The Law- Under the Fair Credit Reporting Act (“FCRA“), credit reporting agencies such as Transunion, Experian and Equifax, all have a duty to conduct an investigation into a consumer’s dispute regarding the accuracy or completeness of an item appearing on a consumer’s report. 15 USC 1681i. These items are frequently called “trade lines.” But the sad truth is that when it comes to identity theft, none of the credit reporting agencies conduct a reasonable reinvestigation into the dispute, because they are simply do not have policies and procedures in place to do so.
Lately, I have sued two of the credit reporting agencies and a number of banks under the FCRA. You see, my clients all had their identities stolen by a family member who had access to my clients’ names, address and social security numbers. The identity thief used these bits of information to obtain mortgages in my clients’ names. Even though the id thief has confessed to his crimes, gave depositions admitting to his misdeeds and even went to prison for it, the banks and credit reporting agencies STILL did not remove the derogatory trade lines that were caused by the id thief, from my clients’ credit reports. Pretty amazing, huh? Wait…it gets better.
The credit reporting industry is operating in the stone age. In order for a consumer dispute an item on his credit report, he has to place a dispute with the credit reporting agency. The consumer has to give the agency his name, address and social security and then identify the trade lines that he considers bogus or in error to the CRA. The CRA then has 5 days to pass that information on to the furnisher of that information (“Furnisher”). WIthin 30 days both the CRA and the Furnisher have to conduct their investigation into the consumers dispute or they have to remove the trade line from the consumer’s credit report. Sounds simple right? Here is the RUB…..The CRA and Furnisher compare 3 and only 3 bits of data between just the two of them in order to verify or remove a trade line. They compare the name, address and social security number between in their respective files as those 3 bits of data appear in the other’s records. If these bits of data compare favorably, then the trade line stays on the consumer’s report. I was stunned to learn this.
In the deposition of my clients’ case, I asked both CRAs (who shall remain nameless), how in the world can they detect true identity theft by just comparing those bits of data, and each admitted that their procedures could not detect true identity theft involving a consumers actual name, address and social security number!. But wait, it gets better. Neither of the CRAs allow their investigators to use the internet, the telephone or a fax machine when conducting an investigation into a consumer dispute. That means that the CRA’s investigators cannot go on line to see if there is any validity to a consumer’s dispute that his identity was stolen. The CRA’s investigator cannot check with court records on line or even call the consumer himself to get more details. Each CRA and many Furnishers actually prevent their investigators from conducting reasonable reinvestigations into consumer’s disputes. Unfortunately this leads to only resolution for a consumer who is victimized by an identity thief and is again victimized by a bank and/or a credit reporting agency….litigation.. Hey, I am not just saying this because I am a lawyer who has litigated these cases. I am telling you this because the CRAs do not give their investigators enough resources in today’s electronic age to do their jobs right. It may be because the CRAs get bombarded with disputes on a daily basis and only give their investigators a certain number of minutes to get through a dispute. I can’t tell you why the CRAs do not just call Comcast and pay the $35 monthly fee and hook up their investigators. I can only tell you that the CRAs simply do NOT give their investigators these tools. Hence, until their investigators are provided these basic necessities, the only way to resolve an identity theft issue with the CRA is to file a lawsuit for damages and attorneys’ fees.
If you have to sue a bank and/or a credit reporting agency because they will not remove a trade line from your credit report that does not belong to you, set the stage by taking the following actions:
1. File your dispute with the credit reporting agency. This can be done on line or via first class mail. I would recommend that you do this on line and then make a screen shot of your dispute. By positing this dispute with the credit reporting agency, you begin to set the proverbial ball in motion to pursue both the credit reporting agency and bank under the Fair Credit Reporting Act.
2. Provide the credit reporting agency with as much information as you have to show that the debt is not yours. For example, if you have a police report, send a copy of it to the credit reporting agency. You may have to do this by first class mail. If you do not have a police report, then go get one. The credit reporting agencies are far more likely to take action on your claim with a police report in their hand than without one. Still, a CRA may still ignore your request to remove the trade line.
3. Make copies of everything that you send to the CRA. If you posit your dispute on line, then either take a screen shot of the information you have provided or take copious notes of what you have provided.
4. Remember that if you prevail in the litigation, that the CRA has to pay your attorneys’ fees. Hence, do NOT hesitate to contact an attorney if you believe that a trade line is on your credit report and after contacting the CRA, that that trade line still sits there.