FTC Announces Lower Price Cap for Extra Credit Report Copies

The Federal Trade Commission has announced that it is lowering from $11 to $10.50 the maximum amount that consumer reporting agencies are allowed to charge consumers for an extra copy of their credit report. The Commission announced the reduction in the amount from 2009 to 2010 under the Fair Credit Reporting Act, which requires the FTC each year to revise the cap originally set by statute based on the change in the Consumer Price Index. The fee is rounded to the nearest 50 cents.

During this time of economic distress, the FTC reminds consumers that this charge does not apply to the first free copy of their credit report that consumers are entitled to request from each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – once every 12 months through www.annualcreditreport.com. For details, see “Your Access to Free Credit Reports” at ftc.gov/credit. Consumers are also entitled to a free report when a company takes adverse action against them (such as denying an application for credit, insurance, or employment) within 60 days of receiving notice of the action. In addition, consumers are entitled to one free report a year if they are unemployed and plan to look for a job within 60 days; they are on welfare; or their report is inaccurate because of fraud, including identity theft.

The $10.50 charge applies when a consumer who has received a free annual credit report does not otherwise qualify for an additional free report.

Credit Default Swaps

Time-Barred Debts

There’s no doubt about it: you are responsible for your debts. If you fall behind in paying your creditors — or if you dispute the legitimacy of a debt — a debt collector may contact you.

“Time-barred” debts are debts so old they are beyond the point at which a creditor or debt collector may sue you to collect. State law varies as to when a creditor or debt collector may no longer sue to collect: in most states, the statute of limitations period on debts is between 3 and 10 years; in some states, the period is longer. Check with your State Attorney General’s Office to determine when a debt is considered time-barred in your state. You can find contact information for your State Attorney General at www.naag.org.

Federal law imposes limitations on how debt collectors can collect debts, including time-barred debts. Under the Fair Debt Collection Practices Act (FDCPA), a “debt collector” generally is any person or organization that regularly collects debts owed to others. The term includes lawyers who collect debts for others on a regular basis, but it does not include creditors collecting their own debts.

The FDCPA prohibits debt collectors from engaging in any unfair, deceptive, or abusive practices while collecting debts. It does not erase any legitimate debt that you owe. To learn more about your rights under the FDCPA, click on www.ftc.gov/bcp/conline/pubs/credit/fdc.htm.
Collecting Time-Barred Debts

Most courts that have addressed the issue have ruled that the FDCPA does not prohibit debt collectors from trying to collect time-barred debts, as long as they do not sue or threaten to sue you for the debt. If a debt collector sues you to collect a time-barred debt, you can have the suit dismissed by letting the court or judge know the debt is, indeed, time-barred.

Whether a time-barred debt — or any debt for that matter — can appear on your credit report depends on how long the debt has been delinquent: debts that have been delinquent more than seven years cannot appear on your credit report, with certain exceptions. In addition, a debt collector may not try to collect a debt that has been discharged in bankruptcy, no matter when it was incurred. To learn more about credit reporting, click on www.ftc.gov/bcp/conline/pubs/credit/fcra.htm.
Contact with Collectors

Can a debt collector continue to contact you about a time-barred debt you don’t think you owe? According to the law, if you send the debt collector a letter stating that you do not owe some or all of the money within 30 days after you receive written notice of a debt, the collector must stop trying to collect until you’ve been given written verification of the debt, like a copy of the bill for the amount you supposedly owe. The collector can renew collection activities once you’ve gotten proof of the debt.

You can stop debt collectors from contacting you about any debt, regardless of whether you owe it, by writing a letter telling them to stop contacting you. Once the collector gets your letter, it may not contact you again — except to say there will be no further contact or to let you know that the collector or creditor intends to take some specific action. Sending a letter doesn’t absolve you of the debt if you actually owe it; the debt collector or creditor still could sue you for the debt.
Future Collection Efforts

The best way to protect yourself from future collection on any disputed or partially settled debt is to get a form or letter from the creditor or collector that releases you from further obligation. To make sure the release is valid, you may want to consult an attorney. If you believe that a debt collector violated the law, you have the right to sue in a state or federal court within a year from the date the law was violated. If you win, you may recover money for the damages you suffered, plus an additional amount up to $1,000. You also may recover court costs and attorney’s fees. You also may want to report any problems you have with a debt collector to your State Attorney General and to the Federal Trade Commission.

Universal Default

Universal default is the term for a practice in the financial services industry for a particular lender to change the terms of a loan from the normal terms to the default terms (i.e. the terms and rates given to those who have missed payments on a loan) when that lender is informed that their customer has defaulted with another lender, even though the customer has not defaulted with the first lender.

This is a phenomenon that dates from the mid-1990s. Credit card companies included universal default language in their cardholder agreements at that time, due to increasing deregulation of the industry. Today, approximately half of the banks that issue credit cards have universal default language. However, since the inception of these provisions, most credit card companies have not enforced them regularly or systematically.

Every year since at least 2003, Congress has considered several bills to curb abusive credit card practices, including universal default provisions. In the meantime, the Office of the Comptroller of the Currency issued a stern advisory letter to the credit card industry regarding several of the most egregious practices. Most credit card companies have not responded to the letter.

In 2007, Citibank became the first bank to voluntarily eliminate its universal default provision.

Dirty Credit Card Secrets

My Successful Payment For Deletion Agreement

In November of 2006 I had to go the the Emergency Room. My insurance didn’t cover about $252.00 of the bill. I never paid the bill and it went to collections.

It was returned to Mountain Land Collections and Attorney Quinn Kofford to collect on it. I received the initial collection notice to which I responded with a validation of the debt request. They sent a copy of the signed medical admission papers that I signed. They then served me with judgment papers to which I responded to the court directly with a statement that stated I was made to sign under duress in order to get the medical attention I needed, and that because I was under duress I should not be held liable for the bill.

I was later served with a pretrial notice because I responded to the judgment. I appeared at the pretrial hearing and the Law Office of Quinn Kofford and his assistants were there. There was a good group of us debtors in the waiting area outside the court room. Quinn asked how many of us were there for Mountain Land Collections, about 10 or so people raised their hands. They then numbered us off and had us go off into a little side-room, where they prettty much tried to muscle us into “lets make a deal”. They were wanting to get payment arrangements of like $25.00 per month set up etc. I sat down with one of the female assistants and she right away tried to make a deal with me. I promptly told her that I was not going to pay the debt because I don’t feel I am responsible for the debt. She proceeded to question me along the lines of “so you don’t think you should pay for medical services rendered to you?” I responded I didn’t have a choice, I could have died or sign the consent. I kept on refusing to make a deal with her. She threatened to take this to trial, I indicated that I really didn’t care if it went to trial, I am not going to pay this debt. She got frustrated and referred me to the attorney.

So Quinn sits down next to me and is trying to make a deal with me. I still refuse to make a deal with him. Then he says that I need to understand that he is the opposing attorney and after looking at my case, and what my argument is, he will win if this goes to trial. I acted indifferent still. He then said he could discount his fees and interest and make a payment deal. I told him that the only way I was going to pay anything is if I was to get a payment for deletion agreement first. He asked what that was. I explained the process to him. and I also told him that I work in the credit repair industry. He wasn’t sure that it was possible, I assured him that it is possible and I explained exactly how it works.

I also told him that the marks on my credit report are already at an R9 which is the maximum damage it can get. he agreed, And I let him know that there really isn’t any motivation for me to pay if that won’t change. He agreed. He said he will present the idea to the creditor and see if they are willing to agree to the payment for deletion. He also told me that he has been doing this for 15 years and he has never heard of this approach before.

Today I got a call from their law office, I returned their call, and they said that they are willing to do the payment for deletion agreement AFTER I pay them in full. I refused that deal. I told them that I need the agreement first or else how am I to trust that you will delete it after the payment has been made? She said that If they say they will do it, they will do it. I disagreed. She then told me that “I’ll talk to my office manager about it, but it looks like it will go to trial”. I said Ok.

They called me back about 20 minutes later and they said that they would agree to put a paragraph in the repayment agreement that states that upon repayment they will agree to delete it off of my credit reports. I said great.

So now I am awaiting the deal to come in the mail to sign and deliver back to them.

What I learned is that if you are served with a judgment, it is to your advantage to respond to it and at least state your side of the story. I also learned that the attorney will schedule all of his collection accounts to appear at the court at the same time to save them hassles of returning multiple times. I also learned that they will then hustle you for a quick and easy deal that usually only benefits them. I also learned that if you don’t understand how the credit and collections game is played and if you don’t understand your consumer rights, the collectors will walk all over you to their advantage. I also learned that if you go in to the court or negotiating arena knowing exactly what you want to get out of it (in this case, payment for deletion), and hold your ground regardless of their intimidation, it’s likely you will succeed with achieving your goal.

What’s in your FICO® score

FICO Scores are calculated from a lot of different credit data in your credit report. This data can be grouped into five categories as outlined below. The percentages in the chart reflect how important each of the categories is in determining your FICO score.

These percentages are based on the importance of the five categories for the general population. For particular groups - for example, people who have not been using credit long - the importance of these categories may be somewhat different.

Payment History

• Account payment information on specific types of accounts (credit cards, retail accounts, installment loans, finance company accounts, mortgage, etc.)
• Presence of adverse public records (bankruptcy, judgements, suits, liens, wage attachments, etc.), collection items, and/or delinquency (past due items)
• Severity of delinquency (how long past due)
• Amount past due on delinquent accounts or collection items
• Time since (recency of) past due items (delinquency), adverse public records (if any), or collection items (if any)
• Number of past due items on file
• Number of accounts paid as agreed

Amounts Owed

• Amount owing on accounts
• Amount owing on specific types of accounts
• Lack of a specific type of balance, in some cases
• Number of accounts with balances
• Proportion of credit lines used (proportion of balances to total credit limits on certain types of revolving accounts)
• Proportion of installment loan amounts still owing (proportion of balance to original loan amount on certain types of installment loans)

Length of Credit History

• Time since accounts opened
• Time since accounts opened, by specific type of account
• Time since account activity

New Credit

• Number of recently opened accounts, and proportion of accounts that are recently opened, by type of account
• Number of recent credit inquiries
• Time since recent account opening(s), by type of account
• Time since credit inquiry(s)
• Re-establishment of positive credit history following past payment problems

Types of Credit Used

• Number of (presence, prevalence, and recent information on) various types of accounts (credit cards, retail accounts, installment loans, mortgage, consumer finance accounts, etc.)

Please note that:

• A FICO score takes into consideration all these categories of information, not just one or two.
  No one piece of information or factor alone will determine your score.
• The importance of any factor depends on the overall information in your credit report.
  For some people, a given factor may be more important than for someone else with a different credit history. In addition, as the information in your credit report changes, so does the importance of any factor in determining your FICO score. Thus, it's impossible to say exactly how important any single factor is in determining your score - even the levels of importance shown here are for the general population, and will be different for different credit profiles. What's important is the mix of information, which varies from person to person, and for any one person over time.
• Your FICO score only looks at information in your credit report.
  However, lenders look at many things when making a credit decision including your income, how long you have worked at your present job and the kind of credit you are requesting.
• Your score considers both positive and negative information in your credit report.
  Late payments will lower your score, but establishing or re-establishing a good track record of making payments on time will raise your FICO credit score.