Last week, the National Consumer Law Center's Chi Chi Wu testified before the House Financial Services Committee on continuing serious problems plaguing the credit reporting industry, including its failure to ensure the accuracy of credit reports. Among other things, the testimony identified these concerns:
- unacceptable error rates and the myriad types of systemic inaccuracies in credit reports;
- the travesty of the automated dispute system used by the credit bureaus;
- the absurdity that credit reports and scores treat consumers who have fallen on hard times as irresponsible deadbeats;
- systemic racial disparities in credit scoring;
- the unfair impact of medical debt on credit reports;
- the problems with use of credit reports for employment purposes, and
- the deficiencies in data security that led to the massive Equifax data breach, which has not yet been adequately addressed.
NCLC called on Congress and regulators to institute these reforms:
- a right of appeals for consumers when they disagree with a furnisher or credit bureau about the results of a dispute investigation;
- stricter matching criteria to ensure that information belonging to one consumer does not get wrongfully mixed into the credit report of another consumer;
- a requirement that credit bureaus devote sufficient resources to the dispute system and a clarification that they must conduct independent analyses instead of simply parroting what furnishers tell them;
- a right to seek court orders to compel credit bureaus to fix reports;
- more control for consumers by requiring that they must proactively authorize the use of their credit reports for credit, insurance and other uses, and
- a publicly-owned alternative to the credit bureaus.
Read NCLC's press release on the testimony, the testimony itself, and NCLC's comprehensive report on the topic entitled Automated Injustice Redux.
Third party junk debt collectors frequently use fraudulent documents to obtain unlawful Judgments from local courts. One of the methods used by illegal debt collectors is improper service of process otherwise known as “Sewer Service”.
Third party junk debt buyers do NOT meet the basic requirements of UCC…purchased for value…usually pennies on the dollar.
State Courts should not be granting default judgments for claims by debt collectors that also include suspect affidavits and debt verification. The inherent and obvious problems with these types of claims should not be acceptable to courts. Most of these cases don’t meet the standards of a valid or legitimate suit against a consumer.
Third party junk debt collectors also use credit reporting agencies to threaten consumers to pay these illegal debts, which is akin to paying extortion. Allowing junk debt buyers to use credit reporting agencies for unsubstantiated claims destroying a consumers credit history without recourse is an unfair and unconscionable method of harassment to force consumers to pay debts not owed. Laws should be passed and serious penalties imposed to protect consumers from the threats by third party collectors who NEVER had a relationship with the consumer.