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John Hancock
123 Maple Street
Oakland, CA 90909

March 4, 2003

Equifax Information Services, LLC
PO Box 740256
Atlanta, GA 30374

Re: ABC collection account error on credit report

SSN: 123-45-6789
DOB: 3/1/1965

Dear Sir or Madam,

The ABC collection account on my credit report is not accurate and does not belong to me. Please remove the ABC collection account from my credit report immediately.

Because of the ABC collection account on my credit report I have been denied credit and I am not able to apply for credit.

Please request written proof of the alleged collection account from the person reporting the collection account in the form of contracts, receipts or any other documentation that will prove the alleged collection account belongs to me.

If you feel the collection account is accurate, please send me a written description of the procedures you used to determine the accuracy and completeness of the collection account as well written proof (receipts, contracts, etc.).

Please act quickly on this matter in accordance with the Fair Credit Reporting Act as my creditworthiness has been severely affected.

Sincerely,
John Hancock

If you are unemployed and having a hard time paying your bills, your mortgage should be the first bill you worry about besides food, heating costs and insurance. You will probably end up with bad credit if you don’t pay your credit card bills, but at least you will still have your home. When you get back on your feet, then you can pay off your credit cards and fix your credit.

Credit card debt is unsecured, meaning that you have not provided collateral to the lender for your credit card loans. That’s why you should never refinance your home or get a second mortgage to pay off your credit cards. Once you do that, you have now secured your credit card debt with your home (put up your home as collateral) and if you do not pay your new second mortgage, you can lose your home. Once again, never refinance or get a second mortgage on your home just to pay off unsecured credit card debt it can cost you your home.

First, attorneys run a business and need to earn a living like everyone else, so they cannot work on every case that is presented to them. The stronger your case the more likely they will be willing to help you. You probably have a strong case if you have blatant credit report errors and good documentation (evidence) to support your claims.

Second, if your case is really strong, and you find and attorney that is experienced in the Fair Credit Reporting Act (FCRA), they may take your case on a contingency basis and you will not have to pay any costs up front. The FCRA provides for attorney costs to be paid by the credit reporting agency if they are sued, and then lose the case.

When searching for an attorney, it is important to speak with several attorneys and ask them if they have previous experience with fixing credit reports under the FCRA. The more experience an attorney or law firm has, the more they will understand the credit reporting laws  and the more likely they may consider working on a contingency basis for you.

My experience with Equifax is that they care more about the revenue from their business customers than they do about the accuracy of millions of consumer reports. It is more profitable (hundreds of millions of dollars) for Equifax to leave derogatory information on consumers’ credit reports than to correct it.

There are probably tens of thousands of Americans trying to fix their credit report on a daily basis, so Equifax has come up with an investigation system that is practically worthless. This is done deliberately. The reason their system is not thorough is because a more thorough system would cost money and take away from their handsome profits.

Equifax doesn’t care about accurate consumer credit reports, they care about profits. Until it becomes more expensive for Equifax to keep incorrect information on consumers’ credit reports, they will continue their anti-consumer practices. One way consumers can help fix the problem is by not backing down and standing up to Equifax. The Fair Credit Reporting Act law helps protect consumers, but you have to know how to use it to your advantage. More on how to stand up to the credit reporting agencies in a future post.

The Consumerist blog writes an article titled “How To Avoid Getting Ripped Off By Cash4Gold“. They explain how another blogger sent some gold to Cash4Gold to see how much he could get and discovered that they are ripping people off. Of course Cash4Gold is not the only company giving consumers a bad deal.

Freecreditreport.com and similar  web sites that offer a free credit report are a big rip off too. They are using the same marketing model as Cash4Gold. Spend a lot on advertising, build brand familiarity, take advantage of the consumer’s lack of knowledge and profit by selling them something that they don’t understand or can already get for free.

I just checked out freecreditreport.com again today. They will give you a free credit report, which you can get for free anyway and sign you up for a seven day trial of their Triple Advantage Credit Monitoring service. If you don’t cancel after the trial period, they will bill you $14.95 per month ($179.40 per year) until you cancel (see screen shot below). Now that’s a rip-off if I ever saw one. You can monitor your own credit report yourself for free.

If they get 1,000 consumers to fall for their advertising, that’s $179,400 per year. I wouldn’t doubt that at least 100,000 American consumers have been sold by their ads. That’s a nice $17.9 million in revenue for Experian every year. No wonder why they advertise all over the place on radio, television, online, in your Yahoo email, and elsewhere. They are virtually ubiquitous.

I wonder if Cash4Gold is making $17.9 millions dollars a year too.

FreeCreditReport.com screenshot of $14.95 monthly charge

They don’t appear to be doing anything illegal. They disclose on their web site the credit monitoring service you will be signed up for if you do not cancel the seven day trial. Their web site sure looks nice, but just because something looks nice and is not illegal does not mean it is right or good for the consumer.

I also wonder if they make it as easy to cancel the trial service as they do to sign up for the service. Let me know if you have had an experience with canceling their Triple Advantage Credit Monitoring service.

There’s no need to sign up for a trial credit monitoring service that will charge your credit card if you do not cancel the service.

Forget freecreditreport.com, here’s how to really get your credit report for free!

A lot of people do not try to obtain their credit report until they are denied for a car loan, a mortgage loan or even worse, a job. Then of course they want their credit report as quickly as possible so they wind up using a service they saw advertised and it costs them a lot of money.

Obtain your report regularly for free and this won’t happen to you. You will save money and hours of frustration.

1. Contact all three major credit reporting agencies by telephone (do not use their websites - see below).

Equifax - 1-800-685-1111
Experian - 1-888-397-3742
TransUnion - 1-800-888-4213

2. Request your free credit report by following the phone prompts. Be patient they will try hard to get you to pay for your credit report.

When you use a website to order your credit report, it is easy and more likely that the credit reporting agency will make you agree to their terms and conditions before they will send you your credit report. Many people will just enter their information and click the button to submit their information and receive their free credit report. What many people don’t realize when they submit their information via the CRA’s website, is that they are also agreeing to be bound by the terms and conditions set out by the credit reporting agency’s lawyers. Terms and conditions which are most likely not in favor of the consumer.

If after reviewing your credit report, you find that it is inaccurate and you have trouble getting a mortgage, job or loan because of the inaccurate information, you will probably have less legal recourse because you agreed to be bound by “their” terms and conditions.

I strongly suggest you never order your credit report from a website. You should only order your credit report via telephone or mail because it is more difficult for Equifax, Experian and Trans Union to bind you to a lengthy “terms and conditions” agreement.

Annualcreditreport.com fowards the consumer to the CRA’s website to complete the order for a free credit report. Equifax’s website asks the user to agree to arbitration before they will send you your credit report. ARBITRATION IS BAD (see www.givemebackmyrights.org). If they have not already, the other CRAs like Experian and Trans Union will soon follow in Equifax’s footsteps and try to get users to agree to arbitration.

It is easiest to call the credit reporting agencies and tell them that you suspect someone may have fraudulently used your social security number. They must give you a free credit report if you suspect fraud.

You can obtain your credit report for free as provided by federal law and review your credit report periodically to make sure your credit rating is protected.

Rampant identity theft is happening every day. Identity theft topped the list of top 10 consumer complaints to the FTC for 2000, 2001 and 2002. Under section 612 of the Fair Credit Reporting Act, national credit reporting agencies must send you your credit report for free if you feel you may have been a victim of fraud.

Warning: The credit reporting agencies make it very easy for you to pay for your report, but more difficult to get it for free. It is easiest to call their 800 number. They will still try to get you to pay for your report. Just stay on the line until they are finished with their sales tactics.

3. That’s it. Now just wait for your credit reports to arrive in the mail. You should receive your credit reports within a week or so.

You Don’t Have To Pay For Your Credit Report

Many people mistakenly believe that they have to pay for their credit reports.

I often hear radio commercials offering consumers free credit reports on sites like freecreditreport.com, but there’s usually a catch. Many of the companies offering free credit reports require consumers to sign up for some type of credit monitoring service on a free trial basis. Although it is free, there are strings attached. You have to give a credit card number and your name and address in order to sign up for the trial service, and then you can get your free credit report. If you do not cancel the free trial by a certain date, your credit card will be charged a fee for the credit monitoring service. One company I know of charges $79 annually.

You do not have to pay $79 a year to monitor your credit reports. All you have to do is order your credit reports for free yourself.

Update March 26, 2006 - I don’t understand why people still go to freecreditreport.com to get a “free” copy of their credit report. Freecreditreport.com seems to be adverstising everywhere.

Every day on the drive time radio shows like Sean Hanity, Howard Stern, and Rush Limbaugh, I still hear advertisements for freecreditreport.com. I also noticed a link to freecreditreport.com on my yahoo email side bar.

I know there are a lot of people using freecreditreport.com and giving them their money because if they were not, freecreditreport.com would not continue to spend so much money on radio and internet advertising. Stop wasting your money and REALLY get your credit report for free by following the suggestions on this web page.

Are bill collectors hounding you?

Did you know you can stop bill collectors from contacting you just by sending them a short letter or fax requesting them to stop contacting you. Bill collectors are governed by the Fair Debt Collection Practices Act. If a third party bill collector contacts you after you have asked them not to contact you any more, they have violated the Fair Debt Collection Practices Act and may be liable for damages to you of $1000 per violation plus attorneys fees.

Last updated February 8, 2009