Bad Credit Reporting by Debt Collectors Can Lead to Credit Denial and Higher Interest Rates for Consumers

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A case alleging violations of the Fair Debt Collection Practices Act for improper conduct in reporting of an Arizona consumer's alleged debt to credit reporting agency Experian, was filed and successfully litigated in the United States District Court for the District of Arizona(2:10-cv-00548-MHB) by Weisberg and Meyers LLC, Attorneys for Consumers. In Pinkerton v. National Credit Services (NCS) of Oklahoma and Capital Assistance Group, LLC,(2:10-cv-00548-MHB) a judgment was entered against the defendants for violations of the Fair Debt Collection Practices Act due to incorrect information found on the Plaintiff's credit report or "bad credit reporting."

A recent case (2:10-cv-00548-MHB) filed in the United States District Court for The District Of Arizona, alleging incorrect credit reporting of a consumer’s debt and subsequent mishandling of a consumer’s request to verify and dispute that debt, was litigated successfully by Weisberg & Meyers, LLC, Attorneys for Consumers. According to court documents in Pinkerton v. National Credit Services (NCS) of Oklahoma and Capital Assistance Group, LLC, an alleged debt was reported to credit reporting agency Experian by debt collection agencies National Credit Services (NCS) of Oklahoma and Capital Assistance Group (CAS), LLC prior to the Plaintiff receiving notification of the alleged debt. The negative item remained on the Plaintiff’s credit report even after a verification and dispute letter had been sent to the collection agency. The mishandling of the reporting of the debt to the credit reporting agencies was found to be a violation of the Fair Debt Collection Practices Act, 15 U.S.C. § 1692k(a) as reported in a judgment by Michelle H. Burns, U.S. Magistrate Judge.

According to court documents, Plaintiff Billy Pinkerton received a mailed letter with the information that his application for a TrueEarnings™ Costco American Express credit card had been denied. Since Mr. Pinkerton was current on his financial obligations and had a good credit history up until that point, he was confused by the credit denial and at that time obtained a copy of his credit report. The report allegedly showed an item reported by NCS of Oklahoma for a debt to Columbia House that Mr. Pinkerton disputed shortly after receiving notification of the reporting of this negative item on his credit report. Mr. Pinkerton had not received a written communication from National Credit Services until after he disputed the debt, though the item had been on his credit report for many months prior.

In another Weisberg & Meyer LLC, Attorneys for Consumers complaint, (Case No. 2:10-cv-01026-DGC) Eric Smith v. National Credit Systems Inc., filed in the United States District Court for the District of Arizona, Plaintiff Eric Smith was allegedly threatened by the defendant that a disputed debt would be placed on his credit report if he didn’t pay the debt within the 30 day dispute period. This is an alleged violation of the Fair Debt Collection Practices Act (FDCPA) 1692e5. According to the complaint, Smith admits to having co-signed on his daughter’s lease, which is what the alleged debt was for. According to court documents he allegedly does not admit or agree to owing the amount that defendants claim is due, which allegedly includes excessive fees and charges not authorized by the lease and applicable law.

Many consumers do not discover that a negative item has been added to their credit report until after a credit application for a consumer credit loan such as a home mortgage, car loan, or student loan has been submitted. According to consumer research studies, negative items seriously damage not only efforts to get a loan from certain lenders but also will raise the interest rate which means higher payments over the life of the loan. By the time the item has been handled, the loan application process may have ended and it may be difficult to get the original terms changed or there may be a need to reapply once the item has been disputed and removed.

To ensure information in a credit history and credit report are accurate, its wise to obtain a free credit report at least once a year, or prior to applying for any long term loan or credit card to ensure that bad credit reporting doesn’t rear its ugly head. A free copy of your credit report from all 3 credit bureaus can be obtained by visiting AnnualCreditReport.com.

About Weisberg & Meyers, LLC, Attorneys for Consumers

Weisberg and Meyers, LLC, Attorneys for Consumers, is a nationally recognized consumer law firm, has attorneys licensed to practice in Arizona, Colorado, Florida, Georgia, Illinois, New Jersey, New Mexico, New York, North Carolina, Oklahoma, South Carolina, Tennessee, Texas and Washington, and works with attorneys throughout the country to protect the rights of aggrieved consumers. The Firm’s diverse practice includes claims under the Fair Debt Collection Practices Act (FDCPA) and Fair Credit Reporting Act (FCRA), as well as violations of the Telephone Consumer Protection Act (TCPA), Truth In Lending Act (TILA), the Electronic Fund Transfer Act (EFTA), Fair Credit Billing Act (FCBA), Equal Credit Opportunity Act (ECOA), Consumer Leasing Act, Credit Repair Organizations Act, (CROA) and State Unfair and Deceptive Practices Acts (UDAP’s). The Firm also offers Debt Settlement services, prosecutes Class Action Lawsuits, and handles Breach of Warranty, Lemon Law and Consumer Fraud Claims.

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Marshall Meyers
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