". n6

Committee Question -- Please provide the subcommittee a standard, sample credit report for employment purposes that would normally be purchased by your clients. You may redact any personal or confidential information.

A sample credit report is included with this statement.

n1 The Bureau of Consumer Financial Protection was created by the Consumer Financial Protection Act of 2010 (Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203).

n2 Section 603(t), FCRA.

n3 Section 603(h), FCRA.

n4 Section 604(b)(3), FCRA.

n5 Section 609(a), FCRA.

n6 Association of Certified Fraud Examiners, "2008 Report to the Nation on Occupational Fraud & Abuse" found at http://www.acfe.com/documents/2008-rttn.pdf

New scam aimed at attorneys!

As if attorneys weren't maligned enough, I just received this from the Mississippi Bar Association.  Apparently there is a new scam out there targeting lawyers.  Every lawyer out there needs to be aware of this scam because I could see how one could easily fall for it.

The Bar has been advised of at least two scams being perpetrated on lawyers involving a common set of facts. The lawyer is hired by an out of state client to assist it with collecting a debt from a local business debtor. The premise is that the creditor believes it might settle with the local debtor, but wants to get the case ready just in case. The amounts involved are in the low six figures. The lawyer is either hired by phone or email and may or may not insist on a written employment contract. A day or two after the lawyer agrees to represent the fraudulent client and before the lawyer contacts the debtor, an official bank check appears in the mail for the full amount of the collection. Many of the scams involve an official Citibank check (although any bank could be used in the scam).

Often, the mailed checks originate in Canada, even though the debtor is a local business. The envelopes containing the official bank check have Canadian postmarks and are sent via air mail. The lawyer is asked to deposit the check into his or her trust account. A few days letter, the lawyer is asked to wire the funds overseas due to an emergency and to remit the funds net of attorneys fees. The check eventually is returned as account closed, NSF, or for other reasons in a week or two. The lawyers trust account debited for the full amount. Since the funds were wired, the opportunity to retrieve the funds from an overseas bank account is virtually nonexistent. The Bar urges all lawyers to develop specific policies to insure trust account funds are protected at all times.

So, fellow barristers, beware!

Time Limit for Reporting Tax Liens

Tax liens are treated differently than any other item on a credit report.  Most adverse items are allowed to be reported for seven years from the date of delinquency, regardless of whether the item is ever paid.  Tax liens, on the other hand, potentially fall under two different seven year reporting periods.

15 U.S.C. 1681c(a)(3) says that paid tax liens are allowed to be reported for seven years from the date they are paid.  All other tax liens fall under the catch all provision found at 15 U.S.C 1681c(a)(5) and are allowed to be reported for seven years from the date they come into existence (since they are immediately considered adverse). 

Thus, you could have an unpaid tax lien reported for seven years, fall off the report, then, when paid, reappear for another seven years.  It is therefore not in a consumer's best interest (at least as far as credit reporting) to pay a tax lien after seven years.  But, it would be in the consumer's best interest to pay the tax lien as early in the seven year unpaid tax lien reporting period as possible, since this will allow both seven year periods to run more or less concurrently.  Kind of like a two for one sale.

But what about tax liens that are satisfied and/or released without any payment.  For instance, I had a client call me about an eight year old tax lien appearing on his credit report that had been "released" due to his bankruptcy about four years ago.  In this instance, the lien should have fallen off the report as obsolete since it was over seven years old and had never been paid.  A release does not always mean payment.  This is one such instance.  Another is where the lien is entered in error and released not because of payment but because of a recognition of the erroneous nature of the lien.

Unfortunately, the credit bureaus do not appear to have a mechanism in place to recognize the interplay between 1681c(a)(3) and 1681c(a)(5) when applied to tax liens.  As a result, tax liens often appear on consumers' credit reports longer than they should and often require a dispute to the credit bureaus (or more) to get them removed.

FTC cracks down on advertising for non-free services while ordering your free credit reports

NewJersey.com reports on new restrictions by the FTC -

In an attempt to make sure credit reporting agencies don't put a fast one over on consumers seeking free credit reports, the Federal Trade Commission has adopted tough new disclosure rules in response to more than 1,000 comments it received from consumers and others last fall.

Under a federal law passed in 2003, the three credit reporting agencies — Equifax, TransUnion and Experian — are required to provide consumers with a free copy of their credit report each year, but the agencies have found ways to recoup fees they used to get for those reports.

Part of the problem is that the gateway to the free reports — AnnualCreditReport.com — takes you through sites for the individual agencies. There, they try to sell services for which there is a fee, such as monthly reports (rarely needed) or your credit score (needed only occasionally).

And it's not just the three agencies, as other commercial sites use bait-and-switch tactics, drawing you in with the lure of free reports before pushing you to pay services.

Starting April 1, the commercial enterprises will still be able to sell their wares, but they'll have to do a better job of distinguishing between free and paid services.

The rest of the article can be found here - http://www.northjersey.com/news/business/85754242_Indeed__a_free_credit_report.html.

Another Career Involving an Identity Thief

As I have reported in the past, the careers that have spawned identity thieves has been many and diverse, from bankers to radio hosts, from nannies to car dealers.  Well, here's a new one - postal worker.

A former mail carrier has been sentenced to serve 180 days at the Middlesex County Adult Correction Center for taking an ATM card from the mail and using it to withdraw $7,533 from an individual’s account, Middlesex County Prosecutor Bruce J. Kaplan announced Tuesday.
Jennifer James, 44, of Howard Street, New Brunswick, also was placed on probation for five years and was told to repay the victim’s bank, which covered the individual’s losses.

James was sentenced in New Brunswick by Superior Court Judge Frederick P. DeVesa on February 22, after she pleaded guilty on Nov. 17, to a count of identity theft.
The plea agreement was reached following negotiations with Middlesex County Assistant Prosecutor Manuel Sameiro.
James was arrested and charged following an investigation by New Brunswick Police Officer William Contreras, who determined the defendant took the ATM card from one of the residents on her route.
The investigation further determined James used the card to make cash withdrawals at various ATMs between April 2, and April 7, 2009.

James, who had worked as a mail carrier for 15 years, subsequently was dismissed from her job.

Another Credit Repair Company Sued

According to a lawsuit filed by Colorado Attorney General John Suthers, a “credit repair” company has clearly violated federal and Colorado law by charging upfront fees and failing to disclose the total cost of its services.
The suit was filed in Denver District Court against Veracity Credit Consultants, a credit repair company that charges consumers initial fees of up to $99, and subsequent monthly fees as high as $79. Colorado law prohibits credit repair companies from charging fees until their services are complete.
The credit repair company of questionable character boasts of “results” and claims to be one of the best credit-repair outfits available.
According to the Colorado Attorney General, many of the company's claims are exaggerated at best. He specifically pointed to the company's claim that it can “optimize” consumers' credit reports by repairing or erasing bad credit as worthy of suspicion. Both the federal Fair Credit Reporting Act and Colorado Consumer Credit Reporting Act provide that credit bureaus can continue to report negative information about a consumer's credit for up to seven years.  Veracity's claimed tactics apparently fly in the face of the FCRA and Colorado's Consumer Credit Reporting Act.

Veracity's website says that the company “uses knowledge of the law and years of experience perfecting a proven formula to provide results while protecting your rights.” Once a consumer opens an account, according to the site, Veracity “investigates and works with credit bureaus and creditors” and works “to remove errors, delete negatives, and highlight good accounts.”
Despite these impressive claims, Veracity's “client-services agreement” explicitly says that the company doesn't “represent or warrant that it will achieve specific results for client.”
I have yet to meet a credit repair company that is above board.  Credit repair companies that are willing to try to remove accurate, non obsolete information from a consumer's credit report for a fee simply fly in the face of the entire credit reporting system and hurt those consumers who do pay their bills.  Just as strongly as I feel that credit bureaus should correct errors on consumers' credit reports, I also believe that consumers should have to live with their legitimately bad credit for the seven years that the FCRA allows the reporting of adverse credit items.  Credit repair companies are shady at best and those consumers who try to skirt the rules by using credit repair companies are, in my opinion, questionable as well.

Excellent post about how to build your credit report from scratch

Here's a link to an excellent article I read about how to build your credit report from scratch the right way!  Here's the link - http://www.theoldarmy.com/2010/02/building-you-credit-score-from-scratch/comment-page-1/#comment-413.

Check it out.

Watch Out India!

Experian Credit Information Co has received the final approval from the Reserve Bank of India (RBI) to set up a credit bureau in the country, it announced on Thursday. The bureau will have to begin operations within six months.


“Now that we have the licence, we will begin the process of collecting credit data from lenders,” said Phil Nolan, the newly-appointed managing director of Experian Credit Bureau.
In November 2009, Experian formed a credit information company in India by roping in seven partners, including Axis Bank, Federal Bank, Indian Bank, Magma Fincorp, Punjab National Bank, Sundaram Finance and Union Bank of India.
At present, Credit Information Bureau (Cibil) is the only functional credit bureau in the country.
“Cibil has a 5-year headstart and that is a big advantage. But, the advantage for us is that data sharing principles have already been established in the country. This will make our job simpler,” said Nolan.
In April last year, RBI had granted an in-principal approval to four credit bureaus, including Cibil, Experian, Equifax Information Services and Higmark Credit Information Services.
In January this year, Equifax announced about setting up a credit bureau in joint venture with six Indian partners, including Bank of Baroda, Bank of India, Kotak Mahindra Prime, Religare Finvest, Sundaram Finance and Union Bank of India.

New Bill to Require Free Credit Scores if Passed

Way to go U.S. Representative Steve Cohen, a Democrat from Memphis, TN.  Even though I've never met him, I feel like I know Representative Cohen, since I live and grew up just an hour or so south of Memphis and our local TV stations all come out of Memphis.  Cohen was a TN state representative but is now a freshman U.S. Representative, having won Harold Ford's old spot after he left it to unsuccessfully run for the U.S. Sentate.

Cohen has introduced H.R. 4538, a bill which would amend the FCRA to require that the credit bureaus provide consumers with their credit scores for free with their annual free credit reports.  As I have reported on many times previously, every consumer is entitled to one free credit report from each of the three main credit bureaus (Equifax, Experian and Trans Union) each year.  To get that report, consumers must use the website http://www.annualcreditreport.com/ or submit the request form via mail that can be found on that site as well as at my firm's website http://www.merkel-cocke.com/.

The primary problem with the free credit report is that it did not include your credit score.  For a consumer to get their all important credit score, the consumer must pay extra (usually around $5) directly to the credit bureau.  While the credit scores sold by the credit bureaus are not your true credit score, they are still good barometers for what your real credit score is.

Cohen's bill, if passed, would eliminate this problem with http://www.annualcreditreport.com/ and help consumers everywhere.  Mr. Cohen, if you read this, please know I congratulate you on a very good bill and offer any help I might provide through my nationwide contacts to help get the bill passed.  I know practically every attorney nationwide that handles FCRA litigation on a regular basis and would be happy to help drum up support for your bill.

Percentage of Americans falling behind on credit cards has leveled off

Good news for the economy -

The percentage of Americans falling behind on credit card bills stabilized in January, according to data from the six major lenders, signaling that U.S. consumer credit woes may be leveling off.

The rest of the article can be found here - http://www.reuters.com/article/idUSTRE61F4JB20100216

Credit Denial Codes

You would think that its is the credit lender that comes up with the reasons why it does not want to grant your credit application.  Wrong.  The lender makes the decision but it is the credit bureaus that provide the reasons why your credit application is denied to the lender which the lender then inputs on the adverse action letter they send you informing you that your application was denied.  Every time a credit bureau sends out your credit report to a third party, it includes four reasons why you should be denied credit, no matter how good your credit history is.  Even if your payment history is flawless and you have a "perfect" credit score, the credit bureaus still provide 4 reasons you shouldn't get credit.  Crazy, right?

The four reasons come in the form of four code numbers.  Here is a list of what those code numbers mean -

EQUIFAX – BEACON Score Codes


39 – serious delinquency

38 – serious delinquency, and derogatory public record or collection filed

34 – amount owed on delinquent accounts

33 – proportion of loan balances to loan amounts is too high

32 – lack of recent information on installment loan accounts or lack of installment loan accounts

31 – too few accounts with recent payment information

30 – time since most recent account opening is too short

28 – number of accounts established

24 – no recently reported revolving balances

23 – number of bank or national revolving accounts with balances

22 – accounts not paid as agreed, public record, or collection agency filing (FORECLOSURE)

21 – amount past due on accounts

20 – length of time since derogatory public record or collection is too short

19 – too few accounts currently paid as agreed

18 – number of accounts with delinquency currently or in the past not paid as agreed

17 – no non-mortgage account balances or non-mortgage balances not recently reported

16 – lack of recent revolving account information

15 – lack of recent bank revolving information

14 – length of time accounts have been established

13 – time since delinquency is too recent (or unknown) or trade narrative reported

12 – length of time revolving accounts have been established

11 – amount owed on revolving account is too high

10 – proportion of balances to credit limits is too high on bank revolving or other revolving accounts

09 – too many accounts recently opened

08 – too many inquiries last 12 months

07 – recent payment history is too new to rate

06 – too many consumer finance company accounts

05 – too many accounts with balances

04 – too many bank or national revolving/open accounts

03 – too few bank or national revolving/open accounts

02 – level of delinquency on accounts

01 – amount owed on accounts is too high

O – beacon not available, no recently reported account information

FA – number of inquiries adversely affected the score, but not significantly

TRANS UNION – EMPIRICA Score Codes

42 – length of time since most recent consumer finance company account established(**factor not currently in use)

41 – no recent retail balances (**factor not currently in use)40 – derogatory public record or collection filed

39 – serious delinquency

38 – serious delinquency, and public record or collection filed

36 – payments due on accounts (**factor not currently in use)

31 – amount owed on delinquent accounts (**factor not currently in use)

30 – time since most recent account opening is too short

29 – no recent bankcard balances

28 – number of established accounts

27 – too few accounts currently paid as agreed

26 – number of bank revolving or other revolving accounts (**factor not currently in use)

24 – no recent revolving balances

23 – number of bank or national revolving accounts with balances

22 – serious delinquency derogatory public record or collection filed (FORECLOSURE)

21 – amount past due on accounts

20 – length of time since derogatory public record or collection is too short

19 – Date of last inquiry too recent

18 – number of accounts with delinquency

17 – no recent non-mortgage balance information

16 – lack of recent revolving account information

15 – lack of recent bank revolving information

14 – length of time accounts have been established

13 – time since delinquency is too recent or unknown

12 – length of time revolving accounts have been established

11 – amount owed on revolving accounts is too high

10 – proportion of balances to credit limits is too high on bank revolving or other revolving accounts

09 – too many accounts recently opened

08 – too many inquiries last 12 months

07 – account payment history

06 – too many consumer finance company accounts

05 – too many accounts with balances

04 – lack of recent installment loan information

03 – proportion of loan balances to loan amounts is too high

02 – level of delinquency on accounts

01 – amount owed on accounts too high

00 – no adverse factor

MODEL NOT SCORED: INSUFFICIENT CREDIT message occurs when a credit file does not contain
a trade line opened for at least 6 months and trade line updated within the last 6 months.

FA – in addition to the factors listed above, the number of inquiries on the consumer’s credit file has adversely affected the credit score.

MODEL NOT SCORED: DECEASED message occurs when the subject’s Social Security Number matches the Social Security Administration’s deceased Social Security Number file, or is reported as deceased by a credit grantor.

EXPERIAN – FAIR ISAAC Score Codes

40 – derogatory public record or collection field

39 – serious delinquency

38 – serious delinquency and public record or collection filed

37 – number of finance company accounts established relative to length of finance history

36 – length of time open installment loans have been established

33 – proportion of current loan balance to original loan amount


32 – no recent installment loan information

31 – too few accounts with recent payment information

30 – length of time since most recent account established

28 – number of accounts established

26 – number of revolving accounts

25 – length of installment loan history

24 – lack of recently reported balances on revolving/open accounts

22 – account(s) not paid as agreed and/or legal item filed (FORECLOSURE)

21 – amount past due to accounts

20 – length of time since legal item filed or collection item reported

18 – number of accounts delinquent

17 – no recent (non-mortgage) accounts balance information

16 – insufficient or lack of revolving account information

15 – insufficient or lack of bank revolving account information

14 – length of time accounts have been established

13 – length of time (or unknown time) since account delinquent

12 – length of revolving account history

11 – current balances on revolving accounts

10 – proportion of balance to high credit on bank revolving or all revolving accounts

09 – number of accounts opened within the last 12 months

08 – number of recent inquiries

07 – Unable to evaluate recent payment history

06 – number of finance company accounts

05 – number of accounts with balances

04 – Too many bank revolving accounts

03 – Too few bank revolving accounts

02 – delinquency reported on accounts

01 – current balances on accounts

Exclusion Messages

9003 – Experian/Fair Isaac Score Not Available Due to Lack of Credit History – The Profile report does not contain any trade lines which have been open for at least six months

9002 – Experian/Fair Isaac Score Not Available Due to Model Exclusion Criteria – The Profile report does not contain any trade line which satisfies both of the following:

1. Status date within the last six months, or a balance within the last six months if the status code is not “11″ (“Current account”)

2. Does not contain disputed information

9001 – Experian/Fair Isaac Score Not Available Due to Report of “Deceased” Status – The Profile report contains a subscriber transaction with a status code of “21″ or an association code of “X” indicating the consumer is deceased

9000 – Experian/Fair Isaac Score Not Available Due to System File Size Parameters – The Profile report contains more than 100 subscriber trade and inquiry transactions

Five Secrets to your Credit Report

From creditdebt.toughchild.com - 

If you’ve ever applied for a loan or credit card, chances are your lender acquired and examined a copy of your credit report before deciding whether or not to grant you credit.


Your “Credit Report” is a record of your credit history and it’s prepared by agencies called “Credit Bureaus”, or “Consumer Reporting Agencies.” These are private organizations and have no affiliation with the United States (or any) government. There are 3 major credit bureaus in the United States (2 in Canada) and their names are Experian, EquiFax, and Trans Union.

Did you know that credit reporting is a multi-billion dollar a year industry? It’s true! The credit bureaus are for-profit organizations that generate billions of dollars in revenue each year from selling copies of credit reports to creditors and mailing lists.

Your credit report affects more than your financial life. It could affect your education, career, and even your relationships. Your credit report is used not only by lenders and creditors, but also by auto, life, and home insurers, future employers, and even some educational institutions. It affects the interest rates you’ll pay on everything!

So as you can see, your credit report can have a critical impact on many facets of your life. For example, because of a bad credit report you could be forced to pay tens of thousands of dollars MORE in loan interest over the life of your home mortgage. This is no exaggeration!

Since the credit bureaus prepare and distribute your credit report to lenders, they clearly wield a great deal of power over both your financial and personal life. But it would be a grave mistake to be intimidated by them, or to think that you have no choice but to live with the negative effects of a bad credit report.

In fact, there’s plenty you can do!

Always remember; Knowledge is power! There’re a few facts the credit bureaus would rather you don’t know. Let’s take a look at them, and you’ll see why.

1. Credit reports are filled with errors!

It will probably astonish you to learn the percentage of credit reports that contain errors. While there seems to be some disagreement, estimates range from 1 out of every 3 (on the low end) to as high as 90%! Here’s a “run down” on error estimates.

Percentage of Credit Reports Than Contain Mistakes

Attorney General of NY 1/3

Consumers Union 48%

US Congress 1/2

Charles Givens Organization 90%

So no matter who you believe, it’s clear that way too many credit reports have errors. So even if you think you have good credit, it might be well worth your while to get a copy of your credit report and take a careful look at it.

2. The law is on your side!

In 1972 Congress passed the Fair Credit Reporting Act (FCRA) to curb abuses by the credit bureaus. The FCRA is the governing federal law on the issue of credit reporting.

Under the FCRA, you have the right to dispute negative information in your credit report. The credit bureaus then have 30 days to verify the disputed information with the creditor. If they cannot (or do not) verify the disputed information within 30 days, it must be deleted from your credit report.

3. Even accurate data in your credit report must be deleted if it’s not verified.

If you’ve done any research into credit repair you’ve no doubt run across statements to the effect of “Negative data in your credit report that is accurate cannot be removed.” As stated above, the FCRA stipulates that any disputed information must be verified within 30 days, or it must be deleted. The “burden of proof” (in a manner of speaking), is on the credit bureaus.

4. Credit repair DOES WORK in most cases!

You’ll hear all kinds of opinions as to whether “credit repair” (i.e. efforts to improve your credit report) can be successful. The truth is, credit repair doesn’t always work perfectly. But in almost every case the process of credit repair will result in at least SOME improvement in your credit score, and most often that improvement is substantial. So credit repair does work!

Now you may be wondering why repairing your credit score would be of any concern to the credit bureaus. After all, don’t they make money by compiling and distributing credit reports regardless of whether those reports are negative or positive?

Well, yes they do, BUT…they also make money (a GREAT DEAL of money) selling names of people with poor credit, to creditors who have a specific interest in those people.

So why would some creditors want to bother with people who have poor credit? Because they know they can charge higher interest rates to those people, because the “bad credit risks” have no choice but to pay those exorbitant rates or forgo credit altogether!

Besides, investigating disputed information costs the credit bureaus time, manpower, and money. They have nothing to gain, and plenty to lose, when people take the initiative and dispute negative information on their credit report.

5. It’s perfectly legal to hire third party help to repair your credit.

There are plenty of “Credit Repair Agencies” who will help you repair your credit. But if a credit bureau even suspects you’re using such an agency, it’s likely they’ll try to discourage you from doing so. In some cases they’ll even go so far as to send you a letter stating that use of such agencies is illegal.

Such statements are (to put it as politely as possible) garbage! In fact there are laws that regulate such agencies. Now laws don’t exist to regulate illegal activity, except to ban it! When was the last time you saw laws that regulate what cocaine dealers must do to operate within the law?

Once again, repairing a bad credit report just isn’t in the best interest of the major credit bureaus. But unless you happen to be the CEO of one of those bureaus, the most important question as far as you’re concerned is “What’s in MY best interest?”

First of all, get a copy of your credit report and examine it. You can get a free copy of your report at http://www.annualcreditreport.com.

Secondly, take steps to improve your credit report. You can go about it in one of two ways.

1. Hire third party help.

If repairing your own credit report sounds too intimidating, there are plenty of credit repair agencies that will do it for you. But if you take this approach, there are three things you need to know.

First, they’re not cheap. Expect to pay from $2,500 to $5,000 for an attorney or $795 to $2,000 or more for a credit repair agency. Secondly, they don’t always do it right! Some will manage to get the negative data on your credit report removed while actually doing damage to your “credit score” (a calculated number used by creditors to evaluate you credit worthiness.) Finally, many are outright scams!

That’s not to say you shouldn’t hire third party help. If you do your “home work,” ask for references, and carefully select a reputable credit repair agency, you’ll be much better off than if you had done nothing. Still, if you’re willing to do a little work, there’s a much better alternative.

2. Repair you own credit report.

Anyone can fix their own credit report. If you can write a few letters, address, stamp, and mail them you can repair your own credit. There’re plenty of good books available that can walk you thought the whole procedure, and once you’re done a little study, you’ll be surprised at how simple the process is.

Bad credit will cost you many thousands of dollars and limitless anxiety. Even if you have fair credit, fixing you credit could still save you thousands in interest payments over the years.

Get a good book on the topic of credit repair, and get started fixing your credit report today! And don’t be intimidated by the credit bureaus. Remember, the law is on YOUR side!

New case law out of the Seventh Circuit Court of Appeals

According to a recent ruling by the United States Court of Appeals for the Seventh Circuit, sovereign immunity does not apply to protect the federal government from credit reporting violations.

The federal government is protected against individual lawsuits in all cases except where Congress explicitly states the immunity has been lifted. The question in the case, Talley v. United States Department of Agriculture, was whether Congress waived the federal government’s immunity in the Fair Credit Reporting Act.


The FCRA was amended in 1996 to apply to all "persons", with no mention either way as to whether its definition of a "person" included the federal government.  The U.S. Department of Agriculture argued that Congress did not intend to do away with sovereign immunity when it amended the FCRA.

“You are asking us to presume that Congress is a bunch of blithering idiots,” responded Chief Judge Frank Easterbrook. He added that “Congress is presumed to know what is in the statute books when it amends them.”  He added that “because Congress need not add ‘we really mean it!’ to make statues effectual, and because courts don’t interpret statues to blot out whole phrases, that line of argument has poor prospects.”

Potential Blue Cross ID Theft Victims Top 500,000

Look out, former and current members of Blue Cross and Blue Shield of Tennessee.  Another 301,628 of you are going to find out shortly that you may be another victim of identity theft.  Don't worry, you've got company, as 220,133 people were already notified of their potential fate.

Last year, computer hard drives were stolen that happened to contain the personal identifiers and other information regarding over 500,000 members of Blue Cross/Blue Shield of Tennessee.

Blue Cross is offering free credit and ID remediation to those potentially affected.  Whoop tee do.  That's like offering a condom to a pregnant woman.  Nice gesture, but a little bit ineffective at this point.

Blue Cross should be offering these people cold hard cash for the worry and stress of potentially being a victim of identity theft.  These people paid good money to Blue Cross to insure them.  Blue Cross, they trusted you to keep their personal identifiers and medical information secure.  But you didn't.  Now over 500,000 people are at risk of one of the worst things that can happen to anyone, losing their good name due to the fault of another. 

I bet if the big wigs at Blue Cross had their identity stolen, they would be the first to balk at "free credit and ID remediation" and demand real justice.  Now lets see if they will step up for their customers.

Identity Theft Ruins Man's Life

Here's a pretty bad but fairly typical account of what an identity theft victim goes through -

In fewer than six months, some $900,000 in merchandise, gambling and telephone-services charges were siphoned out of his debit card. His attempts to salvage his finances have cost him nearly $100,000 and have bled dry his savings and retirement accounts. His credit score, once a strong 780, has been decimated. And his identity -- Social Security number, address, phone numbers, even historical information -- is still being used in attempts to open credit cards and bank accounts.


"I have no identity," said Crouse, 56. "I have no legacy. My identity is public knowledge and even though it's ruined, they're still using it.

"It really ruined me," he said. "It ruined me financially and emotionally."

Crouse is among the 11.1 million adults -- one in every 20 U.S. adults -- last year who have the dubious distinction of breaking the record of the number of identity-fraud victims in the U.S., according to a recent study by Javelin Strategy and Research. That figure is up 12% over 2008 and is 37% ahead of 2007. The cost to the victims: a collective $54 billion.

"The odds have never been higher for becoming a fraud victim," said James Van Dyke, Javelin president and founder. "It's an easy crime to perpetrate, a crime that's almost impossible to catch when done in a sophisticated manner and a crime in which enforcement is very limited."

Endless paperwork

Crouse can attest to that. Once an avid fan of online shopping and banking, the Bowie, Md., resident would auction on eBay.com, download songs from iMesh.com and use his ATM card like a credit card.

He first noticed suspicious activity in his account in February of 2009 for small charges of $37 or $17.98. He had a full-time job then and was spending out of an account that generally held $30,000.

"All of a sudden it really got bad," he said. "In August the charges hit big time -- $600, $500, $100, $200 - all adding up from $2,800 to $3,200 in one day."

He called his bank immediately and started what began a tiresome process of filling out what he said finally amounted to about 20 affidavits swearing that he was not responsible for the charges. He said one day he filled out an affidavit about a charge and the next day the bank had accepted similar charges approaching $4,000.

"At that point I was going to the bank every day and looking at everything," he said. He had the time then. Five months before that he had been laid off his $180,000 a year construction-industry job.

Now he was in a double bind: His $2,300 a week net income had dwindled to $780 in unemployment checks every two weeks and his accounts were getting drained daily -- even after he closed his debit account.

He opened a new account at a new bank and the next day both accounts got hit with a $1,100 charge. The new bank told him it was keystroke malware that had likely done him in. Someone had hacked into one of the sites he visited regularly, his computer got infected and picked up all his personal information by tracking every key he struck.

While much of the fraud came from online purchases and at gambling sites, there were new accounts opened in different names but linked to his bank account. There was one purchase of a plasma TV from a Best Buy in Florida that was shipped to a Brooklyn. N.Y., address. In another case a woman in North Carolina was writing out checks tied to his account.

"It was nasty," he said, admitting that he even contemplated suicide. "I just couldn't take it. I didn't feel like a man anymore. I was violated and I didn't know what to do."

High-value targets

Identity thieves steal mostly through two means, according to Michael Stanfield, chief executive of Intersections Inc., a risk-management firm. They take an established address and phone number of an identity that "has some value," he said, like a doctor or a lawyer. In many instances, they can go to the Internet and acquire the matching Social Security number for as little as $50. They then have enough information to get an address changed with your bank account or a credit card account. They apply for new accounts as you.

For the rest of the article, see here - http://www.marketwatch.com/story/the-rise-of-identity-theft-one-mans-nightmare-2010-02-10