BEWARE OF DEALERSHIPS USING CARFAX TO CHEAT CONSUMERS AND COMMIT FRAUD.

Carfax has been around for several years now, and, given the advertising, many consumers think that it presents an accurate vehicle history when buying a used car.

Well, sometimes.

Carfax will gather information from participating states’ Department of Motor Vehicles and participating dealerships and repair facilities.  Note the word “participating”.  If a body shop or a dealership does not report some vehicle history items to Carfax, then these items will never make it onto a Carfax report.

More important, Carfax does not have access to insurance claims records, which is where the goldmine really is.  When someone wrecks their car and files an insurance claim to fix it, this claim information will go to LexisNexis (used to be Choicepoint, before LexisNexis bought Choicepoint from Equifax), which maintains the information in a proprietary database.  You cannot just call up LexisNexis and get a copy of the report unless you are an owner of the car.  So, effectively, you do not have easy access to what probably is the most valuable source of information about vehicle history.

Also, Carfax suffers from “reporting lag,” where information which should belong on a Carfax report does not wind up on the Carfax report for up to six months.  This one is baffling, because Carfax has the ability to gather and report the information it does have pretty much immediately.

Dealerships know about these flaws in Carfax, and use them to trick consumers.  Dealers, when retailing a car with known collision damage, can pull a Carfax and find out if the Carfax is “clean”.  The car may have damage and the damage may be easily observed by any competent inspection of the vehicle, but if the car has a clean Carfax report, you can bet that many dealers are going to try to retail the car.  The alternative for a collision-damaged car is a wholesale auction, and the dealers do not make any money when they have to auction a car.  On the other hand, dealers make their best money retailing used cars to consumers.  There is definite incentive to cheat.

So, if you are buying a car and you get a “clean Carfax” from the dealer, insist that the dealer also provide you with its inspection report, to see if the dealer’s technician has noted any collision damage.  Or, before you buy (particularly if you’re spending a lot of money on the car), insist on having your own mechanic inspect it.

And, if you’ve been cheated with a collision-damaged car or a prior lemon with a “clean Carfax,” then call our firm.

Thank you for reading.

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Seungtae Kim v. BMW Financial Court Case

Seungtae Kim v. BMW Financial is a case which was tried in federal court in Los Angeles, in which the jury rendered a verdict in plaintiff’s favor.  Plaintiff Seungtae Kim, a Korean doctor of Eastern medicine, had his identity stolen by a former friend and colleague.  The identity thief used Seungtae’s identity to buy a BMW, which was later repossessed because the identity thief did not maintain his payments.  BMW Financial and two of the three major credit bureaus then reported the repossession on Seungtae Kim’s credit reports.  Seungtae Kim disputed in writing with the credit bureaus and also sent identity theft police reports to the bureaus and to BMW Financial, but BMW Financial insisted that Seungtae Kim had colluded with the identity thief to purchase the car.

The trial proceeded on theories of the federal Fair Credit Reporting Act and the California Identity Theft Law.  The jury returned a verdict in Seungtae Kim’s favor for $430,000.00.  The judge then added attorney’s fees and costs pursuant to the Fair Credit Reporting Act and the California Identity Theft law.  The total verdict was close to $900,000.00, one of the largest verdicts of its kind in California under these laws.

BMW Financial appealed the verdict but the 9th Circuit Court of Appeals rejected BMW’s appeal and upheld the verdict in Seungtae Kim’s favor.

Read the Full Article Here on SuperLawyers.com.

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Identity Theft and Credit Damage – The Importance of Getting a Police Report

If you find yourself a victim of identity theft, there are three essential actions you need to take immediately:

  1. Notify your bank(s) and credit card companies of the identity theft. If you have already identified some fraudulent charges, report them immediately.  Close out any affected credit cards.  (Note: just because identity thieves steal one card does not mean they have access to other cards you may own.  You will have to use your best judgment as to which cards to close and which ones you should not close.  If you have any doubts about a credit or debit card, close it, and ask the bank to issue you a new account.
  2. Obtain a police report! Make several copies.  The banks and credit card companies frequently will not take action on a claim of identity theft unless you provide a police report.  The reason is simple: there are, unfortunately, people who falsify claims of identity theft to avoid paying their bills, but these deadbeats frequently do not file a police report because a false police report subjects a person to criminal prosecution.  The banks and the bureaus see the filing of a police report as a “bona fide” that the person making the claim of identity theft is being honest, and is not just making the claim to avoid paying bills.
  3. Obtain copies of your credit reports with the three major bureaus: you can get one free report from each of major credit bureau (without credit scores) once a year through annualcreditreport.com. You need to review your credit report and promptly dispute any entries that may be the result of an identity theft.  Dispute not only the tradelines—the sections showing your history with a given bank or lender—but also anything like a name you don’t recognize or an address you don’t recognize.  Identity thieves can add false name variations (“Joe M. Jones” vs. “Joe L. Jones”) and false addresses when they steal your identity.

You need to take these three steps at once.

Should you sign up for credit monitoring?  In my opinion, if you can get it for free or at a very, very reasonable price, and if it makes you feel better, then you can sign up for it.  I personally do not have credit monitoring because I check my online bank pages frequently and I also check my credit reports periodically.  I don’t necessarily recommend against credit monitoring; I just don’t like to see people pay good money for it when, in all but the most extreme situations, it’s probably not necessary.

I hope this short little blog entry helps you.

Copyright © 2018 by Robert F. Brennan.  All rights reserved.

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Thank You John Oliver… But That’s Only Half the Story!

I really appreciate John Oliver bringing to people’s attention the problems with debt collection and credit reporting of old debts, particularly medical debts.  However, consumers need to know quite a bit more.  I am lucky to have been invited onto KPCC Radio 89.3 on the morning of July 7, 2016 to discuss this problem which faces so many consumers in today’s world.  I hope my interview gives you a better insight into the problems, as well as some solutions which you may find useful.

LISTEN HERE

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The Perils of Purchasing a Used Car

Planning on buying a used car soon? Then first open your eyes – very wide. In our office, over the years we’ve seen it all. Frauds perpetrated on used car lots against California consumers are common, and may be getting worse.

There are various types of fraud:

What kinds of fraud are there? To name a few, the dealer forging your signature on documents, tampering with the odometer, falsifying figures or terms on a lease, and lying about the previous ownership history (for example, failing to disclose that the car was a prior rental). One of the most common types of fraud encountered by our clients is being sold a used car with undisclosed, extensive collision damage.

Often the consumer, before purchasing the vehicle, asks the salesperson if the car was ever in an accident, and that salesperson indignantly replies something like this: “Absolutely not! If it had been in an accident I couldn’t sell you this vehicle even if I wanted to.” At some point later, when you discover to your chagrin that the car indeed had sustained major collision damage, the salesperson’s false claim may play back in your mind, but be assured that the same salesperson is never going to admit to having made such a representation.

Actually, a lot of dealerships have become more brazen about committing fraud and will even claim they are not obligated to disclose any structural accident damage to a consumer before the sale, even though this is complete nonsense.

The Moral of the Story:

Don’t believe anything a used car salesperson tells you, especially if they aren’t willing to put it in writing. Just don’t buy it if you hear, “The previous owner is starting a family and just needed to get a bigger car,” or, “The vehicle was kept in mind condition and belonged to the owner’s wife,” or the salesman’s uncle, brother-in-law, etc. For all you know, the car could have sustained massive frame damage, been declared a total loss by the insurance company, then sold to an auto auction without a salvage title, from whence it finally ends up before you on the used car lot. Before you buy, get the vehicle checked out by a good mechanic at a reputable auto body repair facility. Also, demand a copy of the car’s repair history.

CarFax or TrueCar Do Not Necessarily Contain All of the Information about Vehicle History

Just because a car has a “clean Carfax” does not mean that it is a clean car. Carfax only reports vehicle history which is reported to it, and insurance companies—the ones who would pay for repairs after collisions—do not generally report to Carfax. Carfax also sometimes does not have vehicle information for many months after a consumer purchases the vehicle. Thus, when the consumer bought the car, it had a “clean Carfax,” but six months later there is a report of a collision or a prior rental history on the Carfax. Carfax is a tool, yes, but far from a perfect one.

Most consumers unfortunately do not follow this advice:

A few weeks after purchase the death trap is rattling down the road, falling to pieces. The consumer takes it into a body shop for an inspection, or at a dealership for repairs, and is informed that the car had sustained severe collision damage such that its structure now consists of twisted metal and Bondo. The consumer is told, unfortunately, that the vehicle can never be repaired adequately to make is safe to drive, or bring it back to the manufacturer’s specifications, and that to even attempt to do so would cost thousands of dollars.

Starting Your Case:

This is the point at which your legal case can begin. Armed with the inspection report (which should include color photos highlighting the accident damage), you are ready to do battle with the dealership that ripped you off. Try to make suitable arrangements so that you won’t have to use the vehicle if the inspector tells you it is not safe to drive. Write up a diary detailing everything which transpired to this point, complete with dates, first and last names, telephone numbers, and all misrepresentations made to you. Write a certified letter to the dealer giving the facts and demanding your money back.

Don’t be surprised

At this point, the unethical used car dealership will try to blame it all on you. This callous attitude may be difficult for you to comprehend, but it is nevertheless commonplace. To reiterate, make sure you get a good, thorough inspection of the vehicle detailing all of the damage noted. Keep in mind that in the legal sphere, complete and accurate documentation is vital to your case.

Please protect yourself:

To help avoid getting yourself into this depressing predicament, again, do not believe any “sales puffery” about the car from the dealership and do take the vehicle in for an inspection by a qualified mechanic and body shop before you buy. By a “doubting Thomas.” By doing so, you may save yourself more money and headaches than might believe.

*The above is an abbreviated and slightly edited article of the same title by Mr. Brennan

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Getting Started on Your Lemon Law Case: the Virtues of a Pre-Lawsuit Settlement

If your vehicle turned out to be a “lemon” that is really stressing you out, call the Law Officers of Robert F. Brennan. Our firm has been successfully helping consumers with their Lemon Law cases for over two decades, and as our practice has evolved, we have come to the conclusion that sometimes the best place to start is a process we call “pre-litigation,” which means trying to settle your case without even having to file a lawsuit! This streamlined approach has the benefit of saving you a lot of time, cost and energy.

How this works is you first contact us, provide us with some basic information about yourself, your vehicle and the main recurring complaint you have with it. We may recommend to you that we file a lawsuit right away, under certain circumstances. However, if we feel that pre-litigation assistance may get the results you want, we will recommend that as the first action.

In reviewing your case we will need to know the current age and mileage of the car, whether it is still under warranty, the main recurring complaint, and how many repair orders you have for that complaint.

If your case appears to have merit, we will then ask you to either email or fax over the relevant documents for our review. Such documents would include the purchase or lease contract, any documents you had to sign regarding the purchase or lease, and the pertinent repair orders from the dealerships where you made your complaints.

Then we would send a demand letter directly to the manufacturer of your car. There are three possible outcomes in a pre-litigation case, as follows:

  1. The best outcome would be an offer from the manufacturer to do a full repurchase of your vehicle. This would usually include reimbursement for all you monthly payments, down payment, registration fees, and a payoff of the loan. There would be a mileage offset based upon the miles on your car when you first took it in to the dealership for the main complaint. Once the case is settled, you would return the vehicle to the manufacturer and have it out of your hair.
  2. A second option the manufacturer may offer is called a “cash-and-keep.” In this scenario, with your agreement we would negotiate the best settlement (amount of money) we could obtain and you would keep the vehicle. After the settlement is over, most clients sell their vehicle and use their settlement money, for example, to make the down payment on a better car. But the client is free to do what he likes with the money.
  3. The third and last option is the manufacturer could reject the claim altogether and offer nothing. At that point we would review your case again. If we feel confident about the strength of your case, we may recommend filing a lawsuit against the manufacturer for violating the Song-Beverly Consumer Warranty Act, or California Lemon Law, which is there to protect your warranty rights.

In summary, if you are hoping for a way out of your lemon car, possibly without having to go through a lawsuit, call us now and we can advise you whether we recommend the pre-litigation route. We will try our very best to make you a happy client.

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When Is It Necessary to Bring a Lawsuit for False Information on Your Credit Report?

The consumer credit reporting system in this country is set up to “convict” consumers without any messy, expensive or inconvenient due process. A bank or a credit card company or a debt collector simply notifies one of the three major consumer credit bureaus (Experian, Equifax or TransUnion) that a consumer owes a debt, and, unless that record is corrected, that consumer is deemed to owe that debt in the eyes of any and all creditors who access the consumer’s credit report. The negative credit report (called a “derogatory” in the industry) will stay on the consumer’s credit report for seven years, in the case of a report of a late payment, a default or a charge-off. For a tax lien, judgment or a bankruptcy, the derogatory remains on the consumer’s credit report for 10 years.

How to Handle False or Inaccurate Credit Reporting

If you have a valid derogatory on your credit report, obviously you need to make arrangements to pay it and bring it current. The following steps are intended for those times when you have false or inaccurate information on your credit report. Under federal and state law, credit bureaus and creditors are obligated to remove false or inaccurate information on your credit report upon receiving notification. Remember that, under federal law, you need to dispute with the credit bureaus, not just with the creditor or creditors (banks, debt collectors, etc.) Always send dispute letters both to the credit bureaus and to any involved creditors.

Here are the steps to take to have false or inaccurate information removed:

  1. Prepare a dispute letter to any agency which publishes the false information you are challenging. Be very specific in your dispute letter and include copies of any documents which prove that the derogatory information is false. Keep the letter factual and professional in tone.
  2. Send the dispute letter via certified mail to the credit bureau or bureaus which are reporting the false information.
  3. Definitely do not do a dispute by phone. You will need to have a written record of your dispute.
  4. We are recommending against doing disputes online. For one thing, you do not get a complete record of what you send to the bureaus, and cannot send along any supporting documentation of your dispute. Also, some of the credit bureaus are sneaking in binding arbitration clauses for consumers who dispute online, so consumers who dispute online could lose their right to get justice in the courts with a jury. Arbitration almost always favors big corporations, which is why so many big corporations try to sneak binding arbitration clauses into any agreement or contract that any consumer signs. However, there is no binding arbitration clause where a consumer disputes via certified mail.
  5. Send a cc of your dispute letter to the creditor, debt collector or bank which sent the derogatory credit information to the credit bureau or bureaus. Also send this via certified mail.
  6. The bureau has 30 days to reinvestigate and correct. If you are in a hurry because of, say, a pending loan application, the bureaus have an expedited procedure which you can learn about by contacting them.
  7. The bureau or bureaus will notify you of the results of their reinvestigation. If the bureau or bureaus does not delete or correct the information, you may also wish to consult with an attorney.

My firm specializes in these cases and we have a track record of excellent results with very satisfied clients. We serve clients in Southern California, or who have had their credit damaged in Southern California. If you live elsewhere, go to www.naca.net for a referral to a credit damage specialist attorney in your state.

Copyright © 2015 by Robert F. Brennan, Esq. All rights reserved.

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The First Steps to Take in Disputing Your Credit Damage Case

According to research in Elizabeth Warren’s recent book, A Fighting Chance (p. 313, n. 154), studies have found that an estimated 25 percent of credit reports contained errors that were serious enough to cause a denial of credit. Per Warren’s research, “The types of errors found across studies included mixed files (where one consumer was mistaken for another, and vice versa), identity theft, incorrect payment history, ownership dispute, and “re-aging” of debt” (where a delinquent or charged-off debt is given a new, more recent “date of first delinquency” to keep it reporting on the credit report for a longer period of time).

If you have recently reviewed your credit reports and found a serious inaccuracy that could be affecting your credit, there are certain steps you should take right away to protect your rights and hopefully get the inaccuracies removed.

The first thing you should do is prepare a good, quality dispute letter that addresses the inaccuracy head on. There is a lot of information out there about how to write a dispute letter, and sometimes that information is not only incorrect, it is actually harmful to your potential case. It is very important that your letter include all of the following: the date of your letter at the top; the name of the credit reporting agency you are sending the letter to (for example, Experian, Equifax, or Trans Union) and their address (you can typically get the address from the credit report itself); and the exact account and account number you are disputing as it appears on the credit report.

Make sure your letter clearly spells out what is inaccurate about the reporting of the account on your credit report. It could be, for example, that the credit report is stating that you are 30, 60, 90 or 120 days delinquent on the account when in fact you always paid the bills on this account on time and for the full amount, and you have documentation to prove it (such as bank account statements or cancelled checks.) If that is the case, clearly state so in your letter and then attach the documentation showing you were never late on that account. Ask them politely to correct the wrong information at once.

Always send your letter by certified mail, return receipt requested. Always send a cc of the letter to the furnisher (creditor, bank, debt collector) that furnished the false credit information.

If you need help with certified mail, your local post office can assist you. Remember to keep copies of everything you send and everything you receive, in particular the signed and stamped green return receipt card showing the credit bureau received your letter.

Never dispute via the bureaus’ online dispute website—yes, it is easier, but you do not get a copy of your dispute and you may be inadvertently waiving your right to bring a lawsuit by agreeing to an unfair binding arbitration. Likewise, never dispute with a phone call. It takes more time, but you always want to dispute via certified mail to the credit bureau or bureaus involved, cc to the furnisher of the information.

Typically, you would receive in the mail a written response to your dispute from the credit bureau within about 30 days. It may say something like, “Account Updated.” If so, check the report to see if they updated the account correctly. If they did not do so, call us. If the credit bureau responded to your letter something like, “Account Verified as Reported,” that means they don’t believe you and are not going to correct the inaccuracies on that account. In that case, definitely call us.

If you are the victim of identity theft regarding inaccurate credit reporting, by all means go to the police department and give a police report. Be complete, accurate and as thorough as possible and include any relevant documentation. Then get a copy of the report for yourself and make sure it is accurately stated, and that it is dated, signed by both you and the officer who took the report, and that it contains a case number.

Once you have your police report, write your dispute letter to the relevant credit bureaus and attach copies of the police report to assist them in their investigation. It is the credit bureau’s duty to take your identity theft claim seriously. They should contact the furnisher of the identity theft account and do whatever is necessary to properly investigate. You should also notify the furnisher with a certified letter and copy of the police report.

If the credit bureau, after its investigation, fails or refuses to remove the bogus account, then call us right away.

Hope the above helps you in resolving any inaccuracies on your credit report. If not, don’t hesitate to contact us, as sometimes litigation is the only way to get the credit bureaus and creditors to do the right thing. You can also contact us if you have any questions about any of the steps outlined above.

Copyright © 2015 by Robert F. Brennan, Esq. All rights reserved.

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The Damage Done: How to Determine Your Losses in a Credit Reporting Case

One of the most frequent questions we hear from potential new clients after, “Do I have a case?,” is, “How much will I get?” Both of these questions actually highlight the two basic dance steps of a civil case: Causation and Damages. Causation refers to proving, with actual evidence, that someone(s) caused you harm, or damages. If you can do that, then you may have a case. The damages, essentially meaning the harm you suffered, goes to the “how much” part. In short, you have to prove someone caused an illegal act to occur, that you were in fact harmed by that illegal act, and by how much.

Sometimes our new callers are quick to explain the various ways they were harmed by the credit bureaus (e.g. Experian, Equifax and Trans Union) and their “furnishers,” meaning the entities, such as banks and businesses of all kinds, that provide financial information about you to the those bureaus via computer. Other times clients are not aware of how they have been harmed, but only have a strong sense that they were victims of an injustice.

A Plaintiff (one who brings a lawsuit) can claim different kind of damages in a credit damage case, and this is explored in the discovery phase of litigation. A very important type of damages is referred to as “emotional distress.” One of our past clients declared that he “suffered from migraine headaches, sleeplessness, a feeling of extreme frustration and helplessness at not being able to resolve this matter, embarrassment, humiliation, emotional upset and difficulty in keeping up [his] spirits and sociability.” Another former client testified that she “feels stigmatized, has fights with her partner, difficulty sleeping, recurring fear, vomiting, and sick stomach.” It should be noted that some people express this harmful distress quite openly, others try to keep a stiff upper lip, but both types can still suffer severely.

Regarding Plaintiff’s emotional distress damages, the Defendants (the parties being sued) often ask in discovery questions whether Plaintiff has seen a psychiatrist or psychoanalyst or psychologist for their emotional distress, but that is not required at all. People handle stress differently and in different ways. Some might talk to a close friend, or a minister, or take long walks. Nor do you have to claim physical injuries to have a valid emotional distress claim.

Another broad type of damages is “Actual Damages”. Did your auto insurance premiums go up? Did your interest rates suddenly increase on your home loan or credit cards? Were you turned down for a credit card or home loan or car loan, or get a good rate when the interest rates were low? Were you unable to rent an apartment? What you want to do is get those turn-down letters. (Remember, actual evidence.) Sometimes the creditors will even name the reporting of one of the specific credit bureaus as the reason for the turn-down.

There is also “Economic Damages” in the form of damaged credit rating resulting in an ability to get credit. According to financial expert Thomas A Tarter, negative credit items on your credit report can reduce a consumer’s credit score resulting in a higher cost of credit. Tarter found that even a reduction of five points on your credit score could result in the cost of credit increasing. With lower credit scores, especially below a certain threshold, you may be required to make higher down payments.

Finally, there are “Punitive Damages” Plaintiff may claim against defendants for “willfully” (knowingly and recklessly) failing to comply with the requirements imposed by the Fair Credit Reporting Act. Punitive damages are not likely to be assessed in most cases, by any means, but if the violations were flagrant enough, they very well could be.

Returning to the caller’s question, “How much will I get?”, the answer of course depends to a large degree on the strength of your case. How strong are the facts and the evidence? How willful were the defendants? As to damages, what did you have to endure? How persistent and tenacious were you in your efforts to handle the matter yourself before turning, out of desperation, to a law firm to help you? How well is this documented? How much emotional distress did you endure? How did it affect your attempts to obtain credit? Did it affect your credit score? Were defendants’ actions flagrant? Is the harm ongoing? For the answers to those questions, we are here to help you sort them out.

Copyright © 2015 by Robert F. Brennan, Esq. All rights reserved.

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Great Article in Yahoo! Finance about Whether to Pay Old Debts–and I’m Quoted Extensively!

Dear Readers,

This article appeared today (May 13, 2014) in Yahoo! Finance and on Credit.com.  Enjoy!

What Happens If I Never Pay an Old Debt?

By Gerri DetweilerMay 13, 2014 6:30 AM

Maybe you can’t pay. Or maybe you won’t pay. Either way you have an old debt hanging out there. What if you just decide to let it go, and do nothing about it? That’s what Credit.com reader Dave, who says he can’t afford to pay off the old debts he owes, asks:

My credit card debt is roughly $12,000. I consulted a bankruptcy attorney. He said filing bankruptcy should not be my first option since the amount is quite low. And the collectors have stopped calling.  In California, is there a 3 or 4 years of limit by which the collection agency can file lawsuit? After that time, they can’t sue? Then what happens? Can they still collect but not sue? Debt still stays on credit files.  If they can’t sue me since it’s about 4 years since [it] went into collection and the attorney said filing may not be good idea for such small amount, then what?

Dave’s question is hardly unusual. Plenty of people wonder what will happen if they simply do nothing about an old debt.

“There is no law saying that they cannot try to collect after the statute of limitations has expired,” says Southern California consumer law attorney Robert Brennan. At least not in California, where he practices, and in most states it’s the same – though if you’re considering this move, you’ll want to consult an attorney who knows your state’s rules. “In California, on written contracts the statute is four years from the date of breach which, in most cases, will probably be the same as date of first delinquency.”

He goes on to explain that “under the Fair Debt Collection Practices Act, debt collectors may not make false representations in connection with collecting debts, and may not take or threaten to take legal action that cannot be taken.  So, if a debt collector threatens to sue the consumer past the statute of limitations, this may well be a FDCPA violation, and I would argue that it is. If a debt collector tells a consumer that it can sue the consumer five years past the date of first delinquency, this is a false representation made in connection with debt collecting, and is also actionable under FDCPA.”

In other words, if a debt collector threatens to take you to court after the statute of limitations has expired, you can actually sue them, in which case, they may end up owing you money.

Does any of this mean Dave won’t hear anything more about these debts? Probably not. “If a collector makes routine debt collection phone calls and does not otherwise violate the  FDCPA or mislead the consumer, the debt collector may continue to attempt to collect the debt,” says Brennan. Nevertheless, consumers always have the right to tell a debt collector not to contact them, and if the debt collector continues to call, they again may be in violation of the FDCPA.

The statute of limitations varies from state to state, and may be different for various types of consumer debts. In many states, they often range from four to six years, calculated from the last payment on the debt.

Collections & Your Credit

As far as Dave’s credit reports are concerned, these debts can’t be reported forever. Collection accounts may be reported for seven years plus 180 days from the original date of delinquency – the date he first fell behind with the original creditor. So if he missed a payment to his credit card company on Jan. 1, 2000, and it was later sent to collections, Jan. 1, 2000, is the original date of delinquency.

After that 7 1/2-year time period elapses all collection accounts related to that particular debt can no longer be reported, regardless of whether they are paid or not. There is the risk, however, that one of the current collectors sells the account to another collection agency and that creates a new collection account.

Starting Over

In addition to wondering about his old debt, Dave wonders what to do about his credit going forward:

Would you suggest I apply of secure card (can I?) even though I’ve debts in collection? And would a NEW secure card improve my FICO even though my old debts are showing up in my files?

A secured card, which requires the cardholder to place a security deposit with the issuer, is often an excellent option for rebuilding credit, and the applicant generally need not have good credit to get one of these cards since the line of credit is fully backed up by the deposit, at least initially.

When it comes to rebuilding credit, it’s usually best to start as soon as possible. It takes time to build positive credit references. One of the factors used to calculate credit scores is the age of accounts.

At the same time, however, Dave should also be thinking about ways to shore up his finances so he’ll have adequate emergency savings in case he runs into difficult times in the future. He canreview his credit reports for free once a year and monitor his credit score monthly for free at sites like Credit.com, where he will also get an action plan for improving his credit over time. As these unpaid accounts become older and his new account is paid on time, he should see his credit scores continue to get stronger.

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