In the News

• On Your Side: Fair Debt Collection
• A helping hand on credit issues.
• $800,000 Verdict Against the Trans Union Credit Reporting Agency.
• Identity theft rates on the rise. Learn how to protect yourself.

CBS 3

PHILADELPHIA (CBS 3) ― Have you ever been harassed by a collection agency to pay up on a debt? Well, you don't have to tolerate it. 3 On Your Side's Jim Donovan tells us about a local woman who was threatened by one company and she's fighting back.

These days, Seena Rosenberry is cautious about answering her phone.

"Oh it was just awful, how he was torturing me, they called my sister's house, my tenant's house, they called my friend's ex-wife's house and one of my friend's daughters," she said.

A debt collection company didn't have Seena's phone number, so it called people who knew her. And the messages they were leaving said she was in big trouble.

When Seena called them back, she was told she needed to pay an outstanding debt, a debt that wasn't even hers. "It was my sister's debt," Seena said.

But that didn't stop the aggressive collection agent who Seena says was nasty from the beginning of the phone call, to the end. The agent threatened Seena with all kinds of false statements.

"They said they're going to take your house, you're going to have to go to court, they're going to fine you," Seena said.

Frightened, Seena made a credit card payment over the phone, of more than $9,000, but she shouldn't have. Even though Seena was an authorized user on one of her sister's credit cards, the debt was supposed to be discharged when her sister filed for bankruptcy. That meant it no longer had to be paid by anyone.

Seena should not have been harassed either. That's because there's something called the Fair Debt Collection Practices Act. It protects consumers from overly aggressive debt collectors. The problem is, most people don't know it exists.

"It basically prohibits them from engaging in any kind of abusive, unfair or deceptive practice," said Mark Mailman, consumer protection attorney.

Mark is fighting to get back Seena's money and he says other people should fight back too.

"This debt collector contacted her and basically did every no-no under the sun," Mark said.

Under the law, collection agencies are not allowed to threaten to sue if they don't really mean it, tell a third party such as a relative or friend about your debt, call excessively or use obscene or abusive language.

While Seena waits to get her money back, she has some advice.

"Don't believe them and don't fall for it, please don't fall for it, call a lawyer, call somebody, do not give them the money," she said.

If you feel you're being harassed by a collection agency, be sure to document the call. Write down the date, the time and exactly what was said. Plus, you don't have to talk to them, just hang up the phone.

Click here to watch the video on CBS

PHILADELPHIA INQUIRER

By Jeff Gelles
Inquirer Staff Writer

Between Muhlenberg College and Temple University Law School, Jim Francis learned what became a valuable lesson: Things can go badly wrong with America's complex credit-reporting system, and it's not always easy for consumers to solve them.

Francis had dutifully left a forwarding address when he moved to Philadelphia from Allentown, but one of his bills went astray. By the time it caught up with him, his payment was overdue. The late payment became a blot on his good name.

As a budding lawyer, Francis thought he could solve the problem with a well-crafted letter to the credit bureau in question. "Nobody cared," he recalled in a recent interview. "The response was: 'We're going to leave this on your credit report.' "

That was in the 1990s. Today, Francis would expect better, in part because of his path-clearing work as a founding partner of Francis & Mailman P.C., a six-lawyer Center City firm that specializes in consumer litigation.

Francis' firm has sued the three national credit-reporting companies, along with banks, other businesses and debt collectors, to force them to fix problems in clients' credit reports. His firm's Web site, www.creditreportproblems.com, shows visitors how to get their free annual credit reports and deal with errors themselves. (It even includes an interactive tool that creates a dispute letter.) It also seeks clients, who still arrive looking for help with their own consumer nightmares.

Question: How did your personal experience shape your legal practice?

Answer: I heard numerous stories about people who had credit problems that couldn't get them resolved. The brazen indifference to those concerns just kind of reverberated for me throughout law school. When I got into doing plaintiff's work on the personal-injury side, there were cases there where the liability was much tougher for me to see.

In my case, I could document that this wasn't my fault, and I wrote to the bureaus and basically was ignored. And so for seven years I had late payments on my credit report and my credit score was low.

This happened at the time that I began my legal career. I said, 'There's got to be a law.' And I found the Fair Credit Reporting Act. I read it from cover to cover, and I remember at the time there were not many reported decisions. Since then, there have been a lot of decisions, and my firm has been part of a number of them.

Click here to read the full article on the Philadelphia Inquirer.

FOR IMMEDIATE RELEASE

$800,000 Verdict Against the Trans Union Credit Reporting Agency

Yesterday, a federal court jury in the United States District Court for the Eastern District of Pennsylvania returned an $800,000 verdict against the Trans Union credit reporting agency in a fair credit reporting case. The verdict is the largest known of its kind in a Pennsylvania federal court.

Trans Union, LLC is one of the country's "Big Three" credit reporting agencies, and has one of its main operations in Crum Lynne, Pennsylvania . Trans Union reported mixed information belonging to a suspected narcotics trafficker on consumer-plaintiff Sandra Cortez's credit report, and failed to fix the error despite several disputes. The jury awarded $50,000 in emotional distress damages, and $750,000 in punitive damages.

Plaintiff Sandra Cortez was represented by the law firm of Francis & Mailman, P.C. Trans Union was represented by the law firm of Kogan, Trichon & Wertheimer, P.C. Both law firms are located in Philadelphia, PA.

The case of Cortez v. Trans Union, LLC, Civ. No. 05-5684 was presided over by the Honorable John P. Fullam.

Related Coverage:
The Legal Intelligencer
By Shannon P. Duffy
April 30, 2007

A federal jury on Thursday awarded $800,000 to woman who claimed that a credit-reporting agency falsely branded her as a Colombian drug dealer when it confused her with someone on the U.S. Treasury Department's watchlist of known narcotics traffickers.

Plaintiff Sandra Cortez, 62, claimed that the error created humiliating ordeals when she was trying to buy a car and later when she was renting an apartment, but that Trans Union ignored her repeated pleas to have the erroneous information taken off her credit report.

After a three-day trial, the jury in Cortez v. Trans Union found that Trans Union had violated four provisions of the Fair Credit Reporting Act and awarded Sandra Cortez $50,000 in compensatory damages and $750,000 in punitive damages.

The jury also apparently wanted to make sure that its verdict sent a clear message. On the verdict form, below the monetary awards, the jury wrote: "The Trans Union business process needs to be completely revamped with much more focus on customer service and the consumer."

According to court papers, Cortez, who hails from Highlands Ranch, Colo., first learned of the error when she was purchasing a car and was told that her credit report included an "alert" that she was a match for someone listed by the Treasury Department's Office of Foreign Assets Control.

Cortez claimed that a manager at the car dealer threatened to call the FBI to report her, but that she was ultimately able to convince the dealer that she was not the woman on the government list.

Court records show that the OFAC list includes a "Sandra Cortes Quintero," who is believed by the government to be associated with a drug cartel in Cali, Colombia.

Cortez's lawyers - James A. Francis, Mark D. Mailman and John Soumilas of Francis & Mailman - said Trans Union's automated processes put the alert on Cortez's credit report even though the Colombian woman is 27 years her junior and has a different last name.

But the credit report didn't include the year of birth, they said, so anyone who looked at it would assume that Cortez had been properly identified as a "match" for a drug dealer.

The OFAC list, which is publicly available on the Treasury Department's Web site, includes about 3,300 groups and individuals, mostly foreign nationals, who are designated as terrorists or drug traffickers.

Long used by banks and other financial institutions to block financial transactions of drug dealers and other criminals, the list is now seeing wider use due to an executive order signed in the wake of the Sept. 11 terrorist attacks.

According to a report by the Lawyers' Committee for Civil Rights of the San Francisco Bay Area, the list is now used by many businesses to screen applicants for home and car loans and apartments.

The report, issued last month, said "few people in the United States are actually on the list. But because many names on the OFAC list are common Muslim or Latino names - such as 'Mohammed Ali' or 'Carlos Sanchez' - people in this country with similar names are increasingly getting snagged. Even a shared first or middle name, including some of the most common names in the world, can lead to consumer transactions being denied or delayed."

Under the law, anyone who does business with a person or group on the list risks penalties of up to $10 million and 10 to 30 years in prison.

Trans Union recently began offering an "OFAC adviser" feature in its credit reports, a service it touts as offering "the most comprehensive international list of known terrorists and criminals" and ensuring that it minimizes "false positives" through "unique" matching technology.

But Cortez's lawyers say she was just one of the victims of Trans Union's automated process which attaches an alert to a credit report whenever a consumer's name is similar to one on the list.

Francis said the list includes many common names, such as Charles Taylor, the former president of Liberia.

And Trans Union, he said, is not doing enough to ensure that innocent Americans don't have a terrorist or drug trafficker alert attached to their credit reports.

After the initial ordeal in the car dealership, Cortez claimed that she made repeated efforts to have the alert removed from her credit report, but that Trans Union failed to do so - despite assuring her once that it was no longer there.

In its verdict, the jury concluded that Trans Union had violated four provisions of the Fair Credit Reporting Act by not conducting a proper initial investigation; by not making proper disclosures to Cortez when she complained; by failing to note her dispute in subsequent reports; and by failing to have procedures that would ensure "maximum possible accuracy" in its reports.

The jury also found that the first three of those violations were "willful."

For Chicago-based Trans Union, the jury's finding of willfulness meant that it was exposed to possible punitive damages in the second phase of the trial.

In his closing argument, Soumilas told the jury that Cortez didn't suffer any economic harm as a result of Trans Union's error, but instead was seeking only to be compensated for the ordeals and humiliation she suffered.

On the issue of punitive damages, Soumilas didn't suggest any specific figure, but told the jury that Trans Union has a net worth of $939 million.

Trans Union's lawyers - Bruce S. Luckman and Timothy P. Creech of Kogan Trichon & Wertheimer - had argued in court papers that such an erroneous alert wasn't covered by the Fair Credit Reporting Act because it is not financial information.

But at trial, U.S. District Judge John P. Fullam rejected that argument and allowed the claim to go to the jury.

Neither Luckman nor Creech could be reached for comment on Friday.

Theft of Information

Over the course of the last year, “theft of information” has become a buzz phrase familiar to both businesses and consumers alike. The list below is a sampling of some of the companies that have by this growing and invasive form of theft. Click on the link to read the news story concerning identity theft. If you think you may have fallen victim to one of these thefts, order your credit reports today and contact us immediately should you find any incorrect information or account activity that doesn’t belong to you.

ABN Amro Mortgage Group -
Do you have a mortgage with ABN Amro Mortgage Group? 2 million residential mortgage customers were affected by this latest information theft, which involved the disappearance and reappearance of a computer tape while in transit from Chicago, Illinois to Allen, Texas. The tape contained the names, account numbers, payment history and social security number of these borrowers.

Ford Motor Company
Ford is the latest to be hit by a security breach as a computer with names of 70,000 active and former employees and their personal data is stolen from a Ford facility in Detroit Michigan.

Scottrade -
U.S. Securities regulators warn investment firms of potential “phishing” and hacking schemes, www.scottrade.com , 1.4 million customers receive notification of server security breach.

TransUnion security breach is the latest in a series of high profile data compromises.
Click Here to read the story in Computerworld.

Credit scoring – how does a lender use your credit score to determine your “credit worthiness”?
Read the story in MSN news.

Microsoft nails offenders who used Microsoft’s logo for e-mail “Phishing” scam.
Read the story in Yahoo news.

4 out of 5 credit reports found to have errors
Click here to read the CBS article.

February 17, 2005 - BREAKING NEWS! CHOICEPOINT MASS ID THEFT RING DISCOVERED, 140,000 CONSUMERS AFFECTED.
ChoicePoint's databases contain 19 billion public records, including driving records, sex-offender lists and FBI lists of wanted criminals and suspected terrorists.
Click on the link to read the CNN story.

http://money.cnn.com/2005/02/17/technology/personaltech/choicepoint/

Attorney Jim Francis is interviewed by Philadelphia ABC TV affiliate Ch. 6 Action News in this clip. The story involves one woman's battle with the credit bureaus to remove a false judgment that remained on her credit report after numerous disputes and attempts to correct. View Interview - please choose your connection speed MP3 format Windows Media Format Real Player - 56k modem Real Player - 128k ISDN Real Player - 256k DSL/Cable

  Download the RealPlayer Plug-In here

FOR IMMEDIATE RELEASE

$5.3 Million Verdict Against Trans Union A Victory for Consumers Nationwide

Chicago, IL and Philadelphia, PA – August 19, 2002 – Recently, an Oregon jury awarded Judy Thomas $5.3 million dollars for errors found in her credit report. The Oregon woman battled with Chicago based credit reporting giant Trans Union for 6 years to have false information belonging to another woman, removed from her report. Thomas won her lawsuit against Trans Union for violations of the Fair Credit Reporting Act, the federal law which regulates the accuracy of information contained in credit reports and mandates that the credit reporting agencies investigate and correct mistakes within a 30 day period.

Trans Union, Equifax and Experian, or the “big 3” credit reporting agencies report most of the information that is used for consumer lending in this country. Often, a consumer is unaware of exactly what information is being reported about their own credit history, until they are unjustly turned down for a mortgage or installment loan. Only than, after ordering copies of their credit report, do they discover that there is an incorrect piece of information that has been reported which caused the denial.

According to consumer attorneys who handle Fair Credit Reporting Act claims, the system is inherent with flaws. The merging or mixing of credit files from 2 different, unrelated individuals into one report, or “mismerge” as it is know in the industry, is all too common. Jim Francis, of Francis & Mailman, P.C., a Philadelphia law firm that concentrates its practice in credit reporting cases, was not surprised by the verdict. “What is unfortunately known all too well by American consumers is that credit reports are riddled with errors and outdated information that often stands in the way of a job or mortgage. What is not known, is that the major credit reporting agencies are well aware of this problem and simply refuse to do anything about it.”

“What’s worse”, said Francis, “is that when a consumer disputes inaccurate information on her report, the credit reporting agencies almost always side with the companies reporting the information in the first place, rather than with the consumer, because they are the credit bureaus’ customers.” The problem, according to Francis, is financially motivated; “This is another case of the Ford Pinto. While the credit reporting agencies know full well that their cavalier and unlawful practices hurt consumers, they have consciously decided to keep the status quo out of an apparent belief that it is simply cheaper to defend against lawsuits than fix the problem at its core.”

Up until this point, most cases against the big credit reporting agencies have ended in settlements rather than in court. In a similar case against Trans Union in 1998, a jury in Mississippi awarded $4.5 million to Terry Cousin. Trans Union had mixed credit information from Cousin’s brother in with his credit report and did not remove the information, nor did they comply with the time period spelled out in the Fair Credit Act. Last year, the 5th Circuit Court of Appeals in New Orleans rejected the award, claiming Cousin erred on a technicality and did not have enough evidence to prove that Trans Union had violated the FCRA.

Mark Mailman of Francis & Mailman claims, “Juries are now awarding damages that take into account the emotional stress that goes along with a credit denial based on false information, as was the case with the $300,000 damages award in the Thomas verdict. He adds, “Your good credit rating is gone, and as a result of the ongoing battle to restore your rating, your emotional and physical health decline.”

What can a consumer do to ensure the information in their credit report is accurate? Attorney Larry Smith an attorney from Chicago advises, “Order a copy of your credit report from each of the 3 credit reporting agencies and look them over carefully for inaccuracies. It makes good sense to know exactly what the credit bureaus are reporting about you before you apply for that important installment loan, rather than after you have been turned down. He adds, “Should you find mistakes or errors, notify the CRA of your dispute in writing, keep a copy of the dispute letter and follow up within a month. If you have made numerous attempts to have the information investigated and removed and the CRA has not done this, you are entitled to sue the agency under the FCRA.”

According to attorneys Francis, Mailman and Smith, even after a credit bureau has investigated and removed inaccurate information, it may reappear again later. They advise ordering copies of your reports every 6 months to check that the negative item(s) is gone for good and that your credit history is reported accurately and is up to date.

For more information, contact Mark Mailman of Francis & Mailman, PC at 877-735-8600.

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