Tom Tupper and his young son, Josiah. Tupper says a mistake on his credit report cost him 48 points on his credit score and that credit bureau TransUnion ignored all the evidence he produced.
A single error on your credit report can really hurt. It might drop your credit score 50 points, costing you an auto loan or pushing you into subprime mortgage status. It could cost a job if you're in the process of applying. It could raise your auto insurance rates. And, says consumer Tom Tupper, it's a direct insult to your integrity as a person.
But worst of all: Sometimes it seems that no amount of hard evidence can persuade a credit bureau to fix such a costly mistake. At least, that's the story Tupper is telling. And he has plenty of evidence to back it up.
Tupper's travails through credit bureau TransUnion's dispute resolution process sound like they sprang from a Joseph Heller novel; and the “Catch-22” he describes offers a glimpse at how bureaus apply justice the 20,000 times per day that consumers plead for help with a mistake on their credit report.
"It is an insult to report something about me inaccurately. It’s not acceptable. … It’s a reflection of my integrity as a person,” Tupper said. ”I do take it personally.”
TransUnion refused to answer questions about Tupper’s situation for this story.
“To protect the privacy of consumers, TransUnion does not comment on individual cases,” said company spokesman Clifton O’Neal.
But Tupper is eager to share his version of events.
Tupper, an avid credit monitoring user, says he spotted an error in his TransUnion report in October indicating that he was 30 days late on a car loan payment in September 2010. He looked up his TransUnion credit score, and found it had plummeted by 48 points. Days later, when the mistake spread to Equifax and Experian, his scores from those firms fell too, but not as sharply.
The 43-year-old Irvine, Calif. software engineer keeps copious records -- he has copies of every monthly statement from his car loan -- and he was sure he'd never been late. But the September 2010 blemish was even more curious because he was being reported late by Santander Consumer USA, a loan-servicing company that had taken over the loan from Citibank that month. He also sold the car a soon after, and had copies of the payoff check from the dealership that was deposited to pay off the loan. Finally, he even made an extra payment to Santander after he traded in the car, just to make sure there was no late payment.
Fast-forward to October of this year, when Tupper looked at his credit report and discovered that Santander was reporting him as a deadbeat. His blood boiled.
He immediately went online and filled out the TransUnion dispute form. He heard back four days later, when his request for a correction was denied and TransUnion affirmed the late payment. Furious, he sent a second dispute form to TransUnion, this time in snail mail, along with a folder piled high with documentation. Tupper shared the file with msnbc.com. Here's a sample of what he included:
*A letter from Citi Financial and Santander making it clear that Santander USA only began servicing the account as of 9/6/2010. That meant Santander couldn't report him as 30 days late in September 2010.
*Santander's first monthly account statement to him, showing his payment was received and credited on Sept. 17, 2010, and that his account was up to date.
*A copy of the loan payoff check, including routing and transit numbers indicating it was cashed.
*Loan payoff notes from both Citibank and Santander.
Tupper heard nothing for weeks, so he called TransUnion on Nov. 15. The response he received was straightforward:
"They said, 'Here's the deal. We've just completed our investigation, and we're not going to change it.'" Tupper said. "And the operator said that since I'd disputed it twice, any other dispute I tried would be seen as frivolous and would be ignored."
When Tupper pressed for a reason, he said the operator was rude, but eventually told him that there was no way for TransUnion agents to verify his documents as authentic. She didn't offer him any way to make the documents believable to the firm
"I kind of went ballistic," he said. "I said, 'If you think about that, how can anyone prove anything to you?' "
Similar complaints have dogged the credit reporting agencies and their dispute process for at least a decade. By law, the agencies are supposed to give consumers a chance to make their case when lenders place blemishes on their credit reports. But in practice, consumer lawyers argue, credit reporting agencies often ignore evidence supplied by consumers and simply ask lenders -- called furnishers, in credit bureau language -- to "verify" the debt. It's the equivalent of asking, "Did you say this?" When furnishers confirm they did, that's often the end of the case.
Depositions taken from former employees in cases filed against the credit bureaus paint a frantic picture of dispute resolution, which often occurs in off-shore call centers. According to SmartMoney magazine, one TransUnion official said that workers were expected to complete up to 22 cases an hour. An Equifax worker estimated she was allotted four minutes per dispute. There isn’t time for much more than a simple yes or no question to the lender.
"It is really quite appalling when you really think about it," Tupper said. “When I gave that proof to TU and demanded they remove the incorrect entry, they basically ignored me and sided with the data furnisher... So here is the rub: What's to stop anyone from reporting anything derogatory about you to a (credit bureau)?"
The credit bureaus, as a group, often argue that their system is overwhelmed with fraudulent disputes by shady credit repair agencies and consumers trying to game the system. And they argue that many errors are corrected. A 2005 report by Congress' General Accountability Office found that 69 percent of surveyed consumers who had disputed items on their credit report said they'd been removed. That report also cited testimony from the Consumer Data Industry Association indicating these results for consumer disputes: data had been deleted in 27 percent of the disputed cases, but verified and left on the person’s report in 46 percent of the cases.
Mountains of consumer complaints found online suggest Tupper's case is not unusual, however.
"If I come at you with evidence, it seems to me that as an organization you ought to err on the side of caution, rather than side with the lender,” Tupper said. “... In simple terms, TransUnion has effectively taken the stance that there is no level of documentation that a consumer can maintain which they will accept as legitimate proof that they have wronged the consumer. If a consumer's banking records, along with the very account statements provided to the consumer by a lender, other banking transit documents, and payoff documents are not considered as adequately evidentiary by TransUnion in an accuracy dispute, then what hope does any consumer have of ever protecting themselves from victimization?"
Tupper's story, however, has a happy ending. He exercised a relatively new consumer right granted by Congress in 2005, but not implemented until last year that lets consumers dispute credit report blemishes directly with the furnisher after a failed dispute with a credit bureau. Tupper sent his powerful packet of evidence to Santander via e-mail in late November, and followed up with a flurry of phone calls. Santander quickly changed the way it was reporting Tupper's account to "paid as agreed," and within 48 hours, his credit report was clean again. His credit score returned to normal soon after.
"For me, it was more infuriating than anything else because it was so wrong," Tupper said. "I wonder how many consumers in my position simply give up, and live with seven years of inaccurate credit scoring because they simply haven't got the means to fight back.... These agencies wield tremendous power in the lives of consumers, and unfortunately they are frequently difficult to hold accountable for wronging consumers.”
RED TAPE WRESTLING TIPS
If you feel you have an error on your credit report, it's important to file a dispute right away. There are plenty of guides for doing so online; start with the Federal Trade Commission's instructions.
The ability to dispute a report directly with a furnisher is an important new right for consumers. Here are tips on how to begin that process.
And if all else fails, look for a consumer attorney with experience fighting Fair Credit Reporting Act cases at the National Association of Consumer Advocates website.