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Thousands of Consumers May Have Been Denied Because of Credit Report Errors

By Faye Mergel
Published: Thursday, January 14th, 2010

Credit bureaus do not do the dirty works themselves. Instead, they hire people who review public records for them to get more information about consumers. These public record vendors search through local courthouses for judgments against a person, such as delinquencies, repossession, foreclosure, or default. However, some experts warn that those hired sleuths often make mistakes, causing thousands of consumers to be denied of credit or insurance because of erroneous credit report information.

Thousands of Consumers May Have Been Denied Because of Credit Report Errors Equifax is currently facing federal class action lawsuits in Pennsylvania and New Jersey over claims that the credit report issuer has mistakenly tagged negative information on consumer files. The lawsuit filed in Pennsylvania is set to go on trial in a federal courthouse this spring.

Industry specialists note that those paid researchers do not use high-grade personal identification techniques. This increases their probability of attaching negative information to the wrong person if, for instance, there are two people of the same name in a given locale.
These credit report errors can be the reason why thousands of consumers were denied employment or credit, according to Ed Mierwinski, director of the consumer program at the U.S. Public Interest Research Group. He adds that most of those people have difficulty contacting the credit report issuers—Equifax, TransUnion, and Experian—to get their records straight because they are not represented by attorneys. Mierwinski also noted that bureaus often say it is not their fault when there are errors in public records.

Plaintiffs in the class action lawsuits against Equifax claimed the bureau violated the Fair Credit Reporting Act (FCRA) by not fully investigating complaints that it has erroneously attached negative information to a number of people. In both cases, Equifax retorted that it did not double-check the information provided to them by public records vendors since they fully rely on them. In a written statement, Equifax says it has followed “reasonable procedures” to make sure that credit reports are as accurate as possible.

However, consumers believe that credit report issuers need to make better distinctions among people to avoid costly errors. Blackwood, N.J. resident Bruce A. Summerfield was surprised to find out in 2007 that he has not paid a $1,075 balance to AT&T, as revealed by his credit report. It turned out that the debt belonged to Bruce R. Summerfield of Camden County, N.J.
Attorney John Soumilas, who represents the plaintiffs in the two pending cases against Equifax, says there are about 20,000 consumers in Pennsylvania and New Jersey who disputed their credit report, but were not properly guided on how to correct those errors.

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