The Credit Law Group, P. C.

As any Chicagoan can attest to, public transportation in the Windy City can be a dicey proposition from the get go. If you aren’t facing long lines, delays, re-routes and construction, you are simply trying to avoid mysterious seat spills and coughing passengers

Now it appears that transit riders have nefarious identity thieves to deal with as well. As reported by the Chicago Tribune this morning, Chicago Transit Authority employee Miranda Smith was charged with felony identity theft in connection with the misuse of at least five credit card numbers of CTA customers. Smith, who had been working as a customer service rep for the CTA for close to a year, allegedly stole the numbers from customers who used credit cards to buy pre-paid CTA services over the phone. (Roznas, Angela. "CTA Worker Accused of Identity Theft." Chicago Tribune. 10.23.2007).

The alleged crime came to light when a customer contacted the CTA after noticing unauthorized charges on their account. After receiving several such reports from separate individuals, Chicago Police along with the inspector’s office conducted an investigation. Id.

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The Chicago real estate market is one that has undergone its fair share of highs and lows over the last 10 years. Now, as the condo boom continues within the city, and as communities west of the Chicagoland area experience unrpecedented growth, turmoil in the mortgage industry was going to have an inveitible effect on potential home buyers.

The obvious effect of the upheaval in the mortgage industry this summer is on interest rates being quoted to these potential home buyers, however the full force of the credit crunch is now extending to all areas related to credit, and is taking its toll on consumers across the board (Harney, Kenneth. "Tighter Credit Rolls Up Welcome Mats." The Chicago Tribune. 8.19.2007).

Fair Isaac (FICO) credit scores are more crucial than ever now. The traditional borderline between a prime and subprime loan-- a FICO score of 620, has risen, with some mortgage companies quoting a 680 FICO score as the new cutoff. Id.

"I think the days of 620 [FICOs] are about over, investors are just too afraid to take the risk anymore," commented Bob Ambruster, CEO of Ambruster Mortgage Services, Inc. of Lawrenceville, Georgia. Id.

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In a recent case argued before the United States District Court of Appeals for the Central District of California, Plaintiff Maria Pintos argued that Defendant Pacific Creditors Association (PCA) was in violation of the Fair Credit Reporting Act (FCRA) when it obtained her credit report without a sanctioned FCRA purpose. Additionally, Pintos also argued that Experian violated the FCRA by furnishing the report to PCA. (See Pintos v. Pacific Creditors Ass’n, 2007 WL 2743502, CA 9, 9.21.2007).

The case revolved around Pintos’ vehicle, which was towed after its registration had expired. Id. After Pintos failed to retrieve her vehicle, the towing company placed a lien on the car, and eventually sold it to recoup its costs for towing and storage. Id. The sale of the vehicle did not cover the towing fees, and the towing company turned the matter over to a collection agency, PCA. Id.

In December of 2002, PCA sought and obtained Pintos’ credit report in connection with their attempts to collect on the debt. Id. Experian furnished the report to PCA. Pintos then filed this action, alleging that by obtaining and furnishing her credit report, PCA and Experian, were in violation of the FCRA. Id.

In its ruling, the lower district court discussed what constitutes a “permissible purpose” for obtaining a credit report under the FCRA, and stated that the FCRA lists a permissible purpose as being for “review or collection of an account of, the consumer.” Id.

However, in citing to the Fair and Accurate Credit Transactions Act of 2003, which more clearly defined a “credit transaction” under the FCRA, the Court of Appeals further enumerated that the term “credit” as used in the act refers to “the right granted by a creditor to a debtor to defer payment of debt.” Id. Therefore, a consumer who voluntarily seeks credit implicitly consents to the release of their credit report for credit purposes. Id.

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Recent changes to the Fair Isaac Credit Scoring Model will greatly impact millions of consumers who had previously utilized “authorized user” accounts to build credit history in their own name. (Moser, Bob. Credit Score System Changes. The Daily Advertiser. 9.24.2007).

Previously, the FICO scoring system would take into account a consumer’s “authorized user” accounts, that is, credit accounts of other individuals for which they were authorized to use. When a consumer was listed as an authorized user on the account of an individual with particularly good credit, their own personal credit score would increase as a result. This practice was particularly advantageous for those trying to build credit, such as when a college student would be listed as an authorized user on their parents’ credit accounts, or in families where one spouse was the primary earner. Id.

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Finally, something Republicans and Democrats can agree on. (Of course maybe that's because the issue is a drop-dead no brainer to anyone who's ever been the victim of identity theft).

Legislators, led by Senators Patrick Leahy, D-Vermont, and Arlen Spector, R-Pennsylvania, introduced a bill to Senate last Tuesday that would allow victims of identity theft to seek restitution for time and money spent repairing their credit history. ("Bill Would Let ID Theft Victims Seek Restitution" Reuters. 10.17.2007).

In introducing the bill, the lawmakers commented that, "Last year, 8.4 million Americans were victims of identity theft, and many were left with a bad credit report, which takes months or years to repair." Id.

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In a recent decision out of the United States Court of Appeals for the 9th Circuit, defendant credit bureau Experian was held liable for damages in a case involving the inaccurate reporting of a Civil Claim Judgment on the credit report of consumer Plaintiff, Jason Dennis. (Dennis v. BEH-1, LLC, 2007 WL 2769650, CA 9th District, 9.25.2007).

In 2002, Dennis’ landlord brought an eviction action against Dennis, an action that was eventually settled for $2,938.50. Id. The parties agreed to, and stipulated as a part of the settlement, that no judgment was to be entered against Dennis. Id. After the agreement was reached, the Court’s register of Civil Actions inaccurately reported this agreement as, “11/ 25/2002 Court Trial Concluded-Judgment Entered.” Id. Two months later, however, Dennis had paid the agreed upon sum of money to his landlord, and the court accurately entered the case as a “Dismissal Without Prejudice-Entire Action, Filed & Entered.” Id.

Subsequent to the action, Experian prepared a credit report on Mr. Dennis which stated that a “Civil Claim judgment” had been entered against him in the amount of $1,959. Id. Dennis contacted Experian to inform them that the report was wrong, that he had settled the case and that no judgment had been entered against him. Id.

Experian contracted Hogan Information Services, a public records information vendor, to verify the information listed on Dennis’ report. Id. After obtaining the court’s file containing the settlement agreement reached between Dennis and his Landlord as well as the request for dismissal as entered by the court, Hogan submitted the information to Experian as verification of the information reported, when, in fact, it served to completely contradict the information as reported by Experian. Id. In it’s holding, the Federal Court stated that, “That file contained exactly what Dennis and the court Register said that it contained: the “Request for Dismissal,” which resulted in the dismissal of the entire action. Id. Hogan's investigator seems to have overlooked this document, or failed to understand its legal significance, because he reported back that judgment had been entered against Dennis.” Id.

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