“It Pays to Check Your Credit Report” Says FTC’s Bureau of Consumer Protection

You should really check your credit reports at least once a year. If you’re still not convinced, you should review the results of the Federal Trade Commission’s (FTC) latest study, which shows just how error-prone and inaccurate the credit report files from Experian, Equifax, and TransUnion can be.

The FTC looked at credit reports for 1,001 U.S. consumers and found that one-in-four (26%) people identified at least one material error among their credit reports from the three bureaus. These errors were not minor, but “material” in that the FTC says these alleged errors are in regard to information used to generate credit scores, including the number of collections accounts, the number of inquiries on a credit file, the number late or missed payments, among others. In other words, errors that will only cost you more money for the use of credit.

The FTC report is the first major study that looks at all the primary groups that participate in the credit reporting and scoring process: consumers; lenders/data furnishers (which include creditors, lenders, debt collection agencies, and the court system); the Fair Isaac Corporation, which develops FICO credit scores; and the national credit reporting agencies (CRAs).

Overall, the study found that around 5% of consumers saw corrections to their credit reports that resulted in a credit score swing of at least 25 points, putting them into a better credit risk tier and making them more attractive to lenders.

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Do a Total Background Check on Yourself – Annual Consumer Reporting Agencies

The Federal laws FCRA and FACTA, which govern the credit bureaus Experian, Equifax, and TransUnion, also regulate a whole universe of other corporations known as “nationwide specialty consumer reporting agencies” and include hundreds of companies, such as: the Medical Information Bureau Inc. (MIB), OPTUMInsight (formerly Ingenix Inc.), Milliman Inc., LexisNexis C.L.U.E. Insurance Reports, the Insurance Services Office (ISO – A Plus Property Reports), ChexSystems Inc. (FIS), CoreLogic, Inc., CBC Innovis, Early Warning Services, TeleCheck, and Equifax Workforce Solutions – The Work Number (TALX).

In fact, just as financial companies rely on “credit reports” to establish credit for customers, others companies also utilize credit report files to assess consumers and charge higher prices in the markets of personal insurance (life, health, disability, and long-term care), residential housing and rentals, employment and income history, banking and checking account history, and property insurance (home, rental, other property, automobile, motorcycle, boating). There are an estimated 400 nationwide specialty consumer reporting agencies collecting and selling personal data on 350 million Americans.

For example, health and life insurance corporations rely on some of these nationwide consumer specialty reporting agencies to provide powerful technologies for evaluating and pricing individual insurance applicants: personal “medical report” files.  The Washington Post says that “medical reports” are “like credit reports for your health records” and have been created on more than 200 million Americans.

The Top 25 Most Requested Annual Credit Reports

Here is a comprehensive list of websites, telephone numbers, and mailing addresses for the top 25 most frequently requested annual consumer reports available to you from the nationwide consumer reporting agencies under the Fair Credit Reporting Act (FCRA). Through these reports, these consumer reporting agencies extensively monitor your personal medical, insurance, employment, rental, and banking history.

Federal law entitles all consumers to check and verify each report, once every year because these reports significantly impact your options and costs of credit. Use the information below to do a total background check on your credit reporting agency files. As The Consumerist advises, “Be sure to check them out and correct any errors, before a crisis hits.”
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New Laws Affecting Credit Cards, Credit Reports, and Gift Cards

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 (also known as the Credit CARD Act) established sweeping changes intended to help limit deceptive marketing of practices, excessive credit card fees, and hefty interest rate increases.  Starting in 2010, certain corporations will be required to make more disclosures and they face new limits on certain credit card practices.

Every person is entitled to a free credit report every 12 months from each of the four nationwide financial consumer reporting agencies Equifax, Experian, Innovis, and TransUnion.  By Feb. 22, 2010, the Federal Trade Commission must formalize the rules governing this access to prevent deceptive marketing of the credit reports.

The FTC has one proposal that would prohibit the credit bureaus from offering any product or service until after consumers get their free reports.  The law currently permits the credit reporting agencies to advertise their proprietary products and services through the centralized source, in this case AnnualCreditReport.com.

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FTC Decision and Order against Milliman, Inc. (2008) (Fair Credit Reporting Act)

On February 6, 2008, the Federal Trade Commission filed a decision and order of their complaint against Milliman, Inc. (In the Matter of MILLIMAN, INC., A CORPORATION. DOCKET NO. C-4213).

CONSUMERS should be aware that one of Milliman, Inc.’s information exchange products, IntelliScript, is:

“a data aggregation service that provides individual medical profiles, including, but not limited to, prescription drug purchase histories of insurance applicants, to health and life insurance companies. The medical profile generated by IntelliScript includes, but is not limited to: all prescription drugs, including dosage and number of refills filled by the insurance applicant for the previous five years. It also includes, for each drug, the name and address of the dispensing pharmacy, as well as the name and address of the prescribing doctor, including medical specialty. The medical profile generated by IntelliScript analyzes the individual’s prescription drug history and provides a “map” of the risk levels associated with each drug, based on information provided by the insurer.” (Source, FTC complaint)

Furthermore, the Federal Trade Commission avers that Milliman, Inc.’s, in providing medical profiles generated by IntelliScript to insurers, is:

“Now and has been a consumer reporting agency, as that term is defined in Section 603(f) of the Fair Credit Reporting Act, 15 U.S.C. §1681a(f), because it regularly engages in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties for monetary fees, dues, or on a cooperative nonprofit basis. Milliman, Inc. furnishes these consumer reports to third parties through the means or facilities of interstate commerce.”

The public FTC decision and order is reprinted below, in full:

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FTC – Summary of Your Rights Under the Fair Credit Reporting Act (FCRA)

This is a “Summary of Your Rights Under the Fair Credit Reporting Act” prepared by the Federal Trade Commission (http://www.annualcreditreport.gov). Know your rights as a consumer!

The Federal Fair Credit Reporting Act (FCRA) promotes the accuracy, fairness, and privacy of information in the files of consumer reporting agencies. There are many types of consumer reporting agencies, including credit bureaus and specialty agencies (such as agencies that sell information about check writing histories, medical records, and rental history records). Here is a summary of your major rights under the Fair Credit Reporting Act (FCRA). (more…)

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