New York State Attorney General Eric Schneiderman started investigating the practices of the credit bureaus back in 2012 from the many complaints from his constituents about credit reporting errors and the what seemed to be a scam they encountered when trying to correct the errors.
The wall street journal published this article in March of 2015 at the following link:
What I am about to go over is the issues that may (or will) pop up as consumers most likely have the thought process that everything will be all grass and roses once completed.
BECAUSE….we all know how the credit bureaus want to do their utmost to help consumers, right???
Let’s first discuss what is to be done, we have been told “most changes” will be implemented nationally and will kick in over the next six to 39 months.
Not sure about you reading this but I somehow doubt the credit bureaus are racing against the clock to get this started so expect changes to occur in the latter of that time frame.
The next part which I find to be LITERALLY the most insulting is the credit bureaus will be required to use “trained employees” to review the documentation consumers submit when they encounter an error on their credit report & if the creditor says its correct the bureau employee must still look into it and resolve the dispute.
I don’t know about you reading this but does that last paragraph not have the bureaus saying to us as consumers between the lines that “we have never cared about what you told us before in the past or sent us and never looked at it but now that we were going to get sued and attacked by the State Attorney General of New York and know that several other Attorney Generals from other states would have jumped on the band wagon so now we will do it”.
While that statement of mine was long winded and if you haven’t seen it before, check out this link to when 60 minutes check out the credit bureaus and how they operate:
In case you are wondering this is not just for the State of New York but a nationwide reform. Now I don’t know about you but if this helps us I would definitely consider voting for the guy who finally stepped up to put the credit bureaus in their place considering the credit bureau industry brought in approximately 11 billion according to a report I read last year.
In the next week I am going to publish a subcommittee hearing report from several years ago that will literally blow your mind away. Flat out, a creditor asking how they want to do the credit dispute investigation and I won’t tell you what their response was you will have to read it for yourself!
Getting back on track here now, the best aspect of this agreement is the way medical bills will be handled.
While I have my own thoughts on debt collection and the legalities of that let me tell you that when these changes take effect and of course this part would and should be the easiest but NO MEDICAL bills under 6 months old from date of service can be reported on a consumer credit report.
According to the CFPB about 52% of debt on credit reports are from medical expenses. The medical business (yes, I said business) is so poorly handled that I cannot tell you how many times I have had clients come to me telling me they had no clue there was an outstanding bill as when they went to hospital or had some emergency they ended up getting over a dozen bills and not have a clue where they came from.
My thought is give it a few years and see who goes after them to get their “billing” together.
The main issue of course is the insurance company taking their sweet time in paying out claims. Many stories are out there where they flat out deny paying certain bills as many majority of people have no clue what is covered and what isn’t and the less they pay the better off they are. So a huge lawsuit over denying obvious claims would be a great lawsuit to see.
The CDIA (Consumer Data Industry Association) a trade group that represents the bureaus and lender industry actually had the gall to state in 2013 they began sending paperwork to consumers that the could mail in with their disputes to lenders to address specific complaints.
As a credit professional, the ONLY thing I have seen is a 1 page paper pigeon holing the consumer into certain statements where they can convert it to the 2 digit code to send to the lenders (just a reminder to watch the 60 minute video).
While this is definitely a step in the right direction I am very interested to see how they plan to “forget” certain areas as the lower the consumer credit score the more places consumers try to become credit worthy as if you listen to TV, the radio and online “NO CREDIT NO PROBLEM”.
Which means the more money the credit bureaus make as consumers keep going to different lenders to see if they can get qualified. As money makes the world go around I am just waiting to see what is lurking over the horizon.