RE: Ironic....Bud - Posted by JohnBoy

import · October 14, 1998, 3:57pm

Posted by tyson Hawkins on October 14, 1998 at 15:59:06:

TEST

import · October 14, 1998, 3:57pm

RE: Ironic…Bud - Posted by JohnBoy

Posted by JohnBoy on October 14, 1998 at 15:57:41:

Lets say you have a lien filed against someone or you have a judgement against someone. The claim is that this would give you a legitimate business purpose to run a credit check on that person. What would your purpose be for? Your not offering this person a line of credit, a job, or a place to live. Your trying to collect on a lien or judgement. My understanding is you cannot just run credit checks on people because they owe you money.

If you could legally do this, then whats the difference between you having a lien or judgement against someone or a collection agency having a lien or judgement against someone?

I know a collection agency cannot just run your credit for the purpose of finding them or checking their credit history because of a lien, judgement, or debt they may be trying to collect.

You can however report the lien, judgement, or debt owed to their credit file, but you cannot just take it upon yourself to check peoples credit without their signed authorization.

I have heard of collection agencies that used to do this for the purpose of locating people that had bad debts. These agencies were fined and eventually shut down because of this. Why would you be allowed to do this and a collection agency cannot? I don’t see a difference here.

I had an old collection account from 1980 from an apartment I rented. They claimed I owed money for new drapes that were damaged from a cat and new carpet that was infested with fleas. This was a totally trumped up claim. I never owned a cat. I hate cats! I never had any kind of pet. I’m a dry cleaner by trade and I cleaned the drapes before I left. I offered to have the carpet cleaned before I left and was told by the manager not to worry about it. All the units were getting new carpet as the tenants moved out. I left a forwarding address and never heard or received anything from the management that there were any problems. A few months later I received a collection notice that I owed them $340 for repairs. I naturally disputed this trumped up claim and called the manager of the complex about it. She just hung up on me! I never paid that debt and it remained on my credit for 5 years as a collection account.

When this debt was around 5 years old I disputed it again because I was applying for a mortgage. After the credit bureau sent them my dispute it opened up a whole other can of worms. The collection agency called me to try to collect the debt again. They sent me notices in the mail again. I wanted to know how they got my address and phone number? My number was unlisted. They wouldn’t tell me. Later when I went down and got another copy of my credit report I seen that they had an inquiry showing on my credit report. This was a NO NO! They were NOT allowed to check my credit file just because they claim I owed them a debt.

I complained to the credit bureau about this. (Trans Union). The manager working there picked up the phone and called this collection agency while I was standing there. She asked them if they had my signed authorization to check my credit? They did not. She started screaming at these people that they were in violation of the fair credit reporting act. (I don’t remember the exact words she said, but she told them I could file suit against them, they could be fined and loose there privilege to have access to the credit bureau’s). After she got off the phone she apologized about what happened and removed the inquiry from my credit file. Then she gave me an updated copy after it was removed.

When I got home I called the collection agency and told them that unless I receive a letter stating that this debt will be removed from my credit file with-in 10 days I was going to file suit against them for prying into my personal credit file without my written consent. They sent me the letter and removed the collection account from my credit file. Suddenly after 5 years. I can’t imagine why?

If they had a legitimate business purpose to check my credit, then why would they agree to this? I only know of one reason. Because they KNEW I could sue them and collect a $10k judgement against them if I won. Plus they would have taken a chance of loosing their privilege to report their debts to the credit bureau’s. Why else would they have so easily agreed to remove the debt after 5 years of trying to collect on it? When they first contacted me again after 5 years trying to collect I told them this was not my debt and I would not pay it. I told them I waited 5 years and another 2 years wasn’t going to kill me. They said they would renew the debt and file it again for another 7 years. WRONG! They never took the case to court to get a judgement. Since they failed to do this, the statue of limitations had run out in order for them to legally go to court and collect on the debt. Unless they had a judgement, they cannot renew the debt and file it for another 7 years on my credit report. I tried for the first few years to get them to take me to court over it. I new the debt was a bogus claim and had pictures of the apartment to prove it! Suddenly after 5 years of them trying to collect and making threats they agree so easily to remove the debt from my credit file only with-in a week after threating to renew the debt for another 7 years. Hmmmm.

Unless the law on this has changed recently, it is not legal to just check peoples credit because you claim to have a legitimate business purpose. You must have signed authorization from that person to check their credit file AND have a legitimate business purpose to do so. I know it goes on all the time and most people get away with it. That’s mostly because the person who’s credit file you checked did not dispute the inquiry.

Lets look at this another way. Lets say you check my credit without my signed authorization. Because of you checking my credit file and causing my credit score to drop 11-13 points from the inquiry you put on my credit file, I get stuck with paying a higher interest rate on a new mortgage I was applying for. I could of gotten a 7% 30 year fixed mortgage, but because of my FICO score dropping 11-13 points, I have to pay 9% interest for 30 years. I find out the reason my score dropped because someone without my knowledge checked my credit file. Who do you think is going to end up in court being sued for the difference of that interest rate over 30 years? Win or loose, how much would this cost you in attorney fees to defend yourself? Is it worth it to not protect yourself from a possible lawsuit by not getting a signed authorization from that person before you run their credit?

If your looking at buying a mortgage and a note, you claim you have a legitimate business purpose to check that persons credit. If this was a mortgage or note that was drawn up by a regular institution, you would already have the authorization to check that persons credit. That person would have signed an authorization that automatically allows anyone the mortgage or note is being sold to, to be able to check that persons credit file.

If your looking at buying a mortgage or note that was drawn up by a private party and they did not get that person to sign an authorization to allow it’s and/or assigns to check your credit if and when they decide to sell your mortgage or note, you should require the mortgage or note holder to get that authorization from that person before you check their credit file. Its only good business sense for your own protection.

Below John mentioned about the car dealers that would run credit checks on people when shopping for a car and end up with 6 different inquiries on your credit. This is probably true. BUT, I guarantee you they had that persons signed authorization to do so. How else would they be able to just run your credit unless they have your name, SS#, address, date of birth? You would have had to given them this information before they could run your credit. Normally the car salesman sits down with you and fills out a credit app on you. You supply him with your name, address, phone, SS# and the salesman has you sign the paper. Once you signed that paper, you have authorized them to check your credit. It’s in plain black and white on that app that says you authorize them to check your credit. Now they may not tell you they went in back and pulled your credit, but they did get your authorization to do so.

When push comes to shove, I’d rather be safe then sorry and have a copy of that persons signed authorization in my file then take the chance of that person coming back later and claiming they didn’t authorize me to check their credit. It’s just not worth having to take a chance of being sued and end up in court in front of a Judge explaining how the law on this is a gray area and most people have a mis-concept of the law in this matter. Because win or loose, it’s going to cost me money, time and grief. All of which could have been easily avoided by simply getting a signed authorization.

JohnBoy

import · October 15, 1998, 11:04am

Your situation- the difference - Posted by Bud Branstetter

Posted by Bud Branstetter on October 15, 1998 at 11:04:52:

I am not sure if I would have gone after the landlord to begin with and forced the issue because I was not in you situation.

The difference between the collection agency checking your credit and the circumstances I mentioned is quite significant. They did not have a legal judgement against you, only a claim. No, I can’t check your credit if you own me money. Let me get that judgement against you and I can legally harrass you to the ends of the earth to collect. Even check your credit! A credit report is a good way to find out what bank you do business with so I can seize your funds. I can talk with your other creditors to share information that you put down on your application to them. I can serve you with an order of examination(called other things in other states) so that you have to divulge all you assets and finacial dealings. Lie to me and I will file for a contempt charge. Then we get back to that jail thing.

Want to lease from me. I will require a SSN. By you giving me that information you have given implied permission for my permissible business purpose. Not in writing and you want sue me. No problem. I have subpoenaed phone records before to prove who talked to whom.

But I am a non-confrontational type of guy (usually) and agree with you that you want to try to get written permission even it not legally required. As I said each must make their own judgement of the adviseability of some action. I’m ready to defend.

import · October 14, 1998, 11:09pm

Will search for it - Posted by John Behle

Posted by John Behle on October 14, 1998 at 23:09:22:

As I mentioned, I’ll send you the information I have. I may research it tonight with lawcrawler or findlaw. I realized I used the wrong terminology that helped to stir this up a little.

The term should be “Permissable” business purposes and there is a detailed definition of what is and what isn’t. I believe it came to me from TRW, but like I said I’ll get chapter and verse for you.

As far as judgements, liens, etc. and the case you mentioned, I’d be upset too if I had been you. I’ve had to clear up similar problems for clients. The differences here may be one party pursuing collections (especially when they do not have a valid claim) and another party extending credit.

Someone informed me a couple weeks ago that the FICO score reduction from inquiries is no longer, so I’ll look for that too.

As I mentioned, I almost always try to get a signed authorization. Buying notes at times has involved no contact or meeting with the payor. I know that’s dangerous and I’m not advocating it, but I have done it. Yet, when I am just beginning to look at a note, I may not want to tip off the payor until I have a signed deal. Sometimes the credit check is non-existent or doesn’t happen until near the closing. I buy a note based on the equity, and collateral not someone’s credit.

Like I said, I’ll get you chapter and verse. I only brought it up because it has been such a controversial area. I was on the other side of the fence until I actually read the details. I didn’t believe it at first, but verified it two other ways. I’ll get it to you.

import · October 14, 1998, 9:12pm

Re: RE: Ironic…Bud - Posted by Joe Kaiser

Posted by Joe Kaiser on October 14, 1998 at 21:12:18:

Johnboy,

You’ve repeated this again, and it’s incorrect. The Fair Credit Reporting Act lists a half dozen or so valid reasons for obtaining a credit report where no written authorization is required. Believe me, collection agencies most certainly do have the right to run your credit, and they’re looking for not only your residence, but you employment and your accounts as well.

Joe

import · October 14, 1998, 4:09pm