Credit Reference Agencies - an Industry Out of Control?

GingerBob_3

I've just been reading this in the Telegraph:

http://www.telegraph.co.uk/finance/personalfinance/borrowing/10787200/Changing-my-name-was-only-way-to-escape-debt-hell.html

If we are to take this report at face value - and I've no reason to suspect we shouldn't - it seems the CRAs and their debt collector bedfellows have an almost unfettered ability to wreck people's lives, financially speaking. When they do so, the victim has little or no redress, save from time consuming, expensive litigation in the worst cases, with no guarantee of adequate compensation.

This board is littered with CRA-induced problems, causing untold anguish and hurt. When the hapless punters do finally get redress, they tend to heave a sigh of relief and count themselves lucky. Compensation is rarely forthcoming.

Is it not time these people were called to account? Do they not need strong and effective regulation, involving punitive and expensive (to them) sanctions when they get it wrong?

In the light of these suggestions I have a couple of questions:

When debt collectors search the CRA files to track down putative defaulters what, if any, checks do the CRAs carry out to determine if the search is correct and valid?

On this board we have conflicting claims as to what all those myriad of organisations who have access to CRA files actually get to see. Some posters say, for instance, that searches carried out by insurance companies when you merely obtain a quote (!!) are not visible to anyone, others say they are, but lenders ignore them.

So, we all know what these files look like when we obtain a copy for ourselves, but here's the challenge: someone post a copy of what a typical lender gets to see, what an insurance company (quote only, no relationship) gets to see, and what debt collectors get to see .....

bsms1147

Sounds like you don't like CRAs.

Becka38940

GingerBob wrote: »

This board is littered with CRA-induced problems.

Should this not say consumer induced problems?

From what I have read, the main issue is people not understanding the implications of defaulting on an agreement, and not understanding what happens if you don't pay what is rightfully owed.

Mistakes happen - however i don't think the people satisfied with the CRA's are going to take the time to start forum threads about it.

matttye

Becka38940 wrote: »

Should this not say consumer induced problems?

From what I have read, the main issue is people not understanding the implications of defaulting on an agreement, and not understanding what happens if you don't pay what is rightfully owed.

Mistakes happen - however i don't think the people satisfied with the CRA's are going to take the time to start forum threads about it.

There are a lot of problems with the CRAs as well though, it's not just lack of consumer education.

E.g. some wilfully ignore the ICO guidance and report continuous late payments / arrangements for years rather than defaults, harming the debtor's credit file for longer. Some (mainly Barclaycard) have even managed to sway the ICO and OFT when they've been complained about, by saying that arrangements are reviewed every 6 months and it's therefore fine to report them for years. This is blatantly a loophole in the guidance.

Some are successful in their complaints but others aren't. There needs to be some consistency.

Another problem is that when you go to the CRA to report inaccuracies, they go to the lender, ask if it's valid, and if the lender says it's valid then the CRA does nothing more. Dont you think that's perverse? The lender is obviously going to say it's valid because they're the ones who are reporting the data. To say it's invalid would be to admit that they are knowingly reporting invalid data.

You often hear about people with the same name having other people's data appear on their files.

The CRAs are not completely innocent in the clusterf*ck that is credit reporting.

rizla_king

Yes there are numerous threads where the error is on the CRA side. They often match the wrong persons data against the wrong file, ignoring obvious signs such as date of birth and full name not being quite the same.

They are meant to do adequate quality checks before allowing information on your report, but these obviously fall way short.

Out of control is a strong phrase, but they do need to do much more to get their house in order to ensure innocent consumers do not end up victims of their !!!! ups.

BillJones

Most cases posted on here seem to involve people being upset that the CRA is correctly detailing their details. Yes, mistakes should be swiftly dealt with, but people need to remember, those on here are not the customers of the CRAs, it is the financial firms with whom you want to do business with who pay the CRAs. If they are happy with the service, then that's really all that matters.

Instead of moaning when easy credit is not available, a lot of poeople on here would be far better off learning to live within their means, unfashionable though such a view is nowadays.

GingerBob_3

BillJones wrote: »

Most cases posted on here seem to involve people being upset that the CRA is correctly detailing their details. Yes, mistakes should be swiftly dealt with, but people need to remember, those on here are not the customers of the CRAs, it is the financial firms with whom you want to do business with who pay the CRAs. If they are happy with the service, then that's really all that matters.

That is true to a certain extent, but I'm not sure about "most". A lot of the complaints abouts CRAs and their clients do seem justified, and I would say there is definitely a problem which is causing some people hardship through no fault of their own.

BillJones wrote: »

Instead of moaning when easy credit is not available, a lot of poeople on here would be far better off learning to live within their means, unfashionable though such a view is nowadays.

Perhaps, but that's drifting off from my original points.

I think part of the problem with the CRAs is their contantly expanding scope of operations. More and more organisations are now posting more and more data to their files (note, THEIR files, not YOUR files), and consequently the likelyhood of error is increasing.

Maybe someone in the know - working for the CRAs perhaps - could answer my orginial queries:

When debt collectors search the CRA files to track down putative defaulters what, if any, checks do the CRAs carry out to determine if the search is correct and valid?

On this board we have conflicting claims as to what all those myriad of organisations who have access to CRA files actually get to see. Some posters say, for instance, that searches carried out by insurance companies when you merely obtain a quote (!!) are not visible to anyone, others say they are, but lenders ignore them.

So, we all know what these files look like when we obtain a copy for ourselves, but here's the challenge: someone post a copy of what a typical lender gets to see, what an insurance company (quote only, no relationship) gets to see, and what debt collectors get to see .....

matttye

BillJones wrote: »

Most cases posted on here seem to involve people being upset that the CRA is correctly detailing their details. Yes, mistakes should be swiftly dealt with, but people need to remember, those on here are not the customers of the CRAs, it is the financial firms with whom you want to do business with who pay the CRAs. If they are happy with the service, then that's really all that matters.

Instead of moaning when easy credit is not available, a lot of poeople on here would be far better off learning to live within their means, unfashionable though such a view is nowadays.

Yes, mistakes should be swiftly dealt with... but they're not! Even when lenders accept a mistake they often don't use the urgent update system that they have available, instead telling the 'victim' (for lack of a better word) that they will have to wait 28 days for their credit file to be updated.

I had incorrect information on my credit file - 18 months of late payments - and it was relatively pain free to get that resolved. I also got a £50 cheque for my trouble, that I didn't have to ask for. It did however take them 28 days to update my files. If I had been about to apply for a mortgage that would have been completely unacceptable.

Errors should be updated immediately if they're having a detrimental effect on the consumer.

a4a

As I've often said, CRA's should be made to report in realtime but until someone challenges them, it's not going to happen as there is no incentive (or need) for them to spend the money to do so.

It's also against the lenders interests, because they can utilise wrong and inaccurate information to their benefit by charging higher interest rates.