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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Bob Brennan quoted in creditcards.com about issue of whether merchants can accept credit cards from minors.

Dear Readers,

I was again quoted in creditcards.com on the issue of whether merchants can accept credit cards from minors.  Enjoy the read and I hope it helps!

 

Is it OK for merchants to accept credit cards from minors?

By Elaine Pofeldt

 

Dear Your Business Credit,
Can I accept a credit card payment from a minor at a medical facility if it’s offered? – Mitchell

Dear Mitchell,
I’m going to assume that you work in a medical practice, and the reason you are asking this is to avoid accepting payments that are invalid.

If you have obtained the parental consent that’s necessary under laws in your state to treat the minor, or the minor is an emancipated youth, accepting a credit card the young person is legally authorized to use isn’t likely to present a problem, according to Robert F. Brennan, an attorney in La Crescenta, Calif., who specializes in wrongful credit damage cases, as well as identity theft cases.

If a minor incurs a medical charge and later does not pay the credit card bill, then collecting it becomes the credit card issuer’s problem, he notes. “The doctor already has his money,” he explains.

Ultimately, if a minor can’t cover the debt, it is likely to become a parent’s problem. Under the Credit Card Accountability Responsibility and Disclosure Act of 2009, credit card issuers are not allowed to issue credit cards to young people under age 21 unless a parent is a co-signer — meaning the parent has assumed responsibility for the debt — or youthful applicants can show independent proof they have the income to pay the bill. What’s more likely is that a young person who proffers a credit card is an authorized user, legally able to use the card, but not liable for the debt. Authorized users may have cards issued in their own names.

“It is extremely unlikely and rare that a minor would have a credit card without a guarantor or co-signer on the account, which would be the case if they are an authorized user on their parent’s account,” says Leslie Tayne, an attorney based in Melville, N.Y., who advises small businesses on credit and debt. “If there is a guarantor on the account, then the debt is collectable.”

To be on the safe side, I’d steer clear of accepting any cards for which a patient may be an unauthorized user — such as a card issued to another family member. While a teen who hands you a parent’s credit card likely may have the OK to use it, you can’t know that for sure unless the parent has told you so, either by phone or in person.

Generally speaking, medical providers protect themselves from nonpayments if they treat a minor by having a separate contract with the parents, according to Michael Jeffrey Gunderson, a bankruptcy attorney at Gunderson & Tharp, LLC in Chicago. “Most providers know they can’t hold a minor liable, so they get the parents on the hook,” he says.

If you don’t have an agreement like this for parents to sign, now is a good time to have your attorney draft one.

Read more: http://www.creditcards.com/credit-card-news/merchant-accept-card-minor-1585.php#ixzz31AJmu8uM
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Credit Card Scams–how to spot them, how to avoid them. Worth the short read!

Some good tips by Bank of the West about spotting and avoiding credit card scams.  Definitely should help you in avoiding identity theft or wrongful credit damage situations. Remember that you have rights under the Calfiornia Identity Theft Law and the federal Fair Credit Reporting Act if you find yourself a victim of any of these scams.

6 Ways Credit Card Thieves Try to Scam You

Don’t be tricked out of your money

Credit card fraud can be perpetrated in a variety of ways, from low-tech dumpster diving to high-tech hacking. Take note of these popular scams that could result in your card number being stolen and shared, charges you didn’t make showing up on your bill and the scammers who preyed on you nowhere to be found.

The data breach scam. You receive a text message, which claims to be from your credit card company, alerting you that your card has been blocked in response to fraudulent activity following a recent data breach. The message asks you to call a phone number to verify your account information. Like many scams, this one comes in various forms, so be on the lookout for similar ploys. For example, taking advantage of the recent Target data breach, scammers claiming to be Target representatives checking whether cards were involved in the breach, contacted consumers through text messages, email and phone calls and asked them to verify their name, address, Social Security numbers—all information that could be used to commit fraud against them. Be skeptical of these messages, especially if they request credit or debit card data or personal information, or ask you to link to another website or Web page. Your credit card company has no need to ask you to verify information. Remember, they already have it.

Mail fraud. You receive an official-looking letter from your credit card company. The letter asks you to provide your account number or other personal information in a reply envelope or by dialing a number. Don’t respond. Any unsolicited letter, email, text or social media message could be an attempt to acquire sensitive information such as usernames, passwords and credit card details—otherwise known as phishing. If you think the letter might be legitimate, confirm it by contacting the card company directly, using the customer service phone number on the back of your credit card.

Phony charity donations. You see a $2 donation to a well-known charity on your credit card. You don’t remember making a donation, but you let it slide. Don’t. The charge was likely made by thieves who have stolen your card number and are checking to see if it’s valid. If you allow the $2 charge or fail to notice it on your statement, fraudsters know they’ve hit the jackpot. Before you know it, you’ll likely be hit with expensive charges such as electronics or jewelry. As with any suspicious charge, you should dispute it immediately with your credit card provider. Although it may be a hassle, you may also want to request a new card.

Mysterious charges. You spot a charge of $9.84 on your credit-card statement from a website you don’t recognize. You check out the Web address, only to find a generic customer support landing page promising to refund 100% of your last payment. When you call the listed telephone number, you are told that the charge will be canceled. Don’t count on it. You’re credit card has been compromised by scammers ringing up small sums, hoping that you won’t notice. Contact your bank to report the charges and request a new card. If you don’t, it’s likely that the scammers will return for more.

The rate reduction scam. You get a prerecorded phone call from a company that claims to have special relationships with credit card issuers. If you pay them a fee, they say, they will negotiate significantly lower interest rates for you that will save you thousands of dollars in interest and finance charges, and will allow you to pay off your credit card debt three to five times faster. If you get such a call, hang up. The Federal Trade Commission investigators found that people who pay for these promised services don’t receive them and struggle to get refunds. Furthermore, if you give out

personal financial or sensitive information like your credit card, bank account or Social Security numbers, a scammer may charge your credit card for his/her own purchases or sell your information to other scammers.

The fraudulent activity scam. You receive a call from someone who says he’s employed by your credit card company. He warns you about suspicious activity on your card. Next, he reads your credit card number to you and asks if you are in possession of your card. Finally, he asks you to confirm the three-digit security number on the back—information your credit card company would already know. This scam is used by criminals who have already gotten hold of your credit card number, but lack the code on the back of your card used by merchants to verify that the person in possession of the card is the authorized user. If you give the scammer the code, he/she can use your credit card anywhere.

If you believe you have been the victim of fraud, immediately call your card issuer, who most likely has a toll-free number and 24-hour service to help you.

For more information, visit Bank of the West’s Personal Security Center.

Sources: bbb.org, www.consumer.ftc.gov, bankrate.com

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DEBT COLLECTORS OR CREDITORS BLOWING UP YOUR CELLPHONE WITHOUT YOUR PERMISSION? YOU NEED TO KNOW ABOUT THE TELEPHONE CONSUMER PROTECTION ACT–”TCPA”–AND YOU NEED A LAWYER WHO HANDLES THESE CASES…LIKE ME!

Hello Readers,
I just wanted to let you know that we are officially handling TCPA cases. These are cases where creditors or debt collectors “blow up” your cellphone–make repeated calls to it without your permission.
REMEMBER, AND REMEMBER WELL: NEVER NEVER NEVER GIVE A DEBT COLLECTOR OR A CREDITOR YOUR CELLPHONE NUMBER!!!!! Do I need to repeat? I hope not.
If a debt collector or creditor “blows up” your cellphone (makes repeated calls to it without permission), you can sue and you can make some righteous dinero in the process. TCPA is a federal law with considerable teeth. Translated: you make money, my firm makes money, debt collector or creditor pays out money.
WHAT TO DO: proof in these cases, like any other case, is obviously critical. If a creditor or debt collector starts “blowing up” your cellphone, you must obtain and keep records of the calls. Contact your cell company if your bills will show incoming calls (most cellphone bills will show incoming calls); if you cannot do that for any reason, take a camera and take a screen shot of your call log on your cellphone to show the call. If you need to get a newspaper of that day or whatever to show the date, then so be it, but take picture and preserve the evidence.
The statutory penalty for violations can be $1,000 per call, so yes, we can take these cases on a contingency.
And your cellphone will once again be quiet…well, at least it will be free of debt collectors and creditors.
Call us if you have any questions on this. Thanks for reading.
Bob Brennan

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What if a Creditor or Debt Collector Offers to Change Your Credit Reporting from Delinquent to “Paid in Full” or “Settled in Full” in Exchange for Payment? PLEASE DON’T FALL FOR THIS TRICK!!!!!

Negotiating with a creditor or debt collector? What do you do if creditor/collector offers to change your credit reporting from “delinquent” to “paid in full” or “settled in full”? Just FYI, both are highly derogatory credit marks and will damage your credit score just as much as a delinquent payment. Better solution: negotiate for a complete deletion of the tradeline, i.e. negotiate for deletion of any reference to the account whatsoever on your credit reports. This comment from Chi Chi Wu, credit expert and goddess with the National Consumer Law Center in Boston: “Key is to negotiate the deletion if the entire trade. This is called “pay for deletion” -ie my client will pay if you remove the entire tradeline. You may get resistance or a rejection of this proposal from the furnisher. They may even claim it’s illegal (it’s not in my opinion). The willingness to do this will probably depend on whether the furnisher is a debt collector or the original creditor.”

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ARE YOU OUT OF LUCK IF YOU DON’T NOTIFY YOUR BANK ABOUT A DEBIT-CARD IDENTITY THEFT WITHIN 48 HOURS? POSITIVELY NOT! YOU ARE PROTECTED BY THE CALIFORNIA IDENTITY THEFT LAW.

Happy 2014, Readers!

I get frequent inquiries from victims of debit card identity theft. With the recent situation at Target Stores, which indeed involved a lot of debit cards, this topic is ripe for some candid discussion.

A lot of credit experts, quite a few of them I respect, have been advising consumers to monitor their debit cards closely and to report any sign of identity theft right away. This is correct advice, whether you are dealing with debit cards or credit cards.

However, my agreement with this advice stops at that point, because quite a few of these same experts believe that you lose your rights if you don’t report an ID theft on your debit card to your bank within 48 or 72 hours. At least in California, this is not true.

California consumers are protected by the California Identity Theft Law, wherein consumers must first obtain a police report or a DMV identity theft report and provide it to their bank, along with very complete detail of which charges to their checking/savings account are identity theft charges. Under the California Identity Theft Law, consumers have FOUR YEARS to do this, technically. While I would never counsel anyone to wait four years, this is certainly less restrictive than the 48 hours or the 72 hours that the banks give you.

If the bank does not re-credit your account after presenting the Police report or DMV report, along with a complete listing of the identity theft charges, then yes, you have rights under the California Identity Theft law, which include all of your damages, the potential of a civil penalty of up to $30,000 and your attorney’s fees paid by the bank.

So, if your bank does not re-credit you for an ID theft on your debit card, and you take the steps I have outlined in this short article, please contact us and we can help. Remember always to keep copies of any documents you provide to the bank, and if you use the mails, always use certified mail.

I hope this helps you get off to a great start for 2014!

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CHECK YOUR CREDIT REPORTS FOR MIS-REPORTING STATUS OF PAID JUDGMENTS!

CHECK YOUR CREDIT REPORTS FOR MIS-REPORTING OF PAID JUDGMENTS! Credit bureau TransUnion today agreed to settle a class action in Virginia for $1.4mm, where the main allegation was that TU had failed to accurately report paid judgments as paid. If you have an paid judgment being listed as “unpaid” on your credit report, this will hurt your credit score. Check this with all bureaus. And yes, we handle these cases.

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You Cannot Get a Credit Report In Your Native Language? Yes, We are Looking Into These Cases!

ByRobert F. Brennan.

Happy December one and all, and I hope all of you have a great holiday season.

Currently credit reports from the major bureaus are available only in English. The reports are hard enough to interpret even for English speakers, so not providing them in at least some of the other major languages spoken in the U.S.–Spanish, Mandarin, Japanese, Korean, Russian–seems, shall we say, a bit unfair.

I am well aware that a lot of my friends hold the belief that English is spoken in this country, so you’d better learn English. I’m really not getting into that debate at this point. My response to this sentiment is that NO ONE CHOOSES TO HAVE A CREDIT REPORT. Whether rich or poor, English-speaking or not, black, yellow, brown or white, NO ONE CHOOSES TO HAVE THE CREDIT BUREAUS COMPILE CREDIT REPORTS ON THEM. So, given that we get no choice whatsoever in whether we even have a credit report, shouldn’t the bureaus provide credit reports in more than just English for the many consumers for whom English is not their first, nor their best, language? Seems fair to me, as a person needs to be able to understand his or her credit report to fix any errors in it.

So, if you or your friends are having troubles with the bureaus because you cannot get a credit report in your native language, yes, we are looking into these cases.

And I am more than aware of the irony of writing this blog post in English. Perhaps some good people out there will help translate.

Thanks for reading.

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California Lemon Law and Your Cellphone: Why You Need to Take Pictures Whenever You Have a Mechanical Failure

Welcome to December. I hope you have had a good 2013 and I hope 2014 will be even better!

These days, cars are virtual computers on wheels. Like all computers, car computers crash. Some or all of the car’s functions cease. Usually this can be only briefly or it may affect a system which is not all that important. However, sometimes computer crashes can cause serious safety hazards–cars stalling at traffic speeds, brake or transmission failures, etc.

IT IS VERY IMPORTANT for you to IMMEDIATELY take out your cellphone and take a picture of the dash lights if this ever happens to you. We are reviewing a series of cases presently where this happened to the vehicle owners, but they have no evidence, other than their own testimony, of what happened. When they took the vehicles into the dealers for repairs, the dealers reported that they were unable to find any problems and that the computers had not stored any computer codes indicating any faults or defects.

More and more, it is SO IMPORTANT for you to take a picture of the vehicle while it is having its malfunction. If you cannot show the vehicle having the malfunction, at least take a picture of the dashlights, so there is documentation of what occurred on the dashboard.

Your California lemon law case may well depend on it. These days, almost all of the problems with cars are computer-related, and thus intermittent. It is critical for you to document the problem as best you can, to preserve your rights under the California lemon law.

I hope this short blog post helps you! Thanks for reading.

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