Sandra Chapman/13 Investigates
Indianapolis - Your credit score can unlock the door to buying power, more affordable loans or even a job. But what happens when national reporting agencies get it wrong?
13 Investigates "double reporting" - negative credit marks against you, counted twice. Federal promises to protect consumers are instead failing them, leading some to financial ruin.
"It's your most valued property," said Attorney David Szwak, a national credit expert and Chairman of Consumer Protection with the Louisiana Bar.
The credit reporting agencies have undeniable influence over your credit worthy dreams, or in Terry Bible's case, a credit nightmare.
"Why was this report that was inaccurate released?" Bible, who resides in Indianapolis, asked. "It's ruined me," she said.
It started with plans to refinance her mortgage at a lower interest rate, and to take out a home equity loan.
Within days of closing, the lender backed out.
"They approved me for the loan. They told me not to make my November house payment. Then they came back and said that based on my credit report, having dual accounts and showing a high debt ratio that I was not approved," she explained.
Reports show two agencies gave Terry a passing credit score.
But on the third, she found what credit experts call "split or double reporting."
Bible showed 13 Investigates her credit report. "Two accounts from Beneficial Finance for $28,559."
It was one transaction listed as two open accounts, for the exact same amount.
Bible was told that "TransUnion left off the four numbers and reported the loan 30 days later."
The entries appeared like two different accounts on her credit report, but there was actually only one.
An Easy Fix
Another reseller, Credit Plus, hired by the lender to consolidate the reports from the big three, also put out the same bad information.
"Said that they didn't have the ability to correct it. It had to be corrected on the bureau level, which is TransUnion," said Bible.
But TransUnion and Beneficial blamed Credit Plus. No one took responsibility.
Worse yet, no one fixed the error even though the nation's Fair Credit Reporting Act requires the agencies in question to reinvestigate and correct mistakes.
"The Fair Credit and Reporting Act is a horse and buggy era law in the digital age. I mean, it's a real shame," said Szwak. And according to him, Terry Bible's three-year long credit standoff is not uncommon.
"No, it does not surprise me at all. We've seen cases that go on more than a decade where consumers try in vain to get credit reporting errors corrected to no avail," he told 13 Investigates.
The Federal Trade Commission has received hundreds of complaints over the last year against Trans Union, head-quartered in downtown Chicago. Everything from inaccurate information to improper reinvestigation of disputes and like Terry Bible, complaints over duplicated reports.
"The Federal Trade Commission does an extremely poor job policing the bad guys," added Szwak.
13 Investigates took the complaints to FTC Regional Director Steve Baker, also in Chicago.
"The Fair Credit Reporting Act does provide some important protections for consumers if errors occur, which they do," explained Baker. "We do cases when we think there's a pattern of conduct. We don't bring cases on behalf of individual consumers," explained Baker.
But there is no magic number of complaints or dollar threshold in the FTC's database to trigger a federal investigation. Baker says the last time the agency cracked down on the big three was some 10 years ago.
"Well, if there are those sorts of problems, which of course can occur anytime you've got a huge organization with lots of data, we really strongly encourage people to file consumer complaints with us," Baker added.
Terry Bible and hundreds of others have filed complaints.
13 Investigates asked Baker what happens if the Federal Trade Commission decides not to file charges or even investigates. Baker threw up his hands for a time out.
"You know, I'm done with the subject," he said.
"Are they just left out there? Are they just out of luck?" we questioned.
"I have nothing more to add on it," Baker responded.
With the doors shut at the FTC, Terry Bible found herself turning to U.S. Federal Court.
"When you can't escape the problem, many people turn to bankruptcy as the only option left," said Szwak about the gravity of the situation.
"Very humiliating," said Terry Bible, describing her feelings about having to file bankruptcy. "I mean I sat in the hearing and had tears. And it wasn't tears of relief. I was embarrassed," she said.
Her last hope - a federal lawsuit.
She wants TransUnion, Credit Plus and Beneficial to pay for refusing to correct the mistakes.
But couldn't believe what happened next.
Under federal law, claims arising before the bankruptcy are no longer hers, but the courts.
Her court-appointed trustee agreed on a settlement with TransUnion, Credit Plus and Beneficial.
"I took the position let's get $9,000," said Bankruptcy Trustee Paul Gresk.
Each company will pay $3,000 without admitting wrong-doing. Their attorneys didn't want to talk to 13 Investigates about the deal.
"These people have not been held accountable for their actions," said Bible in disgust. "I think it's terrible."
Her debt is gone, but not the pain and loss from a simple report that crashed her credit.
"The credit reporting agencies have always gotten away with playing games . We need a consumer protection agency that will truly protect consumers," said Szwak.
Terry Bible has re-filed her case with the FTC.
Each consumer should get a copy of their credit report each year.
Put disputes in writing and send copies of supporting documentation by "certified mail."
File a case with the FTC to help uncover troubling patterns.
It's important to take these steps before embarking upon a major financial transaction.
To order a free Credit Report: (The law allows you to order one free copy from each of the nationwide consumer reporting companies every 12 months), go to Annual Credit Report.
Or Mail Form: Annual Credit Report Request Service
P.O. Box 105281
Atlanta, GA 30348-5281