How to Dispute Items on a Credit Report
October 25, 2008
Many consumers have inaccurate entries or items on their credit reports. But, it can sometimes be difficult to determine who is responsible for the error.
Companies you have accounts with often report your payment history to the credit bureaus. When they report this information, they are called “subscribers.”
The credit bureaus gather information from all of your creditors and put together your credit report. Bureaus then sell your credit report to creditors who order it. Consumers can also order copies of their own credit reports.
Sometimes subscribers report inaccurate information to the bureaus. But, sometimes credit bureaus make errors when they gather, store, and / or re-report the information.
Consequently, it is very important to dispute inaccurate items on your credit report with BOTH THE CREDITOR AND THE CREDIT BUREAUS.
There is another reason for doing so: many consumer protections are triggered by routing your dispute through the bureaus.
Once a consumer has alerted the bureaus to investigate an inaccurate item, the creditor and the credit bureaus are held to a standard of using “reasonable procedures” in investigating and correcting any disputed information.
This standard can become important if a consumer later needs to take legal action to force and uncooperative party to correct an inaccurate item.
When disputing an item on your credit report, first write a letter to the creditor describing your dispute.
Then, write a letter to each bureau explaining your dispute. THIS STEP IS CRITICAL.
Once the bureau receives your dispute, it is supposed to contact the creditor to (1) notify the creditor of your dispute and (2) attempt to verify the dispute information.
If you have previously notified the creditor of your dispute, the creditor in theory should investigate the dispute before verifying any information to the bureaus. Unfortunately, this rarely happens in practice.
But, documenting a creditor’s failure to investigate before verifying an inaccurate item to the bureaus can be very important if the consumer needs to take further legal action to get the inaccurate item corrected.
For sample dispute letters, click here.
Garnishments of Bank Accounts in Maryland
October 23, 2008
If a judgment creditor seeks to garnish your bank account, it is very important to respond to the garnishment notice.
IN MOST CASES, YOU HAVE 30 DAYS OR LESS TO RESPOND TO A GARNISHMENT.
If you ignore the garnishment notice, the contents of your bank account will probably be turned over to the judgment creditor.
Remember: in most cases, creditors need to get a final judgment against you before they can garnish your bank account.
If the creditor sued you in Maryland District Court and got a judgment against you, you can respond to the garnishment by filing the attached form with the court:
Certain funds are exempt from garnishment. A few examples include:
- unemployment income,
- some social security disability income payments,
- some workman’s compensation payments, and
- some joint account funds if the account is held by spouses as tenants by the entirety and the judgment is against only one spouse.
The above is not an exhaustive list of exempt funds. You will need to consult an attorney to determine if your bank account funds are exempt from garnishment based on the source of the funds.
You may also be eligible to declare an exemption of up to $6000.00. To determine if you are eligible for this exemption, contact an attorney.
Check 21 and Substitute Checks: Consumer Rights and Responsibilities
October 13, 2008
A federal law called Check 21 went into effect on October 28, 2004. This law was designed to make it easier for banks to process check transactions. It made this process faster and easier by allowing banks to process checking transactions using copies of checks.
This process involves the use of “substitute checks.” Substitute checks are paper copies of the front and back of the original check.
Some banks will send their customers copies of these substituted checks along with their monthly checking account statements. If a consumer finds a problem or error with a substituted check, the Check 21 law provides a special procedure that permits the consumer to ask for a refund called an “expedited recredit.”
If you find a problem with a substitute check, you should contact your bank no later than 40 days from the date of your monthly statement or from the date your bank gave you a copy of the substitute check. Tell your bank you are requesting an “expedited recredit.”
But, you may have other protections from fraudulent checking transactions even if more than 40 days have elapsed. Contact an attorney for additional information.
Unauthorized Checking Account Transactions: Consumer Rights and Responsibilities
October 13, 2008
Our office often hears reports of fraudulent activity on consumers’ checking accounts.
Once someone has your bank routing number and account number, he or she can make fraudulent transactions. So, consumers should guard this information carefully.
Customers should also review their checking account statements carefully each month for unauthorized transactions.
Consumers must report unauthorized checking account transactions to their bank within 60 days of the transaction to receive the all of the protections available under various banking laws.
Under some circumstances, a consumer may not be able to dispute an unauthorized checking account transaction after the 60 day period has passed.
Consumers should also be aware of the dispute procedures that apply to substitute checks. Please see the post titled “Check 21 and Substitute Checks” for more information.
Foreclosure Help: HUD’s “Hope for Homeowners” Program
October 3, 2008
On October 1, 2008 a new HUD program called “Hope for Homeowners” went into effect.
It is a new program for borrowers who are at risk of default and foreclosure. The program provides new, 30-year, fixed rate mortgages that are insured by the Federal Housing Administration (FHA).
The program aims to help homeowners refinance their mortgages into more affordable loans with more affordable payments.
This is a voluntary program, so a consumer’s lender must agree to participate. Some lenders are more willing to participate than others.
And, there are costs associated with the program. Some of these costs can be significant.
Homeowners should contact their lenders to find out if they are eligible to participate in the program. But, you may be eligible if:
- The home is your primary residence,
- You have no ownership interest in any other residential property, such as second homes,
- Your existing mortgage was originated on or before January 1, 2008,
- You have made at least six mortgage payments,
- You are not able to pay your existing mortgage without help,
- As of March 2008, your monthly mortgage payment was more than 31 percent of your gross monthly income,
- You have not been convicted of fraud in the past 10 years,
- You have not intentionally defaulted on debts, and
- You did not knowingly or willingly provide false information to obtain your existing mortgage(s).
For a more detailed discussion of the program, see the following link:
HUD Hope for Homeowners Consumer Fact Sheet
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