FCRA


“Asset Recovery Associates” sued for FDCPA and Fair Credit Violations

Financial Credit Service, Inc., also known as “Asset Recovery Associates, Inc.” has been sued in Alabama for violating the Fair Debt Collection Practices Act and Fair Credit Reporting Act. Our client is a recently retired docks worker.  He has good credit, good income, and has made it a practice of […]


Alabama Woman Sues Nationwide Credit Reporting Agencies for False Credit Reporting – Alabama Fair Credit Reporting Attorney Judson E. Crump

Fair Credit Reporting Act Lawsuit Filed against TransUnion, Experian, and JPMorgan Chase Bank On June 21, 2017, we filed the case of Savage v. Chase, TransUnion, & Equifax in the United States District Court for the Southern District of Alabama.  Our client was the victim of identity theft.  Somehow, an unknown individual […]


A Few Reasons to NEVER Hire a Credit Repair Service – Alabama Consumer Credit Attorney Judson E. Crump 1

Almost All Credit Repair Services Are Scams.  Don’t fall for them. In fact, in my years of representing debtors and counseling people in financial trouble, I have never seen a credit repair service that was not a scam.  But if they’re all scams, why are they so popular?  There are […]


“If you have a bill in collections that is dragging down your credit score, chances are high that it’s medical.”

So says a recent Washington Post article about the US Consumer Financial Protection Bureau’s recent study of medical bill collections.

The study found that over half of the delinquent accounts that are reported against US citizens’ credit reports were medical bills.  And there were a LOT of people – about 15 million – whose only delinquent account on their credit report was a medical bill.

Medical bills are often hard to prove.  Very often, there is no written contract.  The provider may have not submitted the bill to insurance properly or timely, and therefore lost the right to collect from insurance and instead just decides to try to collect directly from the patient.

And a short visit to a single hospital can spawn a dozen separate bills – one from the hospital, one from each lab that handled your blood, one from each doctor who either saw you or your X-rays, one from a pharmacy, and God knows what else.  You may have never encountered these people and have no idea who they are, but they’re still asking you for money.

And if you ask for verification of the amount allegedly owed, you may not ever get any information.  The whole process is very mechanical and there’s often little to no human involvement in the collection process.

So what do you do if you have strange or inflated medical bills showing up in your credit report?

First, you should contact the medical provider and ask for an itemization of the bill.  How much are they charging you and why?  Will they give you a discount for what your insurer won’t cover?

Second, you should send a written dispute to the credit reporting agencies.  Tell them how much you legitimately owe and ask them to report nothing more than that.

Third, NEVER pay money just to get something off your credit report. A LOT of collection agencies report bogus amounts just to coerce you into paying.  If you owe a hospital $60, a collector may report that you owe $100, just because they’re betting that you’ll pay them the full amount to clean up your credit records.  Don’t fall for this.

Fourth, don’t be afraid to challenge them if they’re asking you for an unreasonable amount.  If they were to take you to court, they’d have to prove that the charges were reasonable and medically necessary. If they inflate the ‘price’ of services to compensate for discounts they provide to insurers, then they can’t just force you to pay whatever they want to put on some bill.


Adverse Action: What it means, Why it matters. (VIDEO) Alabama Consumer Credit Attorney Judson E Crump

Whenever you Apply for Credit or any sort of Installment Loan, you are supposed to receive a written notice from the creditor telling you if you were approved, denied, or given a counter-offer.  This is more important than you think.  Here’s why.

There’s this thing called the Adverse Action Notice.  It’s a letter that anyone who receives a consumer credit application must send to the applicant if they do anything but approve their application on the terms requested.  Here’s what they look like:

This one complies with FCRA and ECOA - it tells the applicant that he doesn't have enough credit history to get approved for the loan he wanted.

This one complies with FCRA and ECOA – it tells the applicant that he doesn’t have enough credit history to get approved for the loan he wanted.

This letter was sent to a client who had no idea that she'd ever applied for a loan with Cap One.  She went with another finance company because the car dealer didn't tell her about Cap One's offer.

This letter was sent to a client who had no idea that she’d ever applied for a loan with Cap One. She went with another finance company because the car dealer didn’t tell her about Cap One’s offer.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Both the Equal Credit Opportunity Act (ECOA) and the Fair Credit Reporting Act require adverse action notices, but the same letter can serve both purposes, and the ECOA requirements are more important.

Just like the name says, the Equal Credit Opportunity Act was originally intended to prevent credit discrimination by forcing creditors to tell people the real reason why they were denied a loan or offered a 12% interest rate when everybody else got a 7% interest rate.  It’s really hard to discriminate against divorcees or blacks if you’re not allowed to just deny without an explanation.  It still does this, though I like to think that our society has progressed beyond the point of people being mistreated solely because of their color, sex, religion, or whatever.

But the Adverse Action Notice has two very important functions that Congress probably didn’t foresee back in 1974.

1.  It alerts you to problems with your credit report.  Because the adverse action notice has to tell you why you were denied, (i.e. “You have too much debt already.”), it can alert you to credit problems that you didn’t know you had.  For instance, if you get a denial letter that says your auto loan application was denied because you had “Too many recent inquiries,” and you know for a fact that you haven’t applied for any sort of credit in 2 years, then you know that something is wrong, and you’ve been alerted to a possible identity theft issue that you need to take care of ASAP.

2.  It warns you of fraud by potential creditors and salespeople.  This happens most often in the context of auto sales, but it can just as easily happen with mortgage lending (where there are much bigger consequences).  How?  I’ll use an example to show you why.  You go to a car dealer shopping for a car.  You pick one or two models you’re interested in and you offer a $3,000 down payment and you ask to finance the remaining $18,000 at 8% APR over 48 months.  You fill out a credit application and you hand it to the dealer.  He uploads it to his computer system and submits the loan to potential finance companies.

What’s supposed to happen next is this: he sends your application to a four potential lenders, and they respond.  Whichever one gives you the best deal gets the contract.  You get the car.  The dealer sells a car.  The finance company gets a new customer paying them 8% APR for their loan.

But what can (and sometimes does) happen is this: three lenders reply, two of them offer you financing at 9%, and the other offers you financing at 12%, but is willing to finance a bunch of junk charges like a $1800 service contract that cost the dealer $600 and pay the dealer a bonus $500 for sending you their way.  The dealer then tells you that you’ve been approved for 12%, and that’s all they can do.  You believe him and you take the deal.

30 days later, you get two letters from finance companies you never heard of, announcing that they got your applications, but only offered you 9%, and that they haven’t heard from you since then.  You think WTH?  I signed up for 12% when I could have gotten 9%?  So now you know you’ve been screwed.  That’s what is supposed to happen. Now you can do something about it.  Like calling a lawyer in Alabama who can help you take action to defend your rights.


Video Q&A: The cleverest corporations that break consumer protection laws: Credit Bureaus – Alabama Credit Attorney Judson E Crump

Alabama Credit Reporting Attorney Judson E. Crump discusses why he thinks credit bureaus are relatively smart businesses to fight in court.

To summarize:

Though the major consumer reporting agencies* make mistakes all the time, actually taking them to court can be tricky because they are specialized in their field and have experience from decades of business and thousands of lawsuits behind them. They know how to deal with FCRA litigation, have very good professional witnesses, and don’t hire bad law firms.

Proceed cautiously, but don’t be intimidated.

*credit bureaus, credit report companies, credit reporters, these all are defined by 15 U.S.C. 1681 – the Fair Credit Reporting Act – as “consumer reporting agencies,” so that is the term I use for them as well.


Is a lender or finance company required to tell you why you were denied credit in Alabama? – Alabama Consumer Credit Attorney Judson E Crump

Absolutely.  And they have to tell the truth as well. Whenever you apply for credit – be it an automobile loan, a credit card, a home mortgage, refinance, or any other sort of credit, the Equal Credit Opportunity Act requires the lender to do two things: 1) they must notify […]


Fixing Identity Theft, Part Three: When to Hire a Lawyer – Alabama Consumer Credit Attorney Judson E Crump

So you’ve written a dispute to the creditor or debt collector who is asking you to pay money on an account you never opened or for purchases you never made.  And you’ve placed an initial fraud alert on your credit reports and reviewed them and written dispute letters to the […]


Dealing with Identity Theft, Part Two: Fixing your Credit Reports – Alabama Consumer Credit Attorney Judson E Crump 2

2.  Contact a Credit Reporting Agency and Place an Initial Fraud Alert If you’ve been the victim of Identity Theft, you are entitled to a free credit report from each of the major credit bureaus.  First, though, you have to place an initial fraud alert with one of the them, […]


How do you respond to identity theft? Part One. – Alabama Consumer Credit Attorney Judson E Crump 2

Identity theft is no joke.  It happens all the time and it will probably happen to you at least once before you die. Identity theft can come in various forms, but the most common (and, fortunately, the least seriously damaging) is when the identity thief somehow obtains enough of your […]