ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, November 4, 1996 TAG: 9611060009
SECTION: MONEY PAGE: 6 EDITION: METRO
DATELINE: NEW YORK
SOURCE: JANE BRYANT QUINN WASHINGTON POST WRITERS GROUP
Here's a reminder to thousands of people who've struggled to fix an error on their credit reports: A new set of amendments to the Fair Credit Reporting Act will take effect 11 months from now. They'll expand your rights and make it easier to enforce the rules.
The credit bureaus have already put many of these changes in force. Some were adopted on a voluntary basis. Others were instituted virtually at gunpoint, after the states or the Federal Trade Commission accused the bureaus of violating the law.
``The new amendments codify the reforms, so they're no longer optional,'' said Ed Mierzwinski of the U.S. Public Interest Research Group in Washington, D.C. The rules will be clear. When they're broken, you can sue.
Of the many problems the new law addresses, two stand out:
Problem one: When you spot an error on your report and complain to the credit bureau, the bureau checks back with the creditor. The creditor (a bank or store) is supposed to investigate the problem.
The ``investigation,'' however, may be a simple check of its records. That won't help if the records are wrong.
In theory, the creditor should struggle to get its records right. But that doesn't always happen. Worse, after your credit report has been straightened out, the mistake may reappear. Under the current FCRA rules, creditors aren't liable for their carelessness.
Problem two: Even if you can prove you're right, the credit bureau can take the creditor's word instead. That's not necessarily what happens, says Norm Magnuson of the Associated Credit Bureaus in Washington, D.C. The big bureaus do accept certain forms of proof from consumers. But they don't have to.
Under the new law, credit bureaus large and small will have to consider your evidence. But what evidence?
Magnuson says the bureaus may accept canceled checks, proving that a debt was paid; a receipt, showing that an item indeed was returned; or a letter on the creditor's stationery, stating that you don't owe the money. The creditor might have sent the letter at your request but never bothered to remove the blot from your record.
Other acceptable evidence may be defined by government regulation or the courts.
The new law says that disputed data removed from your file can't be reinserted unless the creditor certifies that it's accurate. At present, ``certification'' means a letter from the creditor asserting that the debt is owed, Magnuson says.
If disputed data do return to your record, the credit bureaus will have to notify you. Currently, you have to keep checking your credit report to be sure that bad information is kept out.
In an important change, creditors in all states - for the first time - will be liable for violating the FCRA. Right now, state laws make them liable only in California and Massachusetts.
You won't be able to sue your creditors for mistakes. Lawsuits generally will be possible, however, if they don't correct a mistake you've shown them or if they reinsert erroneous data in your file. This should make sloppy creditors careful.
Creditors will have other duties. For example, they'll have to tell the credit bureaus if an account is in dispute and if you closed an account voluntarily (accounts apparently closed by the creditor may work against you).
National credit bureaus will have to supply you a toll-free telephone number staffed by real people. Today, only Trans Union fails to give customers an 800 number for ordering reports.
Many questions remain. For example, what if a court judgment is recorded against you because a crook got a credit card in your name and charged up a storm? Will the credit bureau keep that blot off your record? And what about the credit-scoring systems that decide whether you're a good credit risk? Can they score accounts that are in dispute?
Some bad news: Consumers apparently have lost the national battle for one free credit report a year, from any credit bureau.
Some free reports are available. You're entitled if: (1) you live in Georgia, Massachusetts, Maryland or Vermont; (2) a poor report caused you to be rejected for credit, an apartment, a job or a loan at favorable rates; (3) you have a file at Experian (formerly TRW), the only bureau that voluntarily offers free annual reports. To find out how to get the report, call Experian at (800)682-7654.
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