Michigan Collection Law Blog

I just came across a great article written by Consumer Reports. It talked about information other than credit data that is gathered by other agencies about you. For example, insurance claims that you have made are collected by a company called ChoicePoint. Insurance companies use this information when creating quotes for your home and auto insurance. You have a right to see what is in your file. Go to www.choicetrust.com to obtain your ChoicePoint file. This report is subjected to the Fair Credit Reporting Act, so you can obtain a free copy of your report, once a year.

Another repository of information about you is your health information at MIB Group. Its a consortium of 470 U.S. and Canadian companies that sell health, life and other insurance. They keep records related to insurance examination that you have had and prescription drugs that you have used in the past five years. This report is also subjected to the Fair Credit Reporting Act, so you can obtain a free copy of your report, once a year.

Your checking account is now monitored by consumer credit reporting agencies such as Telecheck and Chex Systems. Recently, my in laws purchased a condo in Florida and went to the local bank to open a checking account. They were astounded to learn that the bank pulled their consumer credit report with Trans Union as a condition to opening an account for them. I have come to learn that this is no isolated incident. I noticed that my bank is now pulling consumer credit reports on all new customers. Anyways, both Telecheck and Chex Systems reports are governed by the FCRA and you should pull your reports with those companies at least once a year.

Purchase Returns....yes stuff you buy and return is now being tracked by The Retail Equation. Some stores, before accepting a return, are running their customers' drivers licenses through this database. I don't believe that a store can deny someone the right to return something because that particular customer has a habit of purchasing and returning. You see, when you purchase something at a store, you are entering into a contract. If that contract allows you to return something within a specified period of time, and you comply, the store will just have to grin and accept the return. You can find out what your return profile looks like at www.theretailequation.com/consumers.

Your rental history is kept at First Advantage SafeRent. Its a database of 34 million records and is used to help landlords decide whether to lease an apartment or not. This is covered by the FCRA and you have a right to see whats in that file.

Moral of the Story - There is an incredible amount of information about you out there. Most of these databases did not exist ten years ago. Today, they not only exist, but as a consumer, you have a duty to yourself and your family, to know what information about you is floating around. You see, just because its all computerized does not mean that it is necessarily accurate. Congress, through the Fair Credit Reporting Act, has opened the door and given you a right to protect yourself. As a good consumer, its your job to walk through that passageway.

My cousin, Aubrey Tobin, is a lawyer. He recently sent me the following email regarding tips as to how to avoid being a victim of identity theft. I thought it was worth passing on to you. He said:

Read this and make a copy for your files in case you need to refer to it someday. Maybe we should all take some of his advice! A corporate Attorney sent the following out to the employees in his company.

1. Do not sign the back of your credit cards. Instead, put "PHOTO ID REQUIRED" or "SEE ID."

2. When you are writing checks to pay on your credit card accounts, DO NOT put the complete account number on the "For" line. Instead, just put the last four numbers. Your credit card company knows the rest of the number, and anyone who might be handling your check as it passes through all the check processing channels won't have access to it.

3. Put your work phone number on your checks instead of your home phone. If you have a P.O. Box use that instead of your home address. If you do not have a P.O. Box, use your work address. Never have your social security number printed on your checks. You can add it if it is necessary.

4. Place the contents of your wallet on a photocopy machine. Do both sides of each license, credit card, etc. You will know what you had in your wallet and all of the account numbers and phone numbers to Call and cancel. Keep the photocopy in a safe place.

Also carry a photocopy of your passport when you travel either here or abroad. We've all heard horror stories about fraud that's committed on us in stealing a name, address, social security number, credit cards.

The attorney that originally wrote this had his wallet stolen. Within a week, the thieve(s) ordered an expensive monthly cell phone package, applied for a VISA credit card, had a credit line approved to buy a Gateway computer, received a PIN number from DMV to change my driving record information online, and more.

But here's some critical information to limit the damage in case this happens to you or someone you know:

5. We have been told we should cancel our credit cards immediately. But the key is having the toll free numbers and your card Numbers handy so you know whom to call. Keep those where you can find them.

6. File a police report immediately in the jurisdiction where your credit cards, etc., were stolen. This proves to credit providers you were diligent, and this is a first step toward an Investigation (if there ever is one).


But here's what is perhaps most important of all:

7. Call any one of the national credit reporting organizations, Experian, Trans Union, or Equifax immediately to place a fraud alert on your name. By placing a temporary fraud alert on one of your credit reports, you have effectively notified all three bureaus as the one that you have notified is required to notify the others as well. You should also call the Social Security Fraud Department. I had never heard of doing that until advised by a bank that called to tell me an application for credit was made over the internet in my name. The alert means any company that checks your credit knows your information was stolen, and they have to contact you by phone to authorize new credit.

By the time the attorney who originally wrote this was advised to do this, (almost two weeks after the theft of his wallet), the damage had been done. There are records of all the credit checks initiated by the thieves' purchases, none of which he knew about before placing the alert. Since then, no additional damage has been done. It seems to have stopped them dead in their tracks.

Now, here are the numbers you always need to contact about your wallet, etc., has been stolen:

1.) Equifax: 800-525-6285

2.) Experian 888-397-3742

3.) Trans Union : 800-6807289

4.) Social Security Administration (fraud line): 800-269-0271

We pass along jokes on the Internet; we pass along just about everything.

If you are willing to pass this information along, it could really help someone that you care about.

Aubrey H. Tobin
Attorney at Law, P.C.
2140 Walnut Lake Road
West Bloomfield, MI 48323
Telephone: 248.932.3070
Telecopier: 248.855.0430

My cousin Aubrey is older than I. As we were kids, he always looked out for me. He still does which is why I love him. Please heed my cousin's advice as it is sound and keep these numbers handy.

Being the conscientious person you are, you have decided to pull your credit report at www.annualcreditreport.com and you noticed that there is a trade line that does not belong to you. So what do you do? You go on line with the credit reporting agency and posit a dispute to that item. Because you are follower of my blog, you know that under the Fair Credit Reporting Act, that the credit reporting agency has 30 short days within which to conduct a reasonable reinvestigation into that item. During that 30 day period, if the agency is unable to verify that item, it must remove that item. No problem, right? WRONG! You see, credit reporting agencies verify only 3 bits of information on a consumer credit report:

Your name;
Your address; and
Your social security number.

If these three items match the data in the lender's data base, then the credit reporting agency has considered its job done. Don't believe that this actually happens? Check out this whiny guy's, blog post. He complains that Experian would not believe him that a judgment against the defendant with the same name as his, was not his judgment. What he does NOT realize is:

a. That judgment sitting on his credit report is sinking his score faster that rock in water;
b. The only way he is going to get that judgment removed from his credit report is with a lawsuit;
c. a lawsuit against the credit reporting agency will cost him nothing to pursue because under the FCRA, the defendant has to pay his attorneys' fees;
d. He only has two years from the date that he discovered the judgment on his credit report to file that lawsuit.

MORAL OF THE STORY TO CONSUMERS:

a. When you discover something on your credit report that does not belong on it, posit your dispute immediately.
b. If (o.k., when) the credit reporting agency confirms the trade line as belonging on your report, go hire a credit and collection attorney, immediately. You only have two years to file that lawsuit.
c. An experienced credit and collection attorney will charge you nothing to file and pursue that lawsuit for you because under the Fair Credit Reporting Act, the defendants have to pay your costs and attorneys' fees.

Now, you are far smarter and more educated than whiny man. Go forth and protect your credit score.

An article recently appeared in the Detroit Free Press about a couple who trade in their recreational vehicle with what they thought was a sound dealer. Indeed, Walt Michal's RV has been around for a long time, dealing in RVs. When the happy couple trade in their old RV that had a lien on it from the prior lender, for a new RV, they counted on the Walt Michals to pay off the loan balance of about $180,000. That did not happen. Walt Michals went out of business without paying off the lien on the old RV and now the couple is on the hook for the old loan and the new loan. This has been financially devastating to the couple and has completely trashed their credit score because they have not been able to keep up with the old payment as well as the new one. Worse yet, they probably have no rights under the Fair Credit Reporting Act that could be used to clean up their credit score.

This is not an anomalous issue. Some of my colleagues have sued car dealers over this same issue. So how do you protect yourself?

When trading in a vehicle for a new one, tell the dealer that you will turn the title to the vehicle over to the bank and not the dealer. When the dealer pays the bank off, the dealer can then take title to vehicle. If the bank is out of state, then use a local bank to act as an escrow agent. The dealer may balk at this and accuse you of not trusting them. That's o.k. If the dealer is solvent and truly intends to pay off the loan on the trade in vehicle, it will understand and should agree to this escrow arrangement. You can leave the vehicle with the dealer and if anything happens to it, your insurance company should stand behind you. For example, if the dealer moves, transfers or hides the vehicle while going out of business, that vehicle is now stolen as you still have the title in your name.

MORAL OF THE STORY - In these horrible economic times, you can no longer take it for granted that the dealer that had built up all sorts of good will in your community is still a viable entity. Do NOT turn over the titles to vehicles to a dealer without protecting yourself

I have had the displeasure of suing a collection agent and agency that I had done work for a number of years ago. Why? The agency (which is owned by the agent) sent out a bad check demand letter to client that did not contain all of the requirements of MCL 600.2952. This statute requires that bad check demand letters have certain information contained in them. Because this agency did not comply with this statute, his bad check demand letter necessarily failed to comply with the Fair Debt Collection Practices Act. While he made what appeared to be a good faith attempt to comply with the FDCPA, it was not good enough.

Moral of the story - Debt collectors - Spent some money and get your demand letters reviewed by an attorney. The American Collectors Association and the Michigan Collectors Association are two very good places to start. By not having your letters reviewed by an attorney, you are saving a few dollars and buying a whole lot of risk. Since this is current litigation and I dont think is ever a good idea to talk about current cases, I will leave it alone at that. Word to the wise, my readers!