The FTC has gone to great lengths to help make the FCRA work better for the consumer. The commission has set in place methods to review and improve how the credit bureaus handle secondary disputes.

A secondary dispute is usually when a consumer is not satisfied with the results of an investigation by a CRA (credit reporting agency).

The CRA are always being reviewed by the commission on how it can better serve consumers and reduce the number of inaccurate credit reports. Clearly, errors in our credit reports are serious business and can cost consumers millions in higher interest rates, job denials, loan turn downs and humiliation.

The Federal Trade Commission has issued a report to Congress on the credit report complaint referral program under the Fair Credit Reporting Act (FCRA).

The Commission is the federal agency with primary responsibility for compliance with the FCRA and operates a system for receiving complaints from consumers about possible violations of the FCRA.

Section 611(e) of the FCRA, which was added by Congress in the Fair and Accurate Credit Transactions Act of 2003 (FACT Act), requires the Commission to establish a program to refer certain consumer complaints to the three nationwide consumer reporting agencies (CRAs) – TransUnion, Equifax, and Experian – and to report to Congress on the information gathered in the program.

The complaints covered by the program are those received by the Commission from consumers who have disputed the accuracy of information in their credit report with a CRA and are dissatisfied with the results of the process. This report covers the period from the initiation of the program in 2004 through the end of 2007.

If a consumer is dissatisfied with an investigation result, they can ask for a further review by the CRA but when that review results in no additional findings or changes, the consumer is usually left to accept the decision.

The commission is working to change that by reviewing the number of complaints they received about secondary disputes and seeing where it can be improved. Obviously there is still a big problem with the accuracy of the credit reports as shown by the number of complaints filed with the FTC from 2004 to 2007.

The report composed by the FTC  listed the number of complaints, the corrections eventually made and the number of complaints still standing.

Hopefully with the aid of the FTC and the FACTA, consumers will find secondary disputes an easier process in the years coming and thus the complaints with the FTC will decline.

The commission found, in its final report that improvement is still very much needed when it comes to secondary disputes, as you can see by the numbers in the report.

Good for us, more work for the bureaus. To learn more about handling your credit reports, see our  credit library.

Credit “Repair” Company Agrees to Settle FTC Charges; Company Made False Claims About Its Credit Repair Services

A credit repair company that lured consumers with false claims for credit repair services and required advance payment ranging from $500 to as much as $2,500 has agreed to settle Federal Trade Commission charges that it violated federal law. The agency filed the charges in July as part of “Operation Clean Sweep,” a crackdown on credit repair operations.

The proposed settlement bars the defendants from making deceptive claims when marketing any product or service, including credit repair services. The settlement also bars them from violating the Credit Repair Organizations Act and specifically prohibits the defendants from: (1) claiming that a credit repair organization can permanently remove negative information from consumers’ credit reports, even when the information is accurate and not obsolete; (2) requiring advance payment for credit repair services; (3) failing to provide a written statement of “Consumer Credit File Rights Under State and Federal Law” before any agreement is signed; (4) failing to include in their contract conspicuous statements about the consumer’s right to cancel without penalty or obligation within three business days; and (5) failing to provide a written “Notice of Cancellation” for consumers to use when exercising their cancellation rights.

In addition, the settlement bars the defendants from collecting money from consumers who purchased services from the defendants before July 10, 2008, and from disclosing or benefitting from customers’ personally identifiable or financial information. The defendants are also prohibited from violating the Fair Credit Practices Act and the FTC’s Disposal Rule by failing to take reasonable measures to protect consumers’ personally identifiable information during its disposal.

The settlement imposes a judgment for consumer redress of $210,000, which is suspended due to the defendants’ inability to pay. The full judgment will be imposed if the defendants are found to have misrepresented their financial condition. The settlement also contains record-keeping provisions to allow the FTC to monitor compliance with the order. The defendants are Payneless Credit Repair, LLC, and its owner, Lesley L. Payne, both located in Richardson, Texas.

The Commission vote to authorize staff to file the stipulated final order was 4-0. The order was filed in the U.S. District Court for the Northern District of Texas, Dallas Division, on December 22, 2008.

NOTE: Stipulated final orders are for settlement purposes only and do not constitute an admission by the defendants of a law violation. A stipulated final order requires approval by the court and has the force of law when signed by the judge. -FTC

This article is written based on an investigation done by 13 News where an elderly couple says they were being hounded for an invalid debt that they did not owe. The entire post can be read here. Unfortunately, once a debt collector gets you in their scope, it can be near impossible to get them to leave you alone as this couple discovered.

The Crabills seem like a nice upstanding couple but in the debt collectors eyes they were deadbeats. The Crabills were being hounded relentlessly day and night by collectors representing CitiFinancial for $20,000.00 in what Citi deemed was an unpaid portion of their refinanced mortgage.

The couple battled the collectors day and night and said the were relentless, especially the calls to their jobs. CitiFinancial eventually sued the couple but they fought back and filed a counter-suit and Citi eventually admitted they were wrong. The Crabills did not owe the balance.

Unfortunately, this type of abuse is all too common. If you are being hounded by debt collectors day and night be sure to use the Fair Debt Collection Practices Act to protect yourself.

You cannot be humiliated into paying a debt nor can you be harassed. The FDCPA lays out exactly what a debt collector can and cannot do to you.

Read the rest and watch video