“Credit reports are the foundation of consumers’ financial lives” said CFPB Director Richard Cordray. “Consumers continue to express their frustration about inaccurate information on their credit reports and difficulty in getting these errors fixed. We will continue to work to ensure that credit report disputes are investigated, errors are fixed, and consumers are treated fairly.”Read More
The Consumer Financial Protection Bureau today took two separate actions against Citibank for illegal debt sales and debt collection practices.
In the first action, the CFPB ordered Citibank to provide nearly $5 million in consumer relief and pay a $3 million penalty for selling credit card debt with inflated interest rates and for failing to forward consumer payments promptly to debt buyers.
The second action is against both Citibank and two debt collection law firms it used that falsified court documents filed in debt collection cases in New Jersey state courts. The CFPB ordered Citibank and the law firms to comply with a court order that Citibank refund $11 million to consumers and forgo collecting about $34 million from nearly 7,000 consumers.Read More
The 2016 Credit Symposium is a chance to get a great education for an AMAZING cause...
100% of the profits from our event will be donated to the Statue of Responsibility Foundation to benefit this amazing project...read to learn more about the Statue of Responsibility.
FOR IMMEDIATE RELEASE:
December 17, 2015
Office of Communications
Tel: (202) 435-7170
CONSUMER FINANCIAL PROTECTION BUREAU ORDERS CARHOP TO PAY $6.4 MILLION PENALTY FOR JEOPARDIZING CONSUMERS’ CREDIT
One of Nation’s Biggest “Buy-Here, Pay-Here” Auto Dealers Provided Inaccurate Credit Information
WASHINGTON, D.C. — Today the Consumer Financial Protection Bureau (CFPB) is taking action against CarHop, one of the country’s biggest “buy-here, pay-here” auto dealers, and its affiliated financing company, Universal Acceptance Corporation, for providing damaging, inaccurate consumer information to credit reporting companies. CarHop and its affiliate also failed to provide accurate, positive credit information that it promised consumers it would supply to the credit reporting companies. The CFPB’s investigation found that the companies inaccurately reported information for more than 84,000 accounts on a widespread and systemic basis. The CFPB is ordering the companies to cease their illegal activities and pay a $6,465,000 civil penalty.
“Many consumers went to CarHop because they needed transportation and wanted to build up a good record of paying their bills,” said CFPB Director Richard Cordray. “But CarHop and Universal Acceptance Corporation thwarted those expectations by inaccurately furnishing negative credit information. The CFPB will not stand for companies whose sloppy actions jeopardize consumers’ credit.”
Minnesota-based CarHop, also known as Interstate Auto Group, is one of the largest buy-here, pay-here auto dealers in the nation. Buy-here, pay-here dealers sell cars and originate and service the auto loan. CarHop has approximately 50 retail locations in approximately 15 states. CarHop sells vehicles primarily to customers with nonexistent or poor credit histories in need of subprime or deep subprime credit. It markets itself as a way for these consumers to rebuild or build-up good credit by saying it will provide positive payment histories to the credit reporting companies. Consumers who buy from CarHop frequently do so because they suffer from poor credit scores and other financial challenges.
Universal Acceptance Corporation, on behalf of CarHop, furnishes consumer account information to all three major consumer reporting companies on a monthly basis. The CFPB found that the company reported information that it knew or had reasonable cause to believe was inaccurate. The company inaccurately furnished information for more than 84,000 accounts from about January 2009 until September 2013. With CarHop, consumers may not have even known about the damage to their credit profiles resulting from the erroneous reporting unless and until they checked their credit reports.
Almost all the information the companies inaccurately furnished to the credit reporting companies could potentially harm customers. The negative information could lower a consumer’s credit score, hamper their ability to obtain other credit, and hurt their job prospects. The CFPB found that CarHop and Universal Acceptance Corporation violated the Fair Credit Reporting Act and the Consumer Financial Protection Act. Specifically, the companies:
- Deceived consumers into believing they could build up good credit with CarHop: As part of its marketing and sales practices, CarHop represented in writing to consumers that it reports “good credit” to the credit reporting companies. CarHop also emphasized to consumers its part in helping them build and maintain good credit. This appealed to consumers trying to build up their credit profiles with a history of on-time payments. But the company, through Universal Acceptance Corporation, failed to furnish certain positive information, including information that would support “good credit,” for tens of thousands of consumers.
- Provided inaccurate repossession information: CarHop customers had the right to voluntarily return their vehicles within 72 hours of purchase for a full refund without any penalties or additional obligations. But for some customers who returned their vehicles under this policy, Universal Acceptance Corporation did not accurately report to the credit reporting companies what really happened. Instead, the company inaccurately reported on numerous occasions that the cars had been repossessed or that the consumer still owed money.
- Incorrectly reported previous customers as still owing money: For consumers 72 hours past purchase, CarHop often resolved disputes by having the customer return the vehicle. It then issued documentation to the customer saying they no longer had any financial obligations and had settled their account. But for hundreds of customers, in the months or even years that followed after they returned their vehicles, Universal Acceptance Corporation inaccurately furnished, on a monthly basis, information that said that the customer still had an outstanding balance. Sometimes, the company inaccurately reported the amount past due in continuously increasing amounts.
- Failed to have reasonable written policies and procedures to ensure the accuracy of consumers’ credit information: Universal Acceptance Corporation had no written policies and procedures regarding the accuracy and integrity of the consumer information it furnished until early August 2013. The policies it adopted that month were not reasonable or appropriate to the nature, size, complexity, and scope of the company’s activities.
Pursuant to the Dodd-Frank Act, the CFPB has the authority to take action against institutions or individuals engaging in unfair, deceptive, or abusive acts or practices or that otherwise violate federal consumer financial laws. Under the terms of the CFPB orders released today, CarHop and Universal Acceptance Corporation must:
- Cease misrepresenting that they will report “good credit”: The companies must not misrepresent to customers that they will report “good credit” or other positive information to the credit reporting companies.
- Correct credit reporting information: If Universal Acceptance Corporation furnished information to a credit reporting company that it knew or had reasonable cause to believe was inaccurate, it must notify the credit reporting company of the inaccuracy. When it does so, it must either provide corrected information or request that the company delete the wrong information from the consumer’s file if accurate information is not available.
- Provide credit reports to harmed consumers: CarHop and Universal Acceptance Corporation must, for consumers who had incorrect information furnished about their accounts, arrange for consumers to obtain free credit reports from the credit reporting companies that received the inaccurate information.
- Implement an audit program to ensure laws are followed: CarHop and Universal Acceptance Corporation must implement a process for auditing information that Universal Acceptance Corporation furnishes to the credit reporting companies on a monthly basis. This process must include monitoring and evaluating the disputes the companies receive. The audit is designed to ensure the integrity and accuracy of the information.
- Pay a $6,465,000 civil penalty: CarHop and Universal Acceptance Corporation will pay a $6,465,000 penalty to the CFPB’s Civil Penalty Fund.
The consent order can be found at: http://files.consumerfinance.gov/f/201512_cfpb_carhop-consent-order.pdf
The Consumer Financial Protection Bureau is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit consumerfinance.gov.
The Bureau’s complaint alleges that Aria and his businesses violated the Dodd-Frank Wall Street Reform and Consumer Protection Act’s prohibition against deceptive acts and practices by misleading consumers about their services. The complaint also alleges the defendants violated federal privacy law for failing to provide a required privacy notice.
The Bureau filed the lawsuit in the U.S. Federal Court for the Southern District of California. The complaint is not a finding or ruling that the defendants have actually violated the law.Read More
Use this sample to draft a letter disputing errors on your credit report.
Your letter should clearly identify each item in your report you dispute, state the facts and explain why you dispute the information, and request that it be removed or corrected. You may want to enclose a copy of your report with the items in question circled.Read More
Your letter should identify each item you dispute, state the facts and explain why you dispute the information, and ask that the information provider take action to have it removed or corrected.Read More
The credit bureaus have five business days once it has completed the reinvestigation to notify you of the results.Read More
These are direct links to the state attorney general sites where you can either file a complaint online or download the complaint form.Read More
As a consumer you have rights and if you feel that they have been violated in any way then by using the links below to file a complaint against the offending parties is a good start to attaining a refund and/or compensation.Read More
Unpaid tax liens can remain for 15 years. Paid tax liens will remain for seven years from the paid date, even though it may mean the item remains for longer than 15 years total.
Your score will range between 300 and 870 and, of course, the higher the better. As your score increases, your credit risk decreases. Exact numbers differ by lending institution but the average high approval score is 680 or above. Often times your score is taken from all three credit reporting companies and the middle score is used.Read More
Any company that denies your application must supply the name and address of the credit bureau they contacted, provided the denial was based on information given by the credit bureau.Read More
Due to the National Consumer Assistance Plan Experian, Equifax, and TransUnion will be required to;
To allow insurance payments to kick in they will need to block unpaid medical bills off a credit report for a 180-day waiting period, .
Listen more closely to consumers' side when they dispute negative tradelines reported by lenders, debt collectors, and courthouses.
Heighten oversight of data furnishers that submit delinquent debts to the credit bureaus.
While still providing a free report every year they will now also provide a free credit report after a successful dispute to verify the repair.
Erase unpaid municipal fines, traffic tickets and other debts that are not covered by a contract or agreement with the consumer.
Consumers will find more educational material at the website that allows consumers to obtain a free credit report from each of the three ratings agencies once a year.Read More
When the FCRA was revised by FACTA, they put in a section for "Expedited Dispute Resolution" Section 611a(8) ... otherwise known as the on-line dispute system.
If you read that part you will notice this sentence:
"the agency shall not be required to comply with paragraphs (2), (6), and (7) with respect to that dispute" if they delete the tradeline within 3 days."
- Paragraph 2 is the part that requires the CRA to forward your dispute and all related documentation you provide to the creditor.
- Paragraph 6 is the part that requires the CRA to provide you with written results of the investigation.
- Paragraph 7 is the part that requires the CRA to provide you with the method of verification on request from the consumer.
CRA stand for Credit Reporting Agency ... TransUnion, Equifax, and Experian.
The law isn't specific enough to say permanently delete or suppress ... herein lies the problem.
The CRA can "soft delete" it for 30 days and then the tradeline can reappear when the furnisher reports it again in the next 30 day cycle.
This is due to the fact that the CRA's aren't required to tell the creditor you disputed it at all.
This leaves a system in place where the consumer thinks they are getting a delete, but it is only temporary.
Since the creditor doesn't know it was deleted, they will re-report it and the CRA will put it back on your report.
Furthermore, you lose the hard-copy of the investigation results you would otherwise get if the dispute was done by mail by a reputable credit repair company.
Yes, every credit repair company is required to have their clients sign a consumer contract per the Credit Repair Organizations Act.
- Sec. 408 stipulates that if your contract does not meet the criteria outlined within the Credit Repair Organizations Act then the contract is consider VOID and is not enforceable in any federal or state court.
- Sec. 409 goes over the particulars of civil liability, punitive damages, attorney’s fees, etc ...
- Sec. 410 states the investigation rights of the Federal Trade Commission and the the state’s authority.
That’s tough ... civil liability, punitive damages, attorney's fees, and administrative enforcement by the Federal Trade Commission. Not anything any company owner wants to hear ...
Some basic guidelines to a compliant contract;
- Duplicate forms of cancellation
- A copy of ‘Consumer Credit File Rights Under State and Federal Law’
- Distinct verbiage in bold close to where the client signs the contract
FACT: Every credit repair company is required keep a copy of that contract on file for two years after the date on which the contract is signed by the client.
The Credit Bureaus Defense Strategy of Attrition and Delay
The credit bureaus have for a long time issued a defense strategy of attrition and delay. Why? They make more money off of people with bad credit than they do off of those with a positive credit history. A person with bad credit will pull their report 10X more often than someone with a 720 plus credit score.
Experian, Equifax, and TransUnion, or "The Big Three" has had their defense strategy criticized by Judge Posner of the 7th Circuit and stated that they are "investing in developing a reputation intended to deter plaintiffs."
This was an important reason why the 7th Circuit upheld $372,000 with only $10,000 in punitive damages (a 37-to-1 ratio).
Consumers need to urge the courts to follow Judge Posner in recognizing that that is a deliberate game played by the credit bureaus and the credit reporting agencies and that the expected outcome of that game will be high punitive damages.
Here is the actual statement;
"Finally, if the total stakes in the case were capped at $50,000 (2 x [$5,000 + $20,000]), the plaintiffs might well have had difficulty financing this lawsuit. It is here that the defendant's aggregate net worth of $1.6 billion becomes relevant. A defendant's wealth is not a sufficient basis for awarding punitive damages."
That would be biased and would infringe upon the rule of law by making the punishment depend on class rather than behavior. This is where wealth enables the credit bureaus to mount an extremely aggressive and expensive defense against suits. In turn, this may make it difficult for the consumer to find a lawyer willing to handle their case, involving as it does only modest stakes, for the usual 33-40 percent contingency fee.
In other words, the credit bureaus are continually investing time and money to develop a reputation that intends to discourage consumers from filing suit.
State Farm Mutual Automobile Ins. Co. v. Campbell, supra, 123 S.Ct. at 1525; BMW of North America, Inc. v. Gore, supra, 517 U.S. at 591, 116 S.Ct. 1589 (concurring opinion); Zazu Designs
v. L'Oreal, S.A., 979 F.2d 499, 508-09 (7th Cir.1992).
Florida Credit Repair
Disclaimer: These codes may not be the most recent version. Your state may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
CREDIT SERVICE ORGANIZATIONS
817.701Surety bonds; exemption.
817.702Statement to buyer.
817.704Provisions of contract.
817.705Waivers; burden of proof; penalties.
817.706Actions for damages.
817.7001 Definitions.—As used in this part:
(1) “Buyer” means any individual who is solicited to purchase, or who purchases, the services of a credit service organization.
(2)(a) “Credit service organization” means any person who, with respect to the extension of credit by others, sells, provides, performs, or represents that he or she can or will sell, provide, or perform, in return for the payment of money or other valuable consideration, any of the following services:
1. Improving a buyer’s credit record, history, or rating;
2. Obtaining an extension of credit for a buyer; or
3. Providing advice or assistance to a buyer with regard to the services described in either subparagraph 1. or subparagraph 2.
(b) “Credit service organization” does not include:
1. Any person authorized to make loans or extensions of credit under the laws of this state or the United States who is subject to regulation and supervision by this state or the United States or a lender approved by the United States Secretary of Housing and Urban Development for participation in any mortgage insurance program under the National Housing Act;
2. Any bank, savings bank, or savings and loan association whose deposits or accounts are eligible for insurance by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation, or a subsidiary of such bank, savings bank, or savings and loan association;
3. Any credit union, federal credit union, or out-of-state credit union doing business in this state;
4. Any nonprofit organization exempt from taxation under s. 501(c)(3) of the Internal Revenue Code;
5. Any person licensed as a real estate broker by this state if the person is acting within the course and scope of that license;
6. Any person collecting consumer claims pursuant to s. 559.72;
7. Any person licensed to practice law in this state if the person renders services within the course and scope of his or her practice as an attorney and does not engage in the credit service business on a regular and continuing basis;
8. Any broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission if the broker-dealer is acting within the course and scope of that regulation; or
9. Any consumer reporting agency as defined in the Federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681t.
(3) “Extension of credit” means the right to defer payment of debt or to incur debt and defer its payment offered or granted primarily for personal, family, or household purposes.
History.—s. 1, ch. 87-204.
817.7005 Prohibited acts.—A credit service organization, its salespersons, agents, and representatives, and independent contractors who sell or attempt to sell the services of a credit service organization shall not do any of the following:
(1) Charge or receive any money or other valuable consideration prior to full and complete performance of the services the credit service organization has agreed to perform for the buyer, unless the credit service organization has obtained a surety bond of $10,000 issued by a surety company admitted to do business in this state and has established a trust account at a federally insured bank or savings and loan association located in this state; however, where a credit service organization has obtained a surety bond and established a trust account as provided herein, the credit service organization may charge or receive money or other valuable consideration prior to full and complete performance of the services it has agreed to perform for the buyer but shall deposit all money or other valuable consideration received in its trust account until the full and complete performance of the services it has agreed to perform for the buyer;
(2) Charge or receive any money or other valuable consideration solely for referral of the buyer to a retail seller or to any other credit grantor, who will or may extend credit to the buyer if the credit that is or will be extended to the buyer is upon substantially the same terms as those available to the general public;
(3) Make, or counsel or advise any buyer to make, any statement that is false or misleading or that should be known by the exercise of reasonable care to be false or misleading, or omit any material fact to a consumer reporting agency or to any person who has extended credit to a buyer or to whom a buyer is applying for an extension of credit with respect to a buyer’s credit worthiness, credit standing, or credit capacity; or
(4) Make or use any false or misleading representations or omit any material fact in the offer or sale of the services of a credit service organization or engage, directly or indirectly, in any act, practice, or course of business that operates or would operate as fraud or deception upon any person in connection with the offer or sale of the services of a credit service organization, notwithstanding the absence of reliance by the buyer.
History.—s. 1, ch. 87-204.
817.701 Surety bonds; exemption.—The requirement to obtain a surety bond and establish a trust account as provided in s. 817.7005(1) shall be waived for any salesperson, agent, or representative of a credit service organization where the credit service organization obtains such surety bond and establishes such trust account.
History.—s. 1, ch. 87-204.
817.702 Statement to buyer.—Upon execution of the contract as provided in s. 817.704 or agreement between the buyer and a credit service organization and before the receipt by the credit service organization of any money or other valuable consideration, whichever occurs first, the credit service organization shall provide the buyer with a statement, in writing, containing all the information required by s. 817.703. The credit service organization shall maintain on file for a period of 5 years an exact copy of the statement, personally signed by the buyer, acknowledging receipt of a copy of the statement.
History.—s. 1, ch. 87-204.
817.703 Information statement.—The information statement required under s. 817.702 shall include all of the following:
(1)(a) A complete and accurate statement of the buyer’s right to review any file on the buyer maintained by any consumer reporting agency, as provided under the Federal Fair Credit Reporting Act, 15 U.S.C. ss. 1681-1681t;
(b) A statement that the buyer may review his or her consumer reporting agency file at no charge if a request is made to the consumer reporting agency within 30 days after receiving notice that credit has been denied; and
(c) The approximate price the buyer will be charged by the consumer reporting agency to review his or her consumer reporting agency file.
(2) A complete and accurate statement of the buyer’s right to dispute directly with a consumer reporting agency the completeness or accuracy of any item contained in any file on the buyer maintained by the consumer reporting agency.
(3) A statement that accurate information cannot be permanently removed from the file of a consumer reporting agency.
(4) A complete and detailed description of the service to be performed by the credit service organization for the buyer and the total amount the buyer will have to pay, or become obligated to pay, for the services.
(5) A statement notifying the buyer of his or her right to proceed against the bond or trust account required under s. 817.7005.
(6) The name and address of the surety company which issued the bond, or the name and address of the depository and the trustee and the account number of the trust account.
History.—s. 1, ch. 87-204; s. 1274, ch. 97-102.
817.704 Provisions of contract.—(1) Each contract between the buyer and a credit service organization for the purchase of the services of the credit service organization shall be in writing, dated, signed by the buyer, and shall include all of the following:
(a) A conspicuous statement in boldfaced type, in immediate proximity to the space reserved for the signature of the buyer, as follows: “You, the buyer, may cancel this contract at any time prior to midnight of the fifth day after the date of the transaction. See the attached notice of cancellation form for an explanation of this right”;
(b) The terms and conditions of payment, including the total of all payments to be made by the buyer, specifying the amount of the payments to be made to the credit service organization or to some other person;
(c) A full and detailed description of the services to be performed by the credit service organization for the buyer, including all guarantees and all promises of full or partial refunds, and the estimated date by which the services are to be performed or the estimated length of time for performing the services; and
(d) The credit service organization’s principal business address and the name and address of its agent in the state authorized to receive service of process.
(2) The contract shall be accompanied by a completed form in duplicate, captioned “Notice of Cancellation,” that shall be attached to the contract, be easily detachable, and contain in boldfaced type the following statement written in the same language used in the contract:
NOTICE OF CANCELLATION
You may cancel this contract, without any penalty or obligation, within 5 days from the date the contract is signed.
If you cancel any payment made by you under this contract, it will be returned within 10 days following receipt by the credit service organization of your cancellation notice.
To cancel this contract, mail or deliver a signed dated copy of this cancellation notice, or any other written notice to:
(name of credit service organization) at
(address of credit service organization) ,
(place of business) not later than midnight
I hereby cancel this transaction (date) .
(purchaser’s signature) .
The credit service organization shall give to the buyer a copy of the completed contract and all other documents the credit service organization requires the buyer to sign at the time they are signed.
History.—s. 1, ch. 87-204.
817.705 Waivers; burden of proof; penalties.—(1) Any waiver by a buyer of any part of this part is void. Any attempt by a credit service organization to have a buyer waive rights given by this part is a violation of this part.
(2) In any proceeding involving this part, the burden of proving an exemption or an exception from a definition is upon the person claiming it.
(3) Any person who violates this part is guilty of a felony of the third degree, punishable as provided in s. 775.082, s. 775.083, or s. 775.084.
(4) This section does not prohibit the enforcement by any person of any right provided by this or any other law.
History.—s. 1, ch. 87-204.
817.706 Actions for damages.—(1) Any buyer injured by a violation of this part may bring an action for recovery of damages. Judgment shall be entered for actual damages, but in no case less than the amount paid by the buyer to the credit service organization, plus reasonable attorney’s fees and costs. An award may also be entered for punitive damages.
(2) Any buyer injured by a violation of this part may bring an action against the surety bond or trust account of the credit service organization.
(3) The remedies provided under this part are in addition to any other procedures or remedies for any violation or conduct provided for in any other law.
History.—s. 1, ch. 87-204.