I just read Denise Richardson’s book, Give Me Back My Credit, this weekend. You probably never heard of Denise because she is not a professional author; rather she is a working person like the rest of us. She is a mother and wife who was abused at the hands of the credit industry. Denise’s book gave me an education about various tricks and traps by which she had been victimized. I have received Denise’s permission to share some of items from her book with you. I am passing these on to you because in my years as a consumer rights attorney, I had never seen such horrific abuse hurled on a person as to which Denise had been subjected. I encourage you to purchase a copy of her book on Amazon.com. That’s where I got my copy. It’s a fast and fascinating read.
About Denise…in a nutshell
Before her mortgage debacle began (described below), Denise never had any credit issues.
She worked hard, paid her bills on time. Her first credit problem arose when she made additional payments on her mortgage, to retire that debt early. Denise is a responsible and hard working woman, like many of us are. This is what scared me most about her story. Denise could be my neighbor, family member and yet what befell her and her credit was “out of blue.” She did nothing to deserve these abuses.
Putting her credit issues aside, I read the story of a woman abused by corporate behemoths; classic David and Goliath tales. Denise did not take any of this lying down. Instead, she hired an attorney, fought back and prevailed. I see Denise as a very real person, pushed to the bring who came back in a very powerful way. In my next few blog posts, I am going to describe each of Denise’s travails and the lessons you need to learn from them.
DENISE’S FIRST PITFALL – SHE ATTEMPTED TO PAY OFF HER MORTGAGE AHEAD OF TIME BY PAYING EXTRA EVERY MONTH.
In the early 1990s, Denise was a paralegal and worked for law firms in their real estate departments. Denise learned that by paying some extra money towards her mortgage every month, she could pay off the loan far earlier and shave off tens of thousands of dollars of interest over its life. Great idea, right? After making several such additional payments, Denise contacted her bank to find out her balance and get a new anticipated payoff date. Would you believe that her bank told her that instead of reducing her principal balance, that she was actually making her monthly payments several months in advance? Instead of crediting her loan balance for the additional payments, they simply helped themselves to additional interest by characterizing those additional payments as pre-paid interest. She tried on several occasions to talk to people at the bank about this problem. However, her efforts were rewarded with the bank telling her to “hold off” making any more payments until they straightened out her account. When she did as she was asked, they reported her as delinquent to the credit reporting agencies!
She trusted that bank and yet they simply helped themselves to her pocketbook while destroying her good name and credit.
Denise ultimately had to file a lawsuit against the bank to make it get its number right. Still, I don’t know that they bank ever accomplished that. Meanwhile, the bank had demolished Denise’s otherwise excellent credit report in the process.
Here are the lessons you need to learn from Denise’s plight:
1. If it could happen to Denise, it could happen to you. Before her life was turned upside down by these credit issues, Denise is no different than the rest of us. She was a mother and wife who held down a full time job trying to keep a roof over her families’ head and food on their table. She did nothing wrong. She simply wanted to pay her mortgage loan off early and was taken advantage of by her bank. If her bank could take advantage of her as it had, your bank could do the same thing to you or me. It is important for us to stay vigilant. Get a copy of your loan amortization (payment schedule). Look at how the bank has applied your payments. Do an independent calculation to make sure that the principal balance on your loan is going down as it should.
2. Don’t be lulled into complacency by your bank just because it is a bank. Know that banks make mistakes. Banks don’t make mistakes! You think not? I can tell you from personal experience that several years ago, I had a particular American Express account that I paid off every month. One time, I got a bill from AE showing that I had not paid the previous month’s bill. I called AE and faxed them a copy of the canceled check, front and bank. This was purely its mistake. I know of plenty of far more serious bank screw ups because I sue banks for violation of the Fair Credit Reporting Act . Do not think that just because your bank is an large and venerable institution that it does not make mistakes or set policies that work to your detriment.
3. If you have a credit issue with your bank, get it be resolved quickly. If you wait for a positive outcome to your credit dispute, chances are excellent that your credit will get shredded as you wait. As I reflected on Denise’s credit issues with her bank, I wondered how much differently her life and stress level would have fared if she had been quicker on the draw with a lawsuit. I can tell you from experience, nothing motivates a large institutions into action quicker than a lawsuit. A court summons usually has the effect of getting the attention of the “right people” and their bosses. Don’t wait for a resolution….force a resolution.
4. Hire the right kind of attorney to handle your credit and collection issues. OK, if there was one mistake that Denise made in this debacle, it’s that she originally hired the wrong attorney for her lawsuit. Her first attorney (Lets call her “Attorney 1”) had no idea what she was doing in the case and took no discovery. Attorney 1 had no experience or background in litigating Fair Credit Reporting Act cases. Denise eventually hired a second attorney (after Attorney One quit) to pursue her claim against the bank. Banks usually have a lot of money and hire very experienced and expensive attorneys from large law firms who have entire departments of lawyers who handle these kinds of cases. Attorney One was simply outclassed, inexperienced to take on the bank’s attorneys. The bank’s attorneys knew of their advantage the moment that they read the complaint. Denise should have hired an attorney that routinely files consumer type lawsuits under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. In every state there are a small number of Plaintiff’s attorneys who bring these kinds of lawsuits. The banks’ lawyers know who these Plaintiffs’ attorneys are and usually work to quickly resolve the lawsuit. In Denise’s case, if the bank’s attorneys knew and respected Denise’s attorney and her work, the case would have been resolved in a much shorter time period. If you are involved in a consumer dispute, check out your attorney’s background and experience first. Do not shop based on price; but on experience. If you have a decent case, your attorney will not charge you a dime for it; he will look to the defendants to pay your fees and costs as that is what the law allows.
5. If you are a consumer, you owe it to yourself and your family to get educated on consumer type issues. Denise Richardson is a consumer credit advocate. She posts a lot of good information on her website at givemebackmycredit.com. I am a consumer rights attorney and post a lot of good information as well on our blog which you are reading now as well as on our website at Michigan Consumer Credit Lawyers. Do not blindly trust the large institutions with which you are doing business. They may be old and venerable, but they make mistakes and fashion policies that may be harmful to you. It’s your job to protect yourself; not theirs. Denise and I are here to help.
If you have been victimized by a debt collector or have items on your credit report that are incorrect, call or email Attorney Gary Nitzkin for a free consultation at (888) 293-2882. For more information about your credit rights as a consumer, visit our blog at www.micreditlawyer.com/blog. Visit our website at www.micreditlawyer.com.