Credit Reports are being used for blackmail by unethical people. Here’s the scoop:
Credit reports show our bill-payment history … so rightfully, unpaid bills or late payments show up on our reports. The original purpose of credit reporting agencies (like Equifax, Experian and TransUnion) is to help merchants decide when to grant credit. If we have a bad credit history we don’t get loans or we pay out-the-nose for high-risk loans!
Now credit reports are being used for much more than just lending. Insurance companies, employers and others are using them as a measurement of “character”. That’s right, a bad credit report could mean you don’t get that job or you pay higher auto insurance premiums. That is why it is more important than ever to maintain good credit.
ENTER “CREDIT BLACKMAIL”
Unethical creditors, like landlords, auto mechanics, lawyers, landscapers – or just about anyone else – know how important credit reports are and know how to use them to their benefit. Here’s an example of one of the complaints I’ve gotten:
Mike moved out of an apartment and the landlord tried to get him to pay for damages that were there before he moved in. Mike refused to pay. He even had proof of the prior damage. The landlord knew that if he took Mike to court, Mike would win. So instead of taking him to court, he billed Mike for the repairs and reported the unpaid bill on his credit report. As a result, Mike could not rent another place. So even though Mike was right and would’ve won in court, the landlord circumvented the legal system and simply used Mike’s credit report as a blackmail tool. Mike was forced to pay!
Here’s another example from a case I handled years ago: Linda was involved in a car accident with a yellow cab in a parking lot. It was clearly the taxi driver’s fault. Not only did the cab company refuse to pay her damages, they actually billed her for the cab repairs. Linda refused to pay. The result? Yellow Cab sent her a bill for $600, then dinged her credit report for not paying! She was blackmailed! That is, until we got involved. With a lot of negative publicity on my radio show, the taxi company finally removed the negative report.
I THOUGHT WE COULD REMOVE FALSE INFORMATION & ERRORS FROM OUR CREDIT REPORTS?
So let’s say you contest the blackmail item on your credit report. The credit reporting agency is obligated, by law, to “confirm” the negative entry or remove it. But in reality, credit reporting agencies confirm nothing! At best all they do is contact the creditor to ask if it is accurate. If the creditor says “yes”, you’re screwed. The ding stays on your report! The will almost never investigate.
You get the picture in this cab story and in the previous example about the Landlord? In these cases, and dozens of others I’ve heard about, the “bill” is not a “proven debt”. It is an accusation. And most likely if the creditors took these cases to court, the consumers would win and owe nothing! But instead of going to court, they go directly to the consumer reporting agency and become the accuser, the judge, the jury and executioner. You are assumed guilty and you have to pay to make it go away. How wrong is that?
Do you have cases of Credit Blackmail? If so, let me know. I think it is time we push for legislation and penalties for those who wrongly muck up our credit reports for their illicit gain. It’s time to say Muck You!