Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, September 12, 1995 TAG: 9509120080
SECTION: BUSINESS PAGE: B-6 EDITION: NEW RIVER VALLEY
SOURCE: Associated Press
DATELINE: BOSTON LENGTH: Medium
The retired postal clerk wanted to help one of his kids, and instead of dipping into his own considerable savings he sought a $1,500 loan. But a credit agency reported an outstanding balance on a credit card he didn't own.
It took Sullivan a year and several lawyer's letters to clear his record.
On Monday, consumer advocates hailed a new Massachusetts law as the toughest credit reporting reform in the nation, saying it will save others from Sullivan's nightmare.
The law, which goes into effect Jan. 31, makes Massachusetts the first state to hold providers of credit information, and not just the credit reporting services, liable for mistakes on a consumer's credit report. Providers can be sued if they make a mistake and don't have systems in place to ensure accuracy.
``It is the strongest, in many ways, passed by any state legislature,'' said Edmund Mierzwinski, spokesman for the U.S. Public Interest Research Group in Washington.
Reporting agencies will have to provide one free report per year to any consumer who requests it. They will also have to investigate and correct any errors within 30 business days of receiving a complaint, and set up a toll-free number for inquiries.
``For too many years, the message to consumers who have been wrongly denied credit by credit reporting agencies has been, `Don't call, don't write, we don't care,''' said one of the sponsors, Democratic state Sen. Lois Pines.
Credit report errors accounted for 49 percent of all complaints to the Federal Trade Commission in 1991, and 20 percent of those were serious enough that a consumer was denied credit, lost a mortgage or was turned down for a job.
TRW Inc., one of the country's biggest credit-reporting services, admitted in 1991 that as many as 1,500 consumers in New Hampshire and Vermont had trouble getting credit because of erroneous information in their files.
It was TRW and two other agencies, Equifax and Trans Union, that told Sullivan's credit union of his $3,600 outstanding balance on a Bank One Visa - a card he never applied for, received or used.
After Sullivan's initial inquiries, Equifax and Trans Union deleted it, but TRW refused.
``It's like slander when they accuse someone falsely without the chance to defend yourself,'' Sullivan said in a telephone interview. ``Of course, I never had any bad debts. I never had anybody come after me before. Their mistake really hit me hard.''
Marty Dee, a TRW spokesman in Orange, Calif., said the company has been following the practices spelled out in the Massachusetts law.
``We think they're all good ideas,'' Dee said.
Maryland and Vermont also give people free access to credit reports.
Memo: NOTE: Shorter version ran in Metro edition.