Alabama Consumer Law Blog

Forbes.com has posted an article with tips you can use to clean up your credit score. First, get your credit report. However, be cautious when obtaining a copy as many advertisements for a free credit report can be scams. The Fair Credit Reporting Act enables you one free credit report a year from three major agencies. You can get a report from the FCRA in as little as 60 days if you have been denied credit, are unemployed, or have been a victim of identity theft.

Next, contact the creditor and credit reporting agency if there are any discrepancies on your credit report. An official dispute should be sent to both places in writing and include things like copies of canceled checks. If the error is the reporting agency's fault you should contact them directly.

You should try to bring your score up to the next round number, even if that is just a few points. For example, a score of 710 may be eligible for a mortgage company's best rate, but being as close as a 705 can cost you thousands of dollars. A good suggestion is to get a credit card with a low limit. Use it to buy some things that you would normally pay for with a debit card or cash and paying the balance off each month will boost your score.

Cancelling an unused card can actually hurt your score. If you must cancel cards, keep the ones with the oldest accounts as length of time is important when determining credit scores.

...reputable sources say that canceling an unused card can actually hurt your score rather than improve it. The reason is because in the eyes of the reporting agencies, you'll have a higher utilization ratio, or higher total outstanding credit vs. what you have available to you. You'll essentially have the same outstanding balance as you did the day before (assuming you haven't paid anything down), but you'll have less credit available to you.

Before doing something major, like searching for a mortgage, you'll want any credit repairing you do to show as soon as possible. Some lenders offer rescoring services in as little as 72 hours as opposed to thirty days. Your payment history is still the most important thing when factoring a credit score. If you're behind on payments, do your best to catch up with the accounts you currently have and don't open new ones.

If you have questions or concerns about your credit report, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

StarTribune.com has posted an article about how your credit score can affect your employment prospects.

In 1998, a poll conducted by the Society for Human Resource Management found that 25% of employers did credit checks on prospective employees. In 2006 the number rose to 43% of employers. With the current economic state and unemployment nearing 10%, nearly half of hiring companies are...

now seeking credit "employment reports," which include payment histories and open accounts, but not actual credit scores.

The Fair Credit Reporting Act requires companies to get your consent before getting your credit report. If you are not hired because of information in the credit report, you have the right to see the report and be told how to get your own version of it.

FCRA also requires the companies Equifax, Experian and TransUnion to provide you with a free credit report annually, so it is a good idea for you to be familiar with your credit history so you can fix any errors that appear on your credit report.

Being honest about your credit history is also important and effective.

"If you know you have a credit problem — and you have an explanation — it's always best to be proactive about it," he says. "That step won't hurt a candidate, and can actually be helpful, because it will reinforce an employer's perception of their integrity."

If you have had problems with your credit score or obtaining a credit report, feel free to contact us through our website or by calling 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

We are often asked questions such as "Why are you guys consumer protection lawyers" or "what is a consumer protection attorney" and we wrote an article on our website to help answer these types of questions. We hope it is helpful to you and let us know if you have any questions - either contact us through our website or call us at 205-879-2447.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Also remember you are invited to our free tele seminar on Alabama Wrongful Foreclosures set for January 19, 2010, at 4 pm CST.

We want to let you know about some of the recent cases we have been involved in, particularly where we have filed lawsuits against companies for abusing consumers in Alabama.

Let us know if you have any questions - you can call us at 205-879-2447 or fill out our contact form on our website.

We filed a wrongful foreclosure case for our client who was sued for ejectment by a trustee. In this case the mortgage company foreclosed on our client and then sued him to kick him out of his house. Since the foreclosure, we believe, was improper, we countersued against Deutsche Bank National Trust Company, which is the trustee of this securitized loan. We also believe that the loan was never properly transferred into the trust which claims that it owns the loan - if this is true then the company foreclosing had no more right to foreclose on our client than you or I would. It will be interesting to see what develops in this case where we have alleged fraud (related to a loan modification) and wrongful foreclosure against Deutsche Bank National Trust and the servicer American Home Mortgage Servicing, Inc.

[Also remember you are invited to our free tele seminar on Alabama Wrongful Foreclosures set for January 19, 2010, at 4 pm CST.]

Illegal voicemail cases are very common because it is probably the most common form of violation of federal law.

We sued Leading Edge Recovery Solutions, LLC. Our client has alleged that Leading Edge Recovery Solutions, LLC violated the Telephone Consumer Protection Act (TCPA) by making illegal calls to our client's cell phone with pre-recorded messages. These are the messages that are left by a computer rather than a live human being. Normally these calls are made by an "auto dialer" which is a computer or telephone system that automatically places the calls. This is when you get a call and the voice says "Please hold for the next operator" - a sure sign that a computer has called and now it is searching for the next operator who is free to transfer your call to. In this suit our client has alleged that Leading Edge Recovery, Solutions, LLC also made an illegal third party disclosure to the client's father.

Another illegal voicemail case involves Enhanced Recovery Corporation out of Florida. Our client alleged that this debt collector violated the Fair Debt Collection Practices Act (FDCPA) by refusing to give the proper disclosures when leaving voicemails, including failing to leave the Mini-Miranda ("this is an attempt to collect a debt" and "we are a debt collector").

In a case filed against The Brachfeld (a/k/a Brachfield) Law Group d/b/a Brachfeld & Associates, PC, a California lawfirm and collection agency, our client alleged that this debt collector violated the TCPA by making a large number of harassing illegal calls to our client's cell phone. The calls, as is common among debt collectors, used pre-recorded messages and were most likely made with the use of an autodialer or predictive dialer.

We filed an additional lawsuit against Brachfeld Law Group (Brachfeld & Associates, PC) for repeated calls without permission to the consumer's cell phone using an autodialer and pre-recorded messages. This alleged conduct would violate the TCPA and state law on harassment and invasion of privacy.

A second case against Leading Edge Recovery Solutions, LLC, out of Illinois, was filed by a client alleging, again, that this debt collector illegally used prerecorded messages and/or predictive/autodialers when calling the client's cell phone. The allegations include that this violates the TCPA.

Harvard Collection Services, Inc., a collection agency out of Illinois, was sued by a client for alleged violations of the FDCPA and the TCPA in the multiple calls to the client's cell phone looking for someone other than the client. It violates the FDCPA to call a "third party" (anyone other than the consumer who allegedly owes the money) after the third party has said they will not or cannot provide location information to the collector. The complaint alleges that the bill collector used pre-recorded messages and/or autodialer calls against the cell phone of the client.

ARS National Services, Inc, a collection agency out of California, was sued by a client claiming that this debt collector violated the FDCPA by refusing to make the proper disclosures when leaving voicemail messages. It is critical that debt collectors comply with this portion of the law - making disclosures - in whatever form they choose to attempt to collect the debt. They do run the risk, however, of violating the prohibition against third party disclosures when they leave voicemails. While the debt collection industry wrings it hands over this "tough situation" of which law to violate (disclosure laws or third party laws) the courts have provided a simple and elegant solution - don't leave voicemails. Collect debts without leaving voicemails - there is no God given right to leave a voicemail despite what many collectors would argue....

A Florida collection agency known as Omni Credit Services of Florida, Inc., was sued by a client for violating the FDCPA in the voicemails left which did not contain the proper disclosures, including the Mini Miranda.

J.C. Christensen & Associates, Inc., a Minnesota collection agency, was sued by a client alleging that illegal voicemails were left which violated the FDCPA. The voicemails did not contain the Mini Miranda or other required disclosures according to the lawsuit filed against J.C. Christensen & Associates, Inc.

A client also sued a company that we have sued a number of times - a debt collector from New York known as Creditors Interchange Receivable Management, LLC. This company allegedly called our clients numerous times on the consumer's cell phone using an autodialer and pre-recorded messages. The consumer alleges he never gave Creditors Interchange or the original creditor the cell phone number and therefore the calls were illegal under the TCPA.

Third party disclosure cases reveal common violations by debt collectors. They love to contact people other than the consumer (or consumer's spouse) because having your boss or parent or neighbor or ex-mother in law call you after being contacted by a debt collector is very intimidating.

Our client sued Viking Collection Service, Inc., a collection agency out of Minnesota, for allegedly repeatedly calling our client's parent even after the parent told the collector the consumer did not live there. In our opinion this type of misconduct violates the FDCPA and Alabama law on privacy - this is known as an "Invasion of Privacy" claim in Alabama.

The Pennsylvania debt collector Academy Collection Service, Inc., was sued by a client for its collection activities. The client alleges that Academy Collection Service, Inc. made third party disclosures to someone other than the client in violation of the FDCPA and Alabama state law.

Fair Credit Reporting Act cases deal with the important subject of our credit reports and inaccuracies that either the credit reporting agencies (Equifax, Experian, Innovis, and Trans Union) or furnishers (such as Bank of America, Discover Card, Capital One, etc) refuse to correct.

A client sued GEMB (GE Money Bank - this bank is behind many store and gas cards), Equifax Information Services, Inc., Trans Union, LLC, and Innovis Data Solutions, Inc. for refusing to correct the client's credit reports. An account that was opened four years before the client was born was reported as the client's individual account! The allegations include that the client disputed the account directly to the credit reporting agencies (Equifax, Innovis, and TransUnion) and after they investigated it and notified GEMB so it could investigate the dispute, all of the defendants decided to keep this account on the consumer's credit reports. The allegations include that the defendants violated the FCRA and Alabama state law.

We will keep you posted on new suits that we file and will continue to look back at some of the suits we filed in 2009 to give you an idea of what your options may be and what to look out for when dealing with these types of consumer issues.

Feel free to visit our other sites - Illegal Voicemails and Sued By A Debt Collector.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

The Michigan Collection Law Blog has posted an article that warns consumers about a lesser known danger to your credit score. The article discusses a couple who traded in their RV, unaware that it would cripple their credit score.

When the happy couple trade in their old RV that had a lien on it from the prior lender, for a new RV, they counted on the Walt Michals to pay off the loan balance of about $180,000. That did not happen. Walt Michals went out of business without paying off the lien on the old RV and now the couple is on the hook for the old loan and the new loan. This has been financially devastating to the couple and has completely trashed their credit score because they have not been able to keep up with the old payment as well as the new one. Worse yet, they probably have no rights under the Fair Credit Reporting Act that could be used to clean up their credit score.

The article gives several pointers on how to protect yourself and avoid this situation. First, you should turn the car title over to the bank and not the dealership. The dealership shouldn't give you any problems if they truly intend to pay off the title. If the vehicle were to suffer any damages while in the care of the dealership, your insurance should cover it. Also, if the dealership hides or transfers your vehicle, it is officially stolen since the title is not in their name.

If you have questions or concerns regarding your credit score, feel free to contact us.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

The Consumerist has posted an article that highlights what your credit report can be (legally) used for. Some things your credit report can be used to determine are:

-Applications for credit, insurance, and rentals for personal, family or household purposes.
• Employment, which includes hiring, promotion, reassignment or retention. A CRA may not release a credit report for employment decisions without consent.
• Court orders, including grand jury subpoenas.
• "Legitimate" business needs in transactions initiated by the consumer for personal, family, or household purposes. (litigation is not legitimate by 3rd parties)
• Account review. Periodically, banks and other companies review credit files to determine whether they wish to retain the individual as a customer.
• Licensing (professional).
• Child support payment determinations.
• Law enforcement access: Government agencies with authority to investigate terrorism and counterintelligence have secret access to credit reports.

However, debt collectors don't legally have the power to false information on your credit reports. Such behavior is prohibited by the Fair Credit Reporting Act.

If you have had issues with how your credit report has been used, or problems with debt collectors, feel free to contact us.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

The Consumerist has posted an article on how to get free and accurate credit reports from government operated websites. The article warns against purchasing credit reports due to such a high rate of scams from "no name companies."

If you want your credit report, go to AnnualCreditReport.com. The Fair Credit Reporting Act gives you the right to see your credit report every twelve months. The government set up the AnnualCreditReport.com website for you to request these reports. Don't go anywhere else and don't pay for what is yours for free by law.

However, you will have to pay to see your credit score. The Fair Credit Reporting Act doesn't give consumers the right to view credit scores every year like credit reports. The article suggests only making a purchase to view your credit score from any of the three Fair Isaac bureaus: Equifax, Experian, TransUnion, or directly from Fair Isaac.

There are two reasons why:
- The other companies selling credit reports and bureaus are usually not affiliated with the three bureaus or Fair Isaac and they intend to sell your information to the highest bidder. Whereas the bureaus intend to make their money on people sticking around for the trial service, these independent companies profit off selling your information.
- The bureaus and Fair Isaac already have your personal information, why give your sensitive information to yet another company that doesn't need it? When I give Equifax my social security number, it's used as a way to look up my credit report. Who knows what happens when I give it to some fly-by-night company?

If you have had problems with incorrect credit reports and/or scores, feel free to contact us.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Allison Young of the Atlanta Journal-Constitution has written an article about credit report errors. Equifax mixed Robyn Mueller's credit information with her twin brother's, merging the two individual's debts and bringing Ms. Mueller's score down. Her Equifax report differed greatly from her score from two other credit reports.

Mueller sent Equifax repeated dispute letters beginning in 2006 — and even copies of each sibling’s driver’s licenses, pay stubs and other records — to prove they are different people. But the problem wasn’t fixed until last summer when she sued the Atlanta-based credit bureau.

Federal law is supposed to regulate and require that errors in credit reporting be fixed as soon as possible. However, the article argues that "consumer watchdog groups" insist that credit bureaus do little to investigate and correct credit report errors. Often times, an automated system is used that reduces a complex problem into a simple code. When bureaus refuse to correct errors, the FTC allows consumers to sue to fix the problem.

But nobody knows for sure how often credit bureaus make errors or fail to correct them. Regulators at the Federal Trade Commission, which is responsible for enforcing the Fair Credit Reporting Act, are expected to announce plans for a major nationwide survey of credit report accuracy later this year.

The article goes on to say that the FTC has no idea how often peoples' credit information is mixed up. However, most of the time it is people with similar Social Security numbers, names, etc. A 2004 survey is cited where it was noted that out of 1,578 consumers, only 54% had ever looked at their credit report. 18% of those people had disputed information in their credit file.

When seeking to correct an error in your credit report, one of the most important things you can do is keep detailed records of your attempt to correct the error.

The article also lists several ways you can protect yourself, such as review your reports, dispute errors, notify the lender, provide evidence and complain to regulators. Finally, you should hire a lawyer.

If the credit bureau refuses to correct the error, talk to a lawyer who specializes in Fair Credit Reporting Act cases. The law allows attorneys to collect their fees from the credit bureaus if you win your case.

If you have had problems with fair credit reporting feel free to contact us.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

We have often sued debt collectors and credit reporting agencies (Equifax, Experian, Innovis, and Trans Union) for working hand in hand to illegally force consumers to pay money they don't owe. It may be because the consumer never owed the debt or that the consumer discharged the debt in bankruptcy - but by "parking" an account on the consumer's credit report, money can be taken from the consumer in order to restore the consumer's credit report.

According to this press release, Trans Union will now offer the listing of Fair Debt Collection Practices Act cases to collectors to see if the debtors in the collectors' database have filed suit.

Here is the heart of the press release:

TransUnion announced today that it will utilize data from FDCPA Case Listing Service LLC to provide an added feature for batch records delivered via TransUnion's Collections Prioritization Engine. The new solution is named FDCPA Case Search and allows TransUnion to alert collectors about accounts that may have previously been involved in FDCPA litigation to assist collectors in determining strategy.

"Consumer lawsuits against collection agencies have become more prevalent and they can prove to be costly for debt buyers and both first- and third-party collectors," said Scott Carter, group vice president of TransUnion's collections vertical. "With an annual subscription to TransUnion's FDCPA service, collectors can utilize the solution for a cost-effective means to help handle debtor accounts that may have potential to result in a legal action."

According to FDCPA Case Listing Service, 5,383 cases were filed in 2008 against collection agencies in U.S. District Court for alleged violations of the Fair Debt Collections Practices Act (FDCPA). This represents a 41 percent increase in FDCPA litigation in 2008 in Federal Court over 2007 case volumes. Case volumes in 2009 are expected to exceed 7,300 for the calendar year.

"This is a great day for agencies, debt buyers, and creditor rights law firms," said Bill Pinkney, founder of FDCPA Case Listing Service LLC. "So many companies have approached us looking for a completely integrated solution to accompany their current work flow strategy. Our product is a perfect complement to TransUnion's Collection Prioritization Engine which is why we've partnered with them. Given the increases in placement volumes, the ability for agencies, debt buyers, and creditor rights attorneys to accurately and systemically identify these accounts is critical."

It will be interesting to see what collectors do with this information and it will provide an interesting area for us to conduct discovery in to see if the collector knew our client was represented or how our client was treated differently because he or she had previously filed suit against an abusive collection agency.

If you are dealing with harassing debt collectors and you live in Alabama call us at 205-879-2447 or fill out our website contact sheet or fill out the contact form to your left on this blog. We look forward to helping you and we can also send you our free reports on debt collectors calling third parties and leaving illegal voicemails - just let us know you would like these.

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

We understand that the economy is in a serious slump. The government is buying shares in banks. Companies are going bankrupt. Billions of dollars of value are being wiped out in stock market declines. What does this mean for the average Alabama consumer with respect to debt collectors and credit reports?

It is now harder than ever to pay debt collectors. On the other hand there is and will be even more bad debt sold to debt buyers or assigned to collection agencies. The legitimate and honorable debt collectors will stay within the law and will be creative in finding ways to help consumers pay debts that are owed. But many debt collectors will cross over the line. The idea is when there is a lot of noise, you have to shout louder to be heard. So many demands now exist for our money that for debt collectors to get our attention, they have to (in their minds) violate the law in order to be paid.

These violations will include threatening to garnish wages or put a lien on your house before filing suit and before having a judgment. It will also include threats (either directly or indirectly) that not paying for a credit card is a crime that can lead to prison. It will also include filing suit on cases well beyond the statute of limitations. Calling third parties - neighbors, co-workers, family members, church members, etc.

With respect to credit reports, debt collectors will be more tempted to put false information on credit reports knowing how important it is, with tight credit markets, to have an excellent credit score. Its hard enough to get credit right now but trying to do so with false collection accounts on your credit report is truly difficult.

Its not just debt collectors that understand the power of credit reporting to "wrench payment from debtors" (as one federal court famously said) - credit card companies know this as well. We have seen more and more cases of credit card companies tell, for example, widows who were not on the credit card that they are responsible for paying their dead husband's debts "because you were married". We have seen credit card companies say that there is no identity theft if your spouse or child stole your identity. We have also seen identity theft victims be rejected by credit card companies who say since a single payment was made by the innocent spouse that somehow the innocent spouse had "agreed" to pay the entire $15,000 balance. Absurd positions but everyone is wanting to get paid and so many companies are willing to cross the line in order to persuade Alabama consumers to pay debts that they do not even owe.

The solution is to educate yourself. If you have questions consult with an experienced consumer attorney. Document all your experiences and interactions with debt collectors very carefully Pull your credit reports and monitor what is on there carefully and dispute false accounts and false information.

Please contact us through our website or by phone at 205-879-2447 if we can be of assistance to you in any way. If you would like one of our free reports on debt buyer lawsuits, collection calls, or collectors calling your neighbors or co-workers, let us know and we'll send those out to you right away.

(I wrote this in October and then forgot to "publish" it - just ran across this and decided it is even more true today than when I wrote it last year. Hope it is helpful to you).

You can also sign up for our free email newsletter sent out every Thursday morning - we cover topics such as the one in this post. We would love to include you! Just fill out the form below:

Glad my Bank of America cases are closed - check out this article by the Consumerist.

Let's hope our tax money doesn't get sent to these jokers.

Given Bank of America's need for cash, it shouldn't surprise us to see these types of banks breaking the law more and more. Those pesky rules about accurate credit reporting just get in the way at times. You can read some frequently asked questions and answers on our website and if you are dealing with false entries on your credit reports, let us know.

We recently added an article that discusses your right to have correct and accurate credit reports. Our credit reports are very important particularly when credit is tight in these "interesting" economic times.

Make sure you pull your reports, review them, dispute any items that are false, and then if you still have errors feel free to contact us. Taking these steps will make sure you not only have the right to have accurate reports but that you actually do!

Getting rid of credit report errors is critical - particularly given our economy right now. If you have a negative account this could cause your credit card companies to slash your available credit or even close out your account. If the negative account is in error and should not be on your report, this can be particularly frustrating.

One thing we see over and over is clients who have "disputed" directly with the furnisher of the false information and they have not disputed with the credit reporting agencies (Equifax, Experian, Trans Union, etc). This is a fatal flaw if you intend on suing under the Fair Credit Reporting Act (FCRA).

We recently wrote an article on our website "Alabama Consumer" that explains why you must dispute through the credit reporting agencies. We hope this is helpful to you. Remember to send your disputes by certified mail, return receipt requested.

Please contact us if you have questions about credit reporting errors or how to go about disputing false information on your credit reports.

We sometimes face the question of "Do I really have to spend five bucks on certified mail with the green card coming back" when our clients are mailing dispute letters to credit reporting agencies (Equifax, Experian, Trans Union, etc) or to debt buyers (Midland, LVNV, Unifund, etc) or collection agencies (AmSher, NCO, etc). The answer is YES!

We explain this in more detail in our new article on this subject but the basic reason is proof. Proof the person or company you are sending the letter to actually received it. If it is important enough to send, spend the five dollars to make sure they get it.

Please feel free to contact us particularly if you are dealing with abusive debt collectors or credit reporting agencies who will not correct false credit information.

Our friend Denise Richardson has posted a blog about the Federal Trade Commission spoofing the freecreditreport.com commercials.

The FTC's spoof video reminds consumers that the only truly free (and legal) way to get a credit report online is with AnnualCreditReport.com instead.

If you have had problems with credit reports, feel free to contact us.

At the end of January we filed a federal lawsuit in Birmingham, Alabama against the debt buyer Midland Credit for refusing to stop reporting false information on our client's credit report. We also sued the consumer reporting agency of Equifax for participating in this wrongful reporting.

As we have seen repeated over and over in the courts of Alabama, Midland sues a consumer without any proof being offered at trial that the consumer owes Midland any money. The trial court tells Midland the consumer does not owe any money. The consumer then disputes the credit reporting after noticing that Midland is reporting on the consumer's credit reports. Amazingly, Midland tells Equifax to keep the false reporting.

We sued Midland for violating the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA), and state law.

If you are dealing with Midland or other similar debt buyers, know your rights and take action immediately.

Anthony Bush with Anderson Nelms & Associates filed a case on January 22, 2009, against Beneficial Assurance LTD, Inc., Homecomings Financial, LLC, America's First Federal Credit Union, Credit Bureau Services International, Inc. and Experian.

This case arises out of a bankruptcy discharge that the plaintiff received several years ago (2007) but the defendants continued to report discharged debts as having a balance owed. A discharged account must be listed as a zero balance as no money is owed to the defendant/creditor.

This lawsuit alleges violations of the Fair Debt Collection Practices Act, Fair Credit Reporting Act and state law including deceptive trade practices.

This type of misconduct (leaving false balances on accounts that have been discharged) has been going on for some years and we have filed numerous lawsuits over the last three years related to this but creditors and collectors continue to violate the law in attempts to extort money out of consumers who no longer owe the creditors and collectors any money. We wish Anthony Bush the best of success with this suit in his efforts to help encourage creditors and collectors to obey the law.

Our office filed this month our twentieth federal lawsuit against the famous debt buyer Midland for suing our client in a collection case, losing the collection case, and then refusing to remove the false credit reporting from our client's credit report. The three major credit reporting agencies (Equifax, Experian, and Trans Union) were also included in the suit.

This is a situation we see happening again and again with debt buyers in Alabama. They sue in small claims court or district court. They have no proof. They show up to trial with no proof other than the pipe dream of trying to prove their case through a consumer/defendant who has no idea about whether or not the debt buyer owns the debt. Then the debt buyer loses. Then the debt buyer tells the credit or consumer reporting agencies (Equifax, Experian, and Trans Union) to keep the false credit reporting on the consumer's credit reports.

Our clients have received five judgments against Midland in federal court but the wrongful conduct continues.

If you are sued by Midland, or any of these other junk debt buyers, please make sure you protect yourself by learning about your options and taking immediate action.

A lawsuit was filed this month in the Middle District of Alabama against the well known debt buyer from California Midland Credit Management and Providian Bank. In the suit, our friend Anthony Bush represents Frederick Myers who claims he was contacted by both Providian and Midland on a debt that is not his. He disputed it but still Providian sold it to Midland for collection purposes and ultimately Midland went so far as suing Mr. Myers in small claims court.

We know Anthony Bush sees this as well as we do - so many of these debt buyers are filing suits with no proof and even suing people who do not owe any money to the debt buyers.

We wish Mr. Myers the best of success in his case that alleges violations of the Fair Debt Collection Practices Act (FDCPA), Alabama Deceptive Trade Practices Act, and state law (negligence, harassment, and invasion of privacy).

If you are dealing with a debt buyer, make sure and educate yourself so you know what your options are and what course of action is best for you.

A recent Smart Money article by Anne Kadet lays out in a very clear manner what is wrong with the credit reporting industry (Experian, Equifax, and Trans Union). Rather than summarize this article, read it. Then read it again - its that good and important.

Here is an excerpt to show you why this article is critical:

So suppose there’s a whopper of an error on your credit report. Suppose it says you’re dead. That’s what Ken Clark, a financial planner in Little Rock, Ark., was told when he tried to buy his wife a minivan. The auto dealer called Clark a con man because his report was marked “deceased.” When Clark called the credit bureaus to report that he was still breathing, he learned that the real authority on the matter was a Utah bank that issued him a credit card and later reported him dead. To fix the error, Clark had to send a notarized letter and a copy of his utility bill to the bank, which in turn assured the bureaus that he was alive.

Clark’s story sheds light on how the dispute process works. Credit bureaus say they usually need to check with the lender because 30 percent of disputes are filed by shady credit-repair companies that challenge all the negative information on a consumer’s report, regardless of its validity. Bureaus also have to deal with consumers who pull stunts like concocting official-looking statements on phony letterhead; one bureau says it recently got a letter from “Banke [ed.-this “typo” is intentional, replicating the original] of America.” To sort the good from the bad, the industry sends almost everything through the automated system e-OSCAR (Electronic Online Solution for Complete and Accurate Reporting), which forwards consumer disputes to lenders for verification.

Here’s where the trouble begins. Rather than call the lender or send it the consumer’s letter and supporting evidence, the bureaus zap the documents to a data processing center run by a third-party contractor. This system yields considerable savings. Equifax reduced its per-dispute cost from $4.50 to 50 cents by outsourcing the work to Costa Rica and the Philippines, for example. But consumer advocates say these workers are under enormous pressure to process disputes and forward them to lenders as quickly as possible. While the bureaus say quality is the overriding factor, employees deposed in civil suits describe a harried pace. One TransUnion manager testified that workers were expected to complete up to 22 cases an hour. An Equifax worker estimated she was allotted four minutes per dispute. To process the letters so rapidly, the workers summarize every complaint with a two-digit code selected from a menu of 26 options. The code “A3,” for example, stands for “belongs to another individual with a similar name.” The worker can also add a single line of commentary. The two-digit code and short comment is the only information the lender receives about the dispute.

To protect yourself, pull your credit reports, review them, dispute the errors, and if the errors remain file suit against the responsible parties. To learn more about the Fair Credit Reporting Act (FCRA), feel free to go to our website or contact us for a free consultation.

(Thanks to Denise Richardson for pointing out this great article to us and thanks to Anne Kadet for writing this!)