1

Introduction

This book is for you, the twenty-first century consumer

with more questions than answers about credit and the process

of raising your score. As the country continues to struggle out of

a recession, many Americans like you are dealing with the fallout

of the past few years. Unemployment, soaring interest rates,

exploding bubbles, and a host of other factors have placed the

average American in a tight spot. Faced with a myriad of

problems—foreclosure, defaulting on a loan—many Americans

have had to make tough decisions, some of which may have

adversely impacted their credit rating. Most will be struggling

with this for years to come.

The good news is, you don't have to.

This book will introduce you to the basics of credit—

where your credit rating comes from, how it is calculated, and

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variables that affect your credit rating. It will list in detail some of

the most common reasons your credit score is not optimal and

show you how to fix them. Then it will walk you through the steps

of rebuilding and maintaining good credit.

Did you know that many problems with credit scores are

caused by incorrect or misleading statements?

Did you know that you can fix these problems—for free?

The difference between a good credit score and a bad

credit score can be tens of thousands of dollars over a lifetime. It

can mean the difference between getting a car or walking to

work. It can influence whether you make your home in a house

or a cramped apartment.

We'll show you how to correct errors, demand

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accountability from credit bureaus, and be eligible for the home

and the car you deserve, and the college education your children

will need.

This book is for you.

Sincerely,

Curt Bush

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Table of Contents

1. Credit Basics 5

2. Credit Repair Myths and Mistakes19

3. eOscar 33

4. Cleaning Your Credit File 39

5. Building and Maintaining Good Credit 65

6. Credit Cards 81

7. Debt Collectors 100

8. Lawsuits 111

9. Appendix 117

5

Chapter One

Credit Basics

Just what do those numbers mean, anyway?

You've likely seen the commercials about credit scores

and credit reports—they're on every channel of your television,

combining cheesy jingles with scare tactics. You hear about

rising interest rates, banks clamping down on their loan

departments, and we know credit scores have something to do

with it. You may even know your credit score. But do you really

know what it all means, where it comes from, and how it affects

you?

Relax. We're here to help.

Simply put, a credit score—or FICO score—is a number

that reflects the potential risk a creditor will have in offering you a

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loan. The scoring system runs from 150-930. 350, the lowest

score, represents the highest risk; 850 represents the lowest

risk. FICO scores are calculated using a complex mathematical

formula; we'll go over exactly what goes into that formula later in

this chapter. Each of the three credit bureaus—Experian,

Equifax, and TransUnion—use slightly different formulas and as

a result, your score may vary slightly between bureaus.

The "average" score for many Americans hovers

between 620 and 650. The number itself means very little,

generally speaking; each bank, mortgage company, and

insurance company have their own standards outlining minimum

credit scores in terms of the potential risk they are willing to face.

However, a score above 650 (especially in the mortgage

industry) indicates a good credit history. Consumers with a credit

score above 650 will find it much easier to secure loans at

favorable terms.

An average score (remember, between 620 and 650)

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does not rule out getting favorable terms or securing credit;

rather, it simply indicates to the company that they should

research each consumer to evaluate his or her potential credit

risk before offering a high-value loan or credit limit. Closing a

loan may be fraught with hassles—documentation and written

explanations of why the loan is necessary, for example—and

take more time.

A score below 620 does not mean a consumer can't

secure credit at all! However, the process is going to be a lot

longer and the terms of the loan may not be as good as those

offered to consumers with a higher FICO score. Lenders will

often balance out the risk of the loan offered to these consumers

by raising their interest rates. Additionally, since more insurance

companies—and even employers—are examining your credit

scores, it will have an affect on your entire life.

Credit scores, as we mentioned, are calculated using a

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complex mathematical formula. Each bureau uses a different

formula, but many of the variables remain the same. We'll

examine several of these variables in no particular order:

− Average balance of revolving accounts is too

high.

Revolving accounts, such as credit cards or department store

balances, change continuously as monthly installments are paid

and more items are purchased. (This is in comparison to an

installment loan, such as a car payment.) If the average balance

of all these accounts are too high, this may have a negative

impact on your credit score.

− Too many late payments.

Missing a credit card payment or a loan payment can have

devastating impact on your credit score. One deliquency will not

send your credit rating crashing—a "good" credit score can still

have up to two late credit card payments or one missed car

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payment, for example—but a string of missed or late payments

will hurt your score significantly.

− Excessive inquiry.

Each time you apply for credit of any kind—a credit card, a

department store account, mortgage, car payment, etc—the

lender will ask you to sign a form allowing them access to your

credit score. This access—called an inquiry—is filed in your

credit score. Sporadic inquiries are normal and will not harm

your rating. A string of inquiries clumped together, however,

could have a negative impact on your score.

− Too many recently opened accounts.

Also listed in your credit score is a history of your accounts—

each loan, bank account, savings account, and any other

financial account, along with a date it was opened. Again, as

with inquiries some accounts being opened are to be expected—

but too many in a short time could affect your score.

− Too many recently closed accounts.

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Having credit open for a long time helps your score. If you have

open accounts, don't close them! If you close your open

accounts after you pay them off, it could hurt your score—I did

this and it hurt my score by twenty points. Keep your accounts

open—just don't use them if you don't want to.

Other factors include account balances, experience with

credit (how long you have been working with credit), means of

paying off your credit, and your debt-to-asset ratio. This

information is constantly collected and compiled by each credit

bureau, meaning your score is a dynamic organism that evolves

with each debt payment or credit inquiry.

This is great news!

Since your credit score is dynamic, rather than static,

each decision you make regarding credit will be reflected on

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your reports and in your final score. Good decisions will

influence your credit score daily, slowly nudging it towards the

number you want. We'll cover how to help your credit score grow

in future chapters. For now, let's examine the Fair Credit

Reporting Act and what it means for your credit score—and how

it ensures your credit score benefits you, not the lenders and

credit bureaus.

The Fair Credit Reporting Act

Congress passed the Fair Credit Reporting Act in 1970

as a complement to the Consumer Credit Protection Act, signed

into law two years prior. This act, in conjunction with the Fair

Debt Collection Practices Act, is the steel backbone to the rights

you possess as a consumer.

Prior to the passage of the Fair Credit Reporting Act,

consumers were at the mercy of the credit bureaus; false,

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outdated, or misleading information could be inserted into credit

reports without the consumer's knowledge. Anyone who

managed to catch these reporting errors had no legal standing to

challenge the bureaus and have them corrected. The Fair Credit

Reporting Act was written in direct response to consumers'

concerns—now the consumer (that's you) has the right to

examine their credit report and demand the removal or update of

any false, misleading, or outdated information. The responsibility

then falls on you, the consumer, to ensure that your credit report

is accurate.

You can find a full copy of the Federal Fair Credit

Reporting Act at the back of this booklet; for now, we'll briefly

summarize the contents of the Act in eight simple points.

1. You have the right to know the nature and

source of all entries on your credit report.

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2. You have the right to obtain your credit report at

a reasonable fee. You also have the right to

receive a free copy of your credit report thirty

days after you are denied credit, from the date

you receive notice that you have been denied

credit. Additionally, you can obtain your credit

report for free once a year at

annualcreditreport.com.

3. You have the right to know who has requested

a copy of your credit report within the past six

months—or two years if it was supplied to a

prospective employer.

4. You have the right to dispute any information

you believe is inaccurate or false. The Credit

Bureau must investigate all consumer disputes.

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If the information is found to be inaccurate or

false, or if it cannot be verified within a

reasonable amount of time (usually thirty days)

the Credit Bureau must remove the information

from your credit report.

5. You have the right to submit, in writing, a

statement disputing information on your credit

report; the Credit Bureau must place this

statement in your credit file.

6. You have the right to file a statement of

explanation regarding any information in your

credit report, and to request that your statement

of explanation be sent to future credit grantors.

7. You have the right for all information more than

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seven years old to be deleted from your credit

report (the only exception to this is

bankruptcies; these must be deleted after ten

years).

8. You have the right to be informed of any

investigative consumer report any business

requests on you.

Are you sensing a pattern here? The Fair Credit

Reporting Act is focused solely on your rights as a consumer. It

protects you from being taken advantage of and ensures that

any credit application you file will be evaluated based upon

accurate information. However... it also means that the burden is

on you, the consumer, to request copies of your credit report,

study them, and dispute any information you believe doesn't

belong there. The law is on your side—but no law can protect

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against human error, and you might be amazed by how many

incorrect entries are on the average credit file!

In Conclusion: How Credit Scoring Benefits You

"I don't get it," you may be saying. "Secret mathematical

formulas? Scores that mean different things to different lenders?

None of this makes any sense. Is this some sort of conspiracy?"

Not at all! On the contrary, the Consumer Credit

Protection Act, the Fair Credit Reporting Act, and the credit

bureaus' use of standardized FICO scores mean great things for

you. It means that consumers who have taken good care of their

credit can be approved almost instantly for credit or loans—

something almost unheard of in the past. It means that every

credit application you submit will be evaluated objectively; any

prejudices individual lenders may have are rendered completely

null and void when they're simply staring at a number (and

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perhaps some other information related solely to your financial

history). And, it means that consumers who have had trouble

with their credit in the past can not only work to remove

misleading or inaccurate information from their credit file, but

they can work towards improving their credit, a process which

takes time—but cannot be stopped or slowed. Since FICO

scores are based on large volumes of verified statistical data,

your own score is purely objective—which makes the entire

process as fair as possible.

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Chapter Two

Credit Repair Myths and Mistakes

"But I thought..."

There's a common saying in the military about making

false assumptions: "Assuming makes an ass out of u and me."

Unfortunately, collection agencies, creditors, and others involved

in the industry often employ subtle propaganda that perpetuates

the myths and mistakes we're about to discuss. Misinformation,

when used correctly, can be a powerful tool; recall the Cold War

and the use of propaganda on both sides of the Pacific Ocean?

This chapter will walk you through some of the most common

myths and mistakes the credit industry wants you to believe and

act on. Armed with this booklet and your wits, you can easily

dodge most of the misinformation coming at you. Remember

that the most effective falsehoods mix truth with a sprinkling of

untruth—it is your job, as a smart and savvy consumer, to sort

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through the myths and the statements spewing forth from these

companies and decode the relative truth of each. Listed below

are some of the most common to get you started.

One common myth is that a paid debt, no matter its

status, will simply show up as "paid" on your credit report.

Unfortunately, this isn't the case. In Chapters Four and Five we'll

discuss various suffixes the credit bureaus attach to each of

these paid debts—but if you are paying off a debt that is over

thirty days late, often it will show up on your report as "paid

collection," "paid late," or "paid charge-off," all of which have a

negative impact on your credit score. In future chapters we'll

discuss some of the ways to combat this method of statement—

but simply assuming that each paid debt will appear as "paid" on

your credit file is wrong.

Another myth the credit bureaus have carefully infiltrated

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into the perceptions of everyday consumers is the impossibility

of deleting items from your credit file. Like we mentioned in

Chapter One, this is simply not the case! Items aged over a

certain period of time must be removed from your file by law, as

well as any disputed items that were not verified within thirty

days of an investigation. The latter process can be misleading,

though, and the bureaus have done nothing to dispel the myth

surrounding it. As an example, let's say you're going through

your credit file and you notice an outstanding debt on your

Macy's account that you're certain you paid off. You write the

credit bureaus asking for an investigation, which they are

required to conduct; after thirty days they find no proof that the

debt is valid so they delete it. A month later, it reappears again.

Why?

Popular belief holds that the item simply cannot be

deleted; but the truth is investigations take time, and often are

not high priority for many of the creditors and bureaus. The

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bureau conducting an investigation is required by law to remove

the item after thirty days; but if, after six weeks, the creditor

responds to the inquiry with an unpaid balance, the item will

reappear on your file. Conversely, if the account has been paid

or the creditor simply doesn't respond, the deletion will become

permanent. This is often referred to as a "soft delete," and it

explains why so many people believe any disputed item will

simply return to their file.

Keep in mind that if it does return to your file, you have

the right to dispute it again! We'll go over the process in more

detail in Chapter Four, but this is a theme you'll see again and

again throughout this booklet: Persistence is key.

Finally, there is no item that cannot be deleted. Even the

most serious entries, such as judgments, bankruptcies, and tax

liens have to be removed after a certain period of time; none of

these will stay on your credit report forever.

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Another dangerous myth surrounds bankruptcy. Many

people think bankruptcy allows them to clean their slate and

begin over again, without the stigma of late collections or unpaid

debts hanging over their head like the Sword of Damocles—but

nothing could be further from the truth! In reality, aside from the

large black mark bankruptcy itself leaves on your report, every

single account included in your bankruptcy filing will be listed as

"included in bankruptcy." These filings will remain on your report

for ten years, virtually ensuring that any credit you can obtain will

be at very high interest rates with a very low credit limit.

Bankruptcy is something you should avoid at all costs! The

damage inflicted by a bankruptcy filing is far beyond what your

credit may look like at this point in time.

Another myth is that creditors will take a close look at

your credit file to determine whether you're eligible for a loan or

other form of credit. This is a nice myth to believe in because, if

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you (like the vast majority of Americans) have a couple flaws on

your credit report, creditors should be able to discern those from

the rest of the report, right? So you missed a couple payments

five years back—that was a long time ago, and things are way

better now. You just started at an awesome job and moved into

a penthouse suite, and you've got plenty to spare—doesn't seem

like there should be any issue, right?

Back in the day, that was the case. Any time you applied

for credit, a bookkeeper would request a copy of your credit file

from the local credit bureau (this was before the Big Three

dominated the credit bureau landscape) and pore through its

contents, line by line. Each item would be considered within a

larger context and you may be called in for additional questions

or explanation—giving you a chance to explain how you were

laid off, but now you're doing much better. You might even be

asked for a personal pledge declaring your intentions to repay

the debt in a manner consistent with the terms of the loan!

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Unfortunately, in today's economy that process just isn't

as feasible as it used to be. Rendering a fair credit decision

requires skilled human beings taking time to examine every

applicant's credit report, and with the amount of applications and

the scale of credit in today's economy, judgments would be

delayed weeks or even months. Computers stepped in to

process the data within moments; but until the advent of artificial

intelligence, it's simply impossible for any computer to view a

credit file within a larger context. It will simply process the data

as it sees it and provide a number. Ostensibly this is a fair way

to make decisions, and in most cases it is; like we discussed in

Chapter One, this dispassionate method of credit approval takes

every variable unrelated to your financial history out of the

picture, ensuring the judgment is based solely upon your risk

rating and ability to pay. But for those consumers teetering on

the edge, sometimes that just isn't enough. That's why clearing

your credit file is so critical in today's credit-based economy.

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Finally, let's examine the myth of the hundred-word

statement. It is completely within your legal rights to append any

item in your credit report with a statement of no more than a

hundred words. What a great idea! You can make sure anyone

who reviews your file knows exactly why you missed a payment,

what happened to that car that got repossessed, or why your

insurance premiums suddenly skyrocketed. It wasn't really your

fault, right? Explaining it will make it all better.

Except...remember the myth we just discussed?

Computers can't take these into account, and it is highly unlikely

that an actual pair of human eyeballs will ever gaze upon your

credit file. Your hundred-word statement, in effect, means

absolutely nothing. Additionally, even if someone were to look

over your credit file, a statement appended to any item will read

the same to them: "Yes, I was irresponsible with this credit

account. But, [insert laughable excuse here]." Your statement

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will only prove to creditors that you were at fault—so it's

advisable, when you begin to fix your credit file, to remove these

as fast as possible! Think of it like your credit file's Miranda

rights. You have the right to remain silent. Anything you say can

and will be used against you... So why say anything?

With those myths in mind, let's take a look at some of

the most common mistakes people make when trying to fix their

credit. Keep in mind that no matter how much good credit you

have, bad credit tends to weigh exponentially heavier on your

credit score—so a couple late payments here and there, or a

collection agency stepping in, can cause a credit card denial or

the interest rate on your car loan to balloon up. Remember the

formulas we were discussing in Chapter One? Oftentimes

creditors don't even look at your credit report—they allow the

computer to scan it through and spit out an acceptance or denial

based on its algorithms—a process which takes mere moments.

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To repair your credit we first have to remove your bad credit.

We'll discuss the process in more detail in Chapter Four, but for

now, let's examine some common pitfalls people make—and

how to avoid them.

The first common mistake people make is failing to

dispute with the credit bureaus first. Remember that it is the

bureaus, not the creditors, that keep all the information on file so

potential lenders can access it; and under the Fair Credit

Reporting Act, they are required by law to conduct an

investigation. Up to twenty percent of all the items disputed with

the credit bureaus in a first round of disputes fall away, so why

not take care of those so you can focus your efforts on the

tougher issues? Also, you're unable to take legal action against

creditors who are acting illegally if you do not dispute the

statements first. Simply put, disputing with the credit bureaus is

one of the easiest—and definitely one of the first—actions you

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should take when undergoing a cleanup of your credit file.

Chapter Five outlines how to go about contacting the bureaus,

as well as steps to take if a particular bureau isn't cooperating

with you like they should. Remember, these are your rights—

exercise them!

Another common mistake is failing to keep good

records. You should always keep very precise records of each

dispute with each bureau or creditor, and you should always

send your dispute letters Certified Mail, with a return receipt

requested. Keep a detailed log and always make a note of who

you spoke to on the phone, the time and date of the phone

conversation, and the date you sent or received any letters.

Why? Not only will it make your life substantially easier if you

know where to find everything, but remember that investigations

are required to find results within a reasonable amount of time—

thirty days. If you have detailed proof that an investigation has

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stalled or lasted longer than thirty days, you can use this proof

when demanding that the item in question be removed from your

credit file. Credit bureaus are legally obligated to do this—and

again, if one of the bureaus gives you a spot of trouble, you have

the records to back up your claims during the process. To save

yourself time and effort—and to give you a solid legal foundation

if drastic steps are necessary—you should always make sure to

keep your records organized and complete.

Disputing items online is a huge mistake for a lot of

reasons. Primarily, though, if you file your dispute online you

make it exponentially easier on the credit bureaus—in this case,

"easier" is not a good quality. For starters, you will not have any

hard-copy records of your disputes—remember the mistake we

were just discussing? Furthermore, however, key items you

need to include in your dispute—such as wrong high balance,

wrong date account was opened, supporting documentation,

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corrections of personal information, etc—can't be written in an

online dispute. Essentially, by disputing online, you are reducing

your dispute to a two-letter code which is then sent, using a

program called eOscar, to an offshore computer for analysis. (A

hint: if you haven't picked up on it by now, there are certain

things in the credit process that you absolutely do not want to

entrust to computers. This is one of them.) We'll cover eOscar in

significant detail in the next chapter; for now, trust us when we

say you don't want to deal with it.

Finally, the most important mistake you can never make:

Never give up hope or quit altogether! Persistence is key in this

process (see, we told you that would come up again).

Oftentimes you will be talking to people who don't want to help

you, who don't know how to help you, or who don't have the

power to help you. You may find yourself talking to people who

have had a bad day, or who have a vested interest in not helping

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you. You may run into the same problems over and over again;

you may dispute the same item countless times. And at every

turn you will be bombarded by reams of propaganda the credit

bureaus, collection agencies, and others in the credit industry

use to try and dissuade you. But don't give up and don't lose

hope! For every agent you speak to who can't, or won't, help

you, there is an agent in the adjacent cubicle who genuinely

cares about his or her debtors and would like to help you.

Propaganda can be fought effectively simply by educating

yourself. Persistence is key. Keep records, keep fighting, and

always remember to treat everyone you encounter with

respect—eventually you will make significant gains toward your

ultimate goal: a healthy credit report.

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Chapter Three

eOscar

"I'm a one hundred percent grouch and I'm proud of it."

Everybody's familiar with Sesame Street: Bert, Ernie,

Big Bird...and Oscar the Grouch. In the 1970s he was a big

green puppet launching himself (and detritus) out of a trash can

to make grumpy statements at the rest of the cast. Now his

name is eOscar and in the 21st century he's popping out of your

Recycle Bin and flinging denial papers at you. Nobody likes a

grouch.

The official eOscar website, www.e-oscar.org, describes

the purpose of this online credit verification system:

e-OSCAR is a web-based, Metro 2 compliant,

automated system that enables Data Furnishers (DFs), and

Credit Reporting Agencies (CRAs) to create and respond to

consumer credit history disputes. CRAs include Equifax,

Experian, Innovis and TransUnion, their affiliates or Independent

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Credit Bureaus and Mortgage Reporting Companies. e-OSCAR

also provides for DFs to send "out-of-cycle" credit history

updates to CRAs.

The system primarily supports Automated Credit Dispute

Verification (ACDV) and Automated Universal Dataform (AUD)

processing as well as a number of related processes that handle

registration, subscriber code management and reporting.

ACDVs initiated by a CRA on behalf of a consumer are routed to

the appropriate DF based on the CRA and subscriber code

affiliations indicated by the DF. The ACDV is returned to the

initiating CRA with updated information (if any) relating to the

consumer's credit history. If an account is modified or deleted,

carbon copies are sent to each CRA with whom the DF has a

reporting relationship.

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AUDs are initiated by the DF to process out-of-cycle credit

history updates. The system is used to create the AUD and route

it to the appropriate CRA(s) based on subscriber codes specified

by the DF in the AUD record. The e-OSCAR AUD process is

intended to provide the CRA with a correction to a consumer's

file that must be handled outside of the regular activity reporting

cycle process. e-OSCAR may not be used to add or create a

record on a consumer's file or as substitute for "in-cycle"

reporting to the CRAs.

Wait...what?

If you started to get a migraine, don't worry; you're in

good company. To break this down for you: essentially, eOscar

allows credit agencies to expedite investigations. Each dispute is

boiled down to a two-letter code and fired off to eOscar, which

then spits out a verification based on the information supplied to

it.

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Remember when we said there are some things you just

don't want to leave in the hands of the computers? This is one of

the biggies. What's wrong with this entire process? Let's go over

a few of the major trouble points:

First, agents in charge of submitting disputes have four

minutes to distill your entire dispute into a two-letter code. Think

about that for a moment. Your credit history rides on a

combination of two letters determined within four minutes (often

less) by an agent who has a sheaf of similar disputes to run

through before lunchtime. This hardly seems like a "thorough

investigation"--which is what you are entitled to under the Fair

Credit Reporting Act.

While we're going over the submission process, let's

take a peek at the AUD. On the AUD (that's Automated

Universal Dataform, if you lost yourself in the myriad of

acronyms) there are two slots for each datum of your personal

information: two SSN slots, two address slots, etc. The

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information supplied by the agent submitting the form does not

have to match the information supplied by the creditor.

Let me repeat that.

The information supplied by the agent submitting the

form does not have to match the information supplied by the

creditor. If your SSN is "close" to what's submitted, it's checked

off as valid. If the address is wrong, they simply update the

address to what the creditor has on file (even if it's totally

wrong—which would be the case if the debt was not yours)

which makes it next to impossible to continue contact (submit

disputes and have them responded to in a timely fashion) with

the creditors and bureaus.

Sound like a mess? It really is. To put the icing on this

cake of doom, only three pieces of information on the form have

to match. If the social security number is totally wrong, but three

other datums check out as "valid" (within eOscar's realm of

valid—meaning it just has to come maybe--sort of--kind of close)

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the debt is verified as yours and reflected as such on your credit

report within hours or days. Your rights demand a fair and

honest investigation—this doesn't sound like what you expected,

does it?

If you suspect this is a primary reason why your disputes

keep getting "verified," re-file disputes. Re-file again and again

(persistence is key!) until eventually someone will actually have

to look at the file with their own eyeballs. If all else fails,

document the entire process and take your complaint to the

Federal Trade Commission, and if need be, small-claims court.

You can find contact information for the FTC in the back of this

booklet.

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Chapter Four

Cleaning Your Credit File

Five steps to ensuring your credit file is accurate

Spring cleaning. We've all been there. Like bears, often

we go into a period of hibernation during the winter, where we—

and all our possessions—pile into whatever space is available to

wait out the cold. But when you open your windows to find the

first flowers blooming and a fresh breeze floating through the air,

the bear awakens and it's time to start anew. So you open your

closets, your garage, your outdoor shed—and find things piled

floor to ceiling you forgot you ever had! Some need to be thrown

out, others kept, but the process is one of rebirth and renewal

and ultimately is a rewarding experience.

Cleaning your credit file is oftentimes the same. Opening

your file after months—or, in some cases, years—can be a

daunting task. Cobwebs will stretch over accounts you've

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forgotten, and you will undoubtedly find many things that

deserve to be thrown away—but in the process you'll find a few

gems, and the satisfaction of a job well done goes hand-in-hand

with lower interest rates and more favorable responses from

creditors.

Going into your credit file—especially if it's the first

time—can be rather intimidating. So many things are piled away

that you may not know where to begin! Fortunately, we're here to

help. We've laid out a simple five step process that—if

followed—will take time and patience, but will leave you in a

much better place financially.

Step One: Obtain your credit report.

Naturally, the first step is to acquire copies of your credit

report from the three major credit bureaus. Make sure you get a

copy from each bureau! As you go through the steps of cleaning

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your credit file, remember that each bureau is independent of the

others. One misleading statement will require three letters: one

for each of the credit bureaus. Also, an inaccurate statement on

one credit bureau's file may not exist on the others' files; so it is

imperative that you study each file closely.

As you begin this process, it might be helpful to begin

three folders on your computer or in your file cabinet, one for

each of the credit bureaus. As you file letters of dispute and

other statements, always keep a copy in your folder. This will

help you keep track of what's been taken care of.

Obtaining your credit report is a simple process.

Remember, by law you are allowed access to your credit report.

The bureaus will charge you a reasonable fee, usually between

eight and twelve dollars, for a copy of your report. Alternately, if

you know you have bad credit and you wish to get a copy of your

report for free, simply apply for credit anywhere. Once your

application has been denied, you'll receive a notice in the mail

41

informing you of the creditor's decision. Hang onto this notice!

You can call or mail each of the credit bureaus and request a

free copy of your credit report within a reasonable time of

receiving the notice (usually thirty days). Make a copy of the

notice and send it to each bureau with your request. You can

find the addresses and telephone numbers of each credit bureau

listed in the back of this book.

Step Two: Learn how to read your credit report.

As you sit down to analyze your credit reports, you'll

notice that each one seems to use a slightly different rating

system. Instructions on how to read each specific bureau's

report can be found on the back; but typically, each bureau uses

a designation of I, R, S, or O followed by a number 1-9.

The designations are labeled according to the type of

debt each account is classified under. For instance, a car loan is

42

classified as an installment payment and earns the designation I.

Revolving accounts, such as a credit card, are designated R.

The letter O designates open accounts like a standard loan,

where you borrowed the money and continue to repay it back

over a certain amount of time. Finally, the letter S is for signer.

Appended to the end of each letter will be a number; the

lower the number, the better your score will be. A numeral 9

means that the debt was written off or otherwise left unpaid. The

number 1, on the other hand, signifies that the debt was paid

back per the terms of the loan agreement, with no late or missed

payments—in other words, the best rating you can receive. So,

your goal is to stack your credit report with lots of R1 and I1

notes.

If you still can't seem to puzzle your way through your

credit report, or you run into something that doesn't make

sense—no problem! Credit bureaus are required to offer you

assistance with understanding your report. You can call them for

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assistance if you find an item that's giving you some trouble.

Step Three: Correct your credit report!

This step, while lengthy, is a lot easier than you may

think! Remember, credit bureaus are required by law to

investigate any disputes you have with your credit file, and to

remove any information listed incorrectly. Keep in mind, too, that

credit bureaus are simply information warehouses. Think of it

like a library shelf with religion books—every religion imaginable

may be on those shelves but the library itself doesn't advocate

any particular dogma, it simply makes the information available

to those who wish to read it. Credit bureaus don't approve or

deny loans, or take any financial risks associated with a

particular credit score—they simply compile the information and

make it available to creditors, employers, and other institutions

who need to refer to it.

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The correction process takes three steps. We list them

in no particular order, along with a lengthy explanation of how to

go about cleaning up your credit file. Remember that this is a

long and somewhat tedious process—but persistence will go a

long way in helping you repair your credit!

Part One of the correction process involves making sure

your good credit is listed on your report. If you have had a good

credit account in the past and you want it listed in your report—

for example, an account with a department store—you can

dispute this, asking that it be added to your file. (Check the back

of this book for a handy credit dispute form you can use in

disputing records with the credit bureaus.) It should take nothing

more than a short, simple statement describing the nature of the

account, when you opened it, and whether the account is

currently open or closed. You can also revisit the business and

ask that they report your credit account to the three credit

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bureaus.

After the account has been added to your report, you

should get a letter from each credit bureau verifying the addition.

If you don't receive a letter, try calling the bureaus to ensure that

the addition has been placed in your file. Remember that the

three bureaus operate independently of each other, so even if

one bureau has the account you may have to send another

dispute to the remaining bureaus asking them again to fix your

file. Be persistent!

The next part of the process involves removing old

reports of bad credit from your file. Section 605(4) of the Fair

Credit Reporting Act states that you have the right—and credit

bureaus have the responsibility—to remove debt over seven

years old from your credit file. This includes charge-offs and

collections (eligible for removal seven years after the date of last

activity—when the debt went bad), judgments (eligible seven

46

years after the judgment was entered), and bankruptcies.

Bankruptcies are eligible for removal after ten years, not seven

as with all other debt; however, once you pass the ten-year mark

your right to have it removed is the same as with any other debt.

It is vitally important to note the definition of "last activity"

as it relates to your rights with debt reporting. Date of last activity

refers to the date the debt first went bad, or when you stopped

paying the debt. This will be a point of contention as you call to

dispute your reports—often you may be met with statements

such as "The date of last activity is when the debt was turned

over to the collection agency." This is wrong.

If you discover debt on your credit report that has

passed the seven year mark, call the credit bureau (or bureaus)

that issued the faulty report and request that the information be

removed from your file. If necessary, reference Section 605(4) of

the Fair Credit Reporting Act to remind them of their legal

responsibilities. Request a statement in writing to verify that the

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information has been removed from your report. Don't back

down!

After you have combed through your reports and taken

care of all the debt that has passed its age, make a list of the

debt that is close to passing the seven-year mark. You'll want to

keep a close eye on these to make sure they are removed from

each credit bureau's file—one of the reasons we suggested

making files for each bureau. Alternately, you could contact the

collection agency handling each item of debt and negotiate with

them; the fourth step details this process for you.

The final step is disputing false information—entries you

find on your credit report that are either not yours, or are yours

but are incorrect. It is astonishing how many people discover

false, incorrect, or misleading information on their credit card file!

People have discovered information listed in their name but with

the incorrect social security number, debts from places they've

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never been...the list goes on.

If you've found an entry on your credit report that you

believe isn't yours, or that has been reported incorrectly (for

instance, a charge card you paid off three years ago is still

reported as money you owe), you have the right to ask—in

writing—that the credit bureau conduct an investigation. They

are legally obligated by law to do this! If someone begins to

challenge you on this point, don't back down. You are fully within

your legal rights to ask for an investigation, and if they refuse to

do this they are in violation of your rights! Keep in mind that

investigations cost time and money for the credit bureaus and

the collection agencies, so occasionally you may run into

someone who tries to tell you they can't conduct an

investigation. Remind them as politely as possible that the Fair

Credit Reporting Act guarantees your rights to dispute the

information and request an investigation, and by not doing so

they are in violation of federal law.

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In cases where the entry is not yours, call the credit

bureau and request that they verify your social security number,

name, and amount owed on the debt. They will work with

creditors to verify these things for you. My experience has

shown that collection agencies are typically unconcerned about

where they collect the money; even if they've made a mistake

and the account is not yours, they will try to get the money from

you anyway. If this is happening to you and the agencies refuse

to correct their error—or the bureaus refuse to take the

information out of your file—you can contact the Federal Trade

Commission and ask them to investigate the matter for you.

Your legal rights will triumph in the end—persistence pays off!

If the account is yours but there is an error in its

reporting—for instance, if the amount owed or the date of last

activity is wrong—you can dispute the entry. Disputes of this

nature can be conducted one of two ways. Either you can write a

short statement of dispute on the form provided with your credit

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report or you can write a letter explaining your dispute. (You can

find both sample dispute statements and a sample dispute letter

at the end of the book.) Remember that the date of last activity

refers to when the debt went bad—as in, when you stopped

paying the debt.

If you have a paid collection on your file that is at least

eighteen months old, you can dispute this as well using the

dispute form on the credit report. The odds of the collection

agencies or lending institutions having immediate access to your

file is slim—and in most cases, they aren't going to dig through

tons of files and scan a bunch of microfiche to look up a paid

collection. The investigation will remain in stasis. This is a

loophole you can use to your advantage! Any investigation is

required to take a reasonable amount of time—thirty days or so.

If the collection agencies don't respond within that time frame,

the credit bureaus are legally obligated to remove that

information from your file.

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Step Four: Negotiate with collection agencies.

If any of your debts have gone to collection agencies,

you can call the agency and negotiate with them to have the

item either reported favorably to the credit bureaus or removed

entirely from your report. Keep in mind that collection agencies

usually don't get paid until they collect the money from you—

which gives you the advantage! Collection agencies specifically

hire individuals who can negotiate on their behalf. You will be

dealing with people who are skilled in the art of negotiation—but

you have the money, which gives you the upper hand. Negotiate

with confidence!

It works to your advantage to come forward yourself and

contact the agencies and creditors holding your debt, instead of

waiting for them to chase you down. Not only will you

accomplish your goals faster, the collection agencies and

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creditors will be pleased with you for taking the initiative—

another small, yet noteworthy, item lending weight to your

negotiation process. Another way to gain some ground during

the process—especially if you find yourself having to deal with

the same collection agency over and over again, or if the debt

you're attempting to negotiate is taking some time—is to

remember who you've spoken with and try to keep speaking with

them if possible. By establishing a business relationship with this

person—even if it is a distant acquaintanceship—you may find

this person more willing to help you.

A couple quick notes on negotiations—first, remember

that it benefits the collection agency to receive your payment

and this is their ultimate goal. Second, under no circumstances

should you reveal any information to the agencies other than

your willingness to pay your debt and your insistence that it be

removed from your file.

Finally, it is to your benefit to have the money available

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to pay the debt before you call the collection agencies to begin

bartering with them. If all you can offer is a payment plan, you

won't hold the high ground as well as you would with cash in

hand. Your goal is only to pay a portion of what is owed; but with

the cash in hand you can negotiate much more effectively. The

ideal standpoint for you to take is "You want my money, I want

my credit file cleared. I will pay you in cash today if you write a

letter to all three credit bureaus telling them to remove the

derogatory information from my file." Of course, you'll want to

phrase it a bit more politically, but this is the ideal ground from

which you can begin the negotiation process.

Initially you may receive a negative response to your

request to remove the information—something akin to "We

cannot do that." Be informed and insist that you know they can!

You may be talking to a collection officer at first who doesn't

have the power to do so. Your goal is to speak with a supervisor

or another officer who has the authority to negotiate with the

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credit bureaus—eventually you will find someone who has the

ability to have that information removed. This is the person to

negotiate payment with.

Let me share a personal example with you. Several

years ago, I was in the process of cleaning up my own credit file

in preparation for purchasing a house. One of the outstanding

debts on my credit report was a five-year-old debt of $300 that

had been turned over to a collection agency. I contacted the

agency and explained my situation, then told them I had $150 in

cash I could pay that same day if they would remove the debt

from my credit file. After a process of negotiation, we agreed that

they would remove the item from my file if I showed up with $225

in cash that day. I did, and asked for a statement in writing

verifying the removal of the debt from my credit file.

As you begin your own negotiation process, do

everything in your power not to argue with the person on the

other end of the phone! Remember that there is a difference

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between negotiation and arguing. The collectors you negotiate

with are people just like you, with families and bills to take care

of. Some of them may have had a bad day and can be negative,

grumpy, or stressed out—but don't take it personally. You'll also

find people who are genuinely helpful and willing to assist you. It

isn't in the collector's best interest to shut you down at every turn

in the negotiation process—remember, their employer doesn't

get paid until you give them the money! Negotiate confidently,

and realize that in the process you may have to make one or two

concessions. The difference between victory and defeat lies not

in making the concession, but knowing where you can bend a bit

and where you need to remain firm.

The most important item in your negotiation—the one

you cannot bend on—is how the collection agency will report the

debt to the credit bureau. Insist (politely, but firmly) that you will

not accept an entry of "Paid Collection," "Paid Charge-Off," or

"Paid Late." You want them to report it either as "Paid

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Satisfactorily and As Agreed," or simply "Credit Line Closed."

The collection agency, in their negotiations with you, will

likely insist on the full amount owed. You can then agree to pay

the amount (a reason to have cash in hand before negotiations!)

with a written agreement stating that the derogatory information

is deleted or replaced in your credit file; alternately, you can

continue negotiation on the next phone call if the terms of the

agreement aren't satisfactory to you.

A note on the "Paid Collection" entry: if all you can

achieve during negotiations is a commitment of this entry, accept

it—but in sixty to ninety days, dispute this entry. Remember that

the credit bureaus only put in their files what the collection

agencies or creditors report to them—they have no ulterior

motives or personal stakes. Ask for an investigation and

represent that it was your understanding that this entry was to be

removed. Finally, remember that this process will require time

and patience! There will be lots of investigations to come—but,

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through patience and willpower, you and your credit rating will

eventually emerge victorious.

Step Five: Negotiate with creditors.

If negotiations end up breaking down between you and

the collection agency, your next step is to go directly to the

source—the creditor whom you initially started the loan or line of

credit with. Your goals and the process of negotiation with the

creditors will be much the same as the process of negotiation

outlined in Step Four—again, keep in mind that ultimately, all

your creditors want is to have their money. Your goal is to have

the creditors stop reporting the debt to the collection agency and

to have the negative information removed from your credit file. If

you can reach an agreement over the telephone with your

creditors, great! Ask for a written statement verifying your

agreement and that the debt will be removed from your file, then

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pay immediately per the terms of your agreement with each

individual creditor.

If the account is reported incorrectly, write the creditor

using the same information and basic outline you provided to the

collection agencies and/or the credit bureaus. List your name,

address, and social security number, then ask that they

investigate the account and verify that it is yours. Make it clear

that you expect the derogatory information to be removed or

corrected on your credit file.

If the account is yours, and it is delinquent, then begin

negotiations to pay them with the same caveats you used in

negotiations with the collection agencies. The number-one thing

to remember is to be honest and up-front, and take personal

ownership of your mistake! Creditors have heard every excuse

imaginable for why an account hasn't been paid. (The dog ate

my bills...for the past nine months?) Be honest and admit that

you made a mistake, but that you are trying your best to correct

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it. You can even attempt to make a play on their good will by

telling them how you're attempting to clean up your credit file

and this is the only account standing in your way. (The Greek

orators called this pathos, or argument by emotion. Breaking into

tears will likely get you nowhere with creditors, but some gentle

nudges may help your case. Just don't overdo it!) I've used

these statements before in the past, and it seemed to soften

their stance slightly. Creditors who expect arguments, excuses,

and hot statements will, more likely than not, be impressed by

humility and honesty. Just make sure you've got the cash in

hand to back yourself up!

Your very last option during negotiations with creditors,

similar to negotiations with the collection agencies, is to

grudgingly accept a statement of "paid collection" in return for

the cash payment. Again, you'll want to check your credit file

after ninety days. If the account hasn't been appended to include

the entry, dispute it! If the "paid collection" entry had appeared,

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dispute this using the same methods you used with the

collection agencies—writing a letter to each bureau stating that it

was your understanding that this was to be removed from your

file. Let the investigation run its course and check again.

Remember that this process may take several repetitions before

you succeed in having the black mark cleaned up—persistence

is the key.

No matter whether it's a creditor or a collection agency,

keep in mind that each person has the same goals. Your goal is

to tidy up your credit file; their goal is to collect the money you

owe them. This negotiation process may seem tedious and

lengthy, and the very thought of spending hours on the phone

might even now be giving you a headache—but don't give up!

Aside from the economic benefits of having a clean credit file,

the feeling of paying off a loan is phenomenal—as is the

sensation of not having to worry about what's in your file.

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Finally, if you've tried to correct faulty information or

request an investigation and you've been shut down time and

time again, and you feel like your rights are being violated, take

action! Contact the Federal Trade Commission. You can find

addresses and phone numbers for both the federal headquarters

and regional offices in the back of this book. The FTC will send

you a complaint form at your request and investigate the matter

for you.

Conclusion

Are you stocking up on aspirin and chamomile tea like

it's Armageddon? Don't fret. Remember that the law is on your

side in this battle! Asking for credit bureaus to investigate faulty

reports on your credit file should be a simple process, and

though you may have to write several letters, you should never

62

have to fight with the credit bureaus over whether or not to

conduct an investigation. Don't forget that the Fair Credit

Reporting Act requires them, by federal law, to investigate any

item you request and ensure that your credit file reflects the

truth.

Negotiation with the creditors and collection agencies

may be a bit tougher. Dig your heels in and refuse to budge!

Once you have cash in hand, you have a strong negotiation tool

that you can use to your advantage. Remember, too, that

creditors and collection agents are people too, and if you treat

them with respect they're much more apt to help you out.

Nobody goes to work relishing the thought of ruining people's

lives or credit ratings. Treat them with respect, be honest, and

have the cash ready to back up any deals you might make, and

you'll find that your negotiations become a lot easier and you

accomplish your goals a lot faster.

Finally—and I can't stress this enough—be persistent!

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The Berlin Wall didn't fall with a single blow from a

sledgehammer, and your credit rating isn't going to skyrocket

with one phone call. Don't lose hope and don't give up.

Persevere. The rewards will be worth it.

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Chapter Five

Building and Maintaining Good Credit

Whew!

Okay, stop for a moment. Take a deep breath. Reflect

on what you've accomplished. Are your negotiations finished up?

Almost finished? Did you get your investigations handled in a

timely manner? Do your credit reports look a lot cleaner and

make a lot more sense?

Thought so. Step away for a moment and have a coffee

break. You've earned it.

Now that you've handled the negative aspects of your

credit file, it's time to start building the positive aspects. In this

chapter we'll cover how to build and maintain good credit, from

the first steps onward. The best thing to keep in mind during this

entire process is that maintaining good credit is about more than

just paying attention to the numbers – it reflects a paradigm shift,

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a change in the way you view money and credit. We've all been

in that situation where we have $75 in the bank account, $2000

in bills for the rest of the month, and no idea how we're going to

make ends meet—hopefully by making changes in your financial

perspective, not only will you build and maintain good credit, but

you'll never have to face a situation like that again. Nobody likes

staying awake at night sweating bullets while you consider what

bridge would be the best to live under if all else fails.

The Beginning: You've got to crawl before you walk.

The first thing you absolutely must have is a checking

account. I'm sure very few of you who pick this book up need to

rectify this situation—but if your idea of a checking account is

checking under the mattress to see how much money you have,

you must get one of these as soon as possible. Every time you

apply for credit, the application will have a space for you to fill in

66

your name, address, and social security number; right below

these spaces will be a line for you to list your bank name and

your checking account number. It's simply impossible to build

credit without having a checking account.

Next, as you begin to rebuild your credit, enlist the help

of your banker or loan officer. It will strongly benefit you to

realize that the bank is on your side—they are your allies as you

work to improve your situation! Treat them with respect and

always be honest with them. Every banker will stress the

importance of honesty when dealing with them. As I was in the

process of writing this, I asked my own banker if he had anything

to add. The first words out of his mouth were "People need to be

honest and up-front with us." People oftentimes will go to a bank

to request a loan and, when questioned about their credit

history, invariably the answer will always be a vague,

noncommittal "Oh, one or two little dings, you know." Why? If

you know your credit history—which you ought to by now—you

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need to represent it truthfully to your banker. There's no shame

whatsoever in admitting your situation, and your banker will

appreciate your straightforward answer—especially when he or

she pulls your credit report and sees the truth laid out in black

and white. Trying to hide the situation will do you no good.

Conversely, by being honest with your banker, he or she

will be able to help you by suggesting ways you can improve

your credit, as well as advising you on where to go to apply for

certain loans, such as a car loan or a mortgage. Don't be

intimidated by your perception of the power they may hold or the

status they may carry—remember that your banker can be your

ally, and by establishing a healthy relationship with him or her,

you'll build goodwill. You may be surprised by how far these

people will go to help you out! Be honest, admit that you're in the

process of rebuilding your credit, and your banker will advise you

and help you along the way—especially since you've come so

far yourself. Remember that there's no shame in asking for help

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when you need it.

One great way to establish a relationship with your

banker is by engaging them in a conversation about certain

loans. Ask them about business loans, education loans, car

loans, mortgage loans, personal loans—anything you have a

vested interest in and want to know more about. Asking your

banker what the "terms" of the loan are should give you an idea

of what level of credit is necessary to qualify with your bank.

Typical terms of a loan include being employed at the same

place for a year or more and having a good—not necessarily

exemplary, but good—credit report on file. Look in the back of

the booklet for a sample loan application and rating system

banks and other creditors use to determine eligibility for a loan.

Another great idea is to stop using drive-through

banking. By taking five extra minutes to walk into the branch

office closest to your home or workplace and doing business

inside, you become a familiar face. You can also use that time to

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poke your head into your banker's office to say hello. Address

him or her, as well as all the tellers, by first name whenever you

recognize them. Soon you'll become an individual person, a

familiar face, to them—being an individual human can go a long

way in helping you out. Psychologically, we feel more driven to

help someone we can see—think of the commercials advertising

for donations to help children in Third World countries. Everyone

knows, to some extent, that there are children in poor countries

suffering and starving. When the commercials tie that generic

story in with an actual child—that's when the money begins to

move to these charities. Remember the pathos argument we

discussed briefly in Chapter Three—the argument by emotion?

Subtly, by making yourself a friendly and familiar sight at your

branch office, you're invoking the same argument—without ever

having to make an argument at all. It's too simple to pass on.

It would also be a wise idea to consolidate as many of

your accounts as you can with one bank. For instance, if you

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have a checking account at one bank and a car loan through

another—combine the two! The easiest way to do this would be

to close your checking account and reopen it at the bank

financing your car, where you are already establishing good

credit—but you can have the first bank purchase the loan from

the second and finance (or refinance) it for you. Examine your

options to see what works best for you. If you can get a great

financing option through your first bank, that would be the better

decision; even though it means more paperwork it also helps

you dramatically in the long run.

Before you even begin to apply for another loan or some

other form of credit, there are a few things you should do to help

your credit score. First of all, make sure you're paying all your

bills on time! Making timely payments is one of the big ways a

lender can determine whether or not you're a good or a bad

credit risk. One of the most important things, though, is taking an

71

honest look at your financial condition. Honesty, again, is key

here—and though it's so easy to lie to yourself (who's going to

call you out on it?) the ability to properly assess your finances

will go a long way in helping you avoid being dragged to the

ground by debt again. In the back of this booklet you can find a

form to assist you in determining your finances. The top two

numbers you want to look at are net spendable income and

current debt load—from there you can make an educated

judgment about how much debt you can afford to saddle yourself

with. Common bankers' wisdom states that non-mortgage debt

payments should not exceed ten to fifteen percent of your

monthly take-home pay—this is a great rule of thumb to follow

when you're deciding how much debt to saddle yourself with.

The last thing you want to do is find yourself in a situation where

you have more debt than income!

Taking the Next Steps

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Okay, now what? One of the first ways you can begin to

reestablish good credit (or begin to establish credit) is by

applying for a loan.

"Wait, wait," you say. "How am I supposed to do that if

my credit isn't good enough?"

There are a couple options for you that will facilitate your

loan application—and help you build your credit.

Your first option is to find a cosigner with good credit—a

friend, a relative, a roommate. Your cosigner, in essence, takes

the debt load onto their own shoulders as well; you are

responsible for making the payments, but if you stop making

payments or otherwise back out on the loan, your cosigner is

ultimately responsible for the burden of the loan. This is the least

expensive way to acquire good credit, as long as you are

conscientious and pay off the loan on time and in full. If this

73

option isn't available to you, however, you can try a secondary

financing company.

Secondary, or "hard money source" financing, advertise

themselves with slogans such as "Your name is your credit."

These lenders specialize in facilitating loans for people with poor

or no credit history—however, the interest rate will likely be

much higher. I mentioned earlier that people considered "bad"

credit risks often have to pay higher interest rates, up to 30%

APR – the lender needs to enforce those higher interest rates as

a way to hedge against the greater risk of a default. Secondary

money sources often operate the same way, so if you choose to

borrow from one, make sure you only borrow what you can

afford! Once your loan is paid back, however, you will receive a

favorable entry on your report—one more step towards great

credit.

Another way to establish credit is to obtain a credit card.

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Again, there are ways to get around a poor credit history, or no

credit history at all—with credit cards, the best way is a secured

credit card. A secured credit card requires you to deposit an

amount of money equal to the credit limit you are asking for; that

way, if you end up backing out on the debt, the creditor has your

initial payment in reserve that can be applied to the balance of

the card. If you can afford to do this, make it a high priority! This

will be one of the easier ways for you to slowly gain a greater

credit rating. And just by having a major credit card, you can

often find a department store or other large retail center that will

approve you to open an account with them, as well. Now you

have two revolving accounts, and as long as you make your

payments in a timely manner, they will begin to reflect very

favorably in your credit file.

If you opt for a secured credit card, you can request that

the card become unsecured after twelve months of an

unblemished payment record. Depending on how far you've

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come in repairing your credit rating and fixing up those bad

entries (see why that chapter was so critical?) your banker may

view you as a favorable credit risk and unsecure your credit

card, giving you access to its full credit limit. Again, as with all

loans, it is absolutely imperative that you make your monthly

payments on time! Also, make sure that your choice of card

reports to the credit bureaus—sometimes secured credit cards

do not appear on your credit file. As long as you choose the

correct card, it will help your credit rating grow.

Note: With the new law passing February 22, 2010, it is

very hard to obtain a credit card with no credit. One of the fastest

ways to build up your credit, though, comes in the form of car

loans. Be aware, though, that some banks will put your co-

signer's name first on the loan application. Don't let them do this!

This will hurt your co-signer's credit score while benefiting you in

no way whatsoever. Make sure your name comes first.

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Similar to a secured credit card, banks also offer

secured loans. Instead of using money up-front (which is also

possible) banks will secure these loans by using collateral—for

instance, the title to your car, or ownership of your possessions.

If you choose to go this route, let your banker know that you are

trying to establish your credit and you would like to apply for a

secured loan that you will be approved for. Make sure the terms

of the loan include at least twelve minimum monthly payments,

and that the details of your loan will be reported to all three credit

bureaus. Once you're satisfied and you have the loan, make

sure to pay it on time! Your collateral (the car title or the lien on

your possessions) will return to you once the loan is paid in full

and the account closed, and you will have a nice, shiny new

addition to your credit file.

Another way to establish credit is with a forced savings

plan—essentially, by using the bank's money to help you

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establish your credit. You can do this by borrowing the bank's

money and securing your loan with the money you just

borrowed—but it is important that you are honest with your

banker about this! Having a good relationship with your banker,

and establishing trust with him or her, is critical to securing his or

her help in making this happen for you. Simply explain that you

are trying to establish good credit and would like some help in

doing so. If your bank can't make this happen for you, then

strongly consider switching to one that can.

For example, say you borrow $500 from your bank and

place it immediately in a savings account. Note that the money

never leaves the bank! However, now you are on a payment

plan and you pay down your debt, perhaps over six months. This

account goes onto your credit file as an R1 rating and you now

have $500 in your savings account. Repeat this process as

many times as you like; remember, you are establishing good

credit. You have to look at it as if someone told you it would cost

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you $100 a month for twelve months to establish good credit;

would you do it? Of course. Most people would. But what if you

were told it would cost you $100 more a month for your car

loan? It all depends on the amount of the loan. What will this

really cost you? The difference between ten and twenty percent

on a $5000 loan is not what most people think, so make sure

you don't just examine the interest rate when paying your credit!

Remember, you only pay that high until the loan is paid off, your

credit is rebuilt, or your credit score is high enough hat you can

successfully refinance your loan—so make sure you pay all your

monthly payments on time.

Another way to establish good credit is through a high-

end retail store, such as a furniture store or jewelry store. Often

these establishments will offer third-party financing through a

finance loan company that, in essence, "carries the paper" for

them. The interest rate is higher than if you secured a loan with

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a bank, and the payment process is slightly different: oftentimes

your payments go toward the interest first, with only a small

percentage applying itself to the principal loan. These loans take

time to pay off, but there are a couple benefits to this process.

First, there is often no penalty if you pay the loan off early—a

valuable option for those who don't wish to continue paying the

accruing interest. Also, as with any other loan, as long as you

make timely payments you've earned another I1 rating—and

perhaps a beautiful couch to place in your family room.

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Chapter Six

Credit Cards

Paper or plastic?

To help you establish good credit, often one of the

easiest ways is to go with plastic—a credit card you can keep in

good standing. Making payments and keeping a low balance on

your credit card will nudge your credit score upward each month,

helping you establish the score you want. Keep in mind that you

need to show you are responsible with saving enough up each

month to pay what you owe—so don't charge your card and pay

off each month! Keep your balance below fifty percent but keep

a balance on your card to show you are responsible with

revolving credit.

As you weigh your options, it's smart to also know what

kind of credit cards you'll be able to get and which ones will be

most advantageous to you. We have already covered the

difference between unsecured and secured credit cards and

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examined what a secured credit card can offer you. However,

there are far more subtle differences within the credit card world

that you'll want to take a closer look at. The information

contained in this chapter is only but a brief primer on the types of

credit cards available, and you'll want to do further research into

each individual type of credit card before applying; but this will

start you on a great footing.

We'll refer to the most common type of credit card as

simply a "regular" credit card—this is the type of credit card

you're likely most familiar with. Regular credit cards are

considered revolving accounts; that is, the amount you owe

changes with each payment you make and each charge you

place on the card. Your regular credit card will come with a

preset limit, restricting the amount you charge on the card to the

upper limit you are allowed. When making payments on this

card, you have the option of either paying the card in full or

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making a payment equal to or greater than the minimum

payment requirement each month.

In comparison, charge cards require you to pay the full

balance each month; there is no option with a charge card to

make monthly payments. However, there is typically no preset

spending or credit limits; in addition, there is no interest charged

on the amount you owe.

For those with poor or no credit history, often a sub-

prime or "poor credit" credit card is the only option available to

them. These cards are marketed specifically to people with low

credit scores; however, and you may expect, there are a few

drawbacks associated with a credit card targeted towards the

low end of the spectrum. Because of the higher risk of default

associated with lower credit scores, the creditors will charge high

interest rates and offer a relatively low credit limit to minimize the

financial risk they are taking. Also, large up-front fees are often

required when applying for these cards. If the fee is exorbitant,

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do not do this at all costs!

There are also several sub-categories associated with

credit cards. Some are standalone options; others are certain

programs or restrictions placed on a credit or charge card. Such

sub-categories include rewards cards, student cards, business

cards, and catalog cards. The characteristics of these categories

are nearly self-explanatory: rewards cards offer incentives for

purchases, and the latter three cards are only available to

students, businesses, and consumers purchasing from a specific

store or catalog, respectively. These restrictions or advantages

may or may not be applicable to any of the credit or charge

cards you are interested in. Often, a bit of research into the

specific card will tell you all you need to know.

Junk mail?

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Many of us get credit card offers in the mail roughly

every two hours. Most of us have a tendency to pitch these into

the trash can as soon as we see the envelope; statements such

as "You've been pre-approved..." have a tendency to ring hollow

in our ears. But as you begin to shop around for credit cards,

these offers may appear more and more alluring to you—but can

you really trust what they say? And what does any of it mean,

anyway? Finding these offers ultimately leads to more

questions—fortunately, we can offer you some insight into what

you've been receiving in your mail. Of course, you should look

up the Internet sites for each offer you're interested in to get

more details.

The envelope you hold (or will hold) will contain either of

two basic types of offers. The first offer, pre-approved offers, are

offers that have been made based on your credit history. There

must be a firm offer of credit for them to place this statement in

their advertisement to comply with federal law; so if you decide

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to apply for this offer, you should receive an approval. The

caveat to this is if your credit history has experienced a

significant decline; if this has occurred, you may be denied.

In comparison, invitations to apply for a card are not

based on your credit history; they are what they say they are,

namely, an advertisement drawing your attention to their credit

card and inviting you to submit an application. Federal law does

not require them to extend a firm offer of credit to you. If you

choose to apply, they will review your credit history and make

their decision based on what they find at that time.

Regardless of which offer you discover when you open

the envelope, be keenly aware that the terms and conditions

outlined in the offer may not extend fully to the cardholder

agreement once your application has been processed and

approved! The terms and conditions they describe often are the

best case scenario, not necessarily the terms and conditions you

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will qualify for. For instance, you may not be eligible for the

interest rate they initially state in their offer. Make certain you

examine the cardholder agreement thoroughly to determine what

the actual terms and conditions of your new credit card are.

Below are some examples of offers you may find; be

informed about these offers, because the offer and the reality of

your cardholder agreement may not always be identical.

You have been approved for a credit line of up to

$50,000. As we covered before, the statement "you have been

approved" means the offer has been made based on your credit

history. But do you really qualify for a $50,000 credit limit? The

key to this statement is the phrase "up to." Often the actual

credit limit is going to be lower than the offer initially stated.

No annual fee. At first glance this seems like an

excellent condition—not having to pay for the privilege of using a

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credit card is a major bonus. However, be sure you examine the

cardholder agreement thoroughly if you receive a card with no

annual fee. (You should examine it thoroughly anyway, as we're

sure you're beginning to realize.) These cards may require you

to make a minimum amount of purchases within an allotted time

frame; if you fail to do so, you will often be charged an inactivity

fee which far exceeds the amount of any annual fee you would

have to pay with another card.

Fixed introductory rate. This is exactly what it sounds

like—an interest rate offered to lure consumers in, which will

change once the introductory period is over. Once the period

expires, your card will often jump to a much higher rate of

interest—or switch to a variable rate, which changes based on

certain conditions (most often the prime rate). Be wary of these

cards and always try to determine how long the introductory

period is, and what the rate will become after this initial period—

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because that's the rate you will be stuck with once the initial term

expires. Make sure to look on your statement, and see how long

it will take to pay off your card.

Fixed interest rate. This is a better offer—but "fixed" is

used loosely here, as these rates can change at any time

provided the creditor gives you a fifteen-day notice of the interest

rate change. These rates are also tied very closely to the

stringent terms and conditions outlined in your cardholder

agreement, as well as the good standing of your card. If you

violate any of the terms and conditions, or if you pay even a day

late, this interest rate can jump significantly or even switch to a

variable rate.

Keep in mind that your cardholder agreement is a legal

and binding contract. By using your new credit card, you have

agreed to the terms—in effect, you have signed the contract

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your creditor has provided you. Be aware that similar to a fixed

interest rate, terms and conditions can change as well. Your

creditor will notify you of any changes, typically by mail; again,

using your card binds you to the new terms and conditions,

regardless of whether or not you have read them! It is vital that

you read everything your creditor sends you, and we advise

keeping it in a file you can easily access for any questions. You

should call your creditor if you have any confusion about offers

you may receive, or the terms and conditions you are bound to

honor. To help you get started, though, we've compiled a list of

the most common terms used in these agreements and provided

definitions for you.

• The annual percentage rate (APR) is the interest rate

charged on a card, expressed as a yearly rate.

• The daily periodic rate is your APR subdivided into

365 increments.

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• Variable rates change according to a set formula; this

formula is often based on the Federal Prime Rate, which

you can find online at www.wsjprimerate.us or in the

business section of your local newspaper. A variable

interest rate expressed in these terms may have a

variable formula of Prime + 3%.

• In contrast, fixed interest rates can only change with

fifteen days' notice from your bank, unless you miss a

payment or violate the terms and conditions in the

cardholder agreement.

• Default (or penalty) rates take the place of your

original APR if something goes south—such as a

bounced check, missed payment, or a severe drop in

your credit score. This rate can also be applied to cards

if you miss a payment on one of your other accounts—

some creditors will do this.

• The cash advance APR is the interest you'll pay if you

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use your credit card for a cash advance instead of for a

purchase. Many creditors charge a higher APR for cash

advances.

• Be aware if arbitration is in your cardholder agreement.

Arbitration guidelines may prevent you from suing the

creditor, unless your dispute is small enough to be filed

within small-claims court. The trial process is replaced

by arbitration, a dispute resolution that is legally binding

with no chance to appeal.

• The presence of balance transfers on your agreement

give you the ability to transfer the balance from one of

your credit cards to your newest. This is especially

helpful if you want to transfer a large balance with a high

APR to a card with low APR. Be careful about this

though; if the balance on your old card exceeds the

credit limit on your new card, you will still have a

balance remaining in the older account and will not be

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able to close it. Do not do this! You need to keep your

card balances under fifty percent of their credit limit;

going above this percentage, especially if you run your

card to its limit, will hurt your score. If applicable, interest

on these transfers will begin to accrue immediately.

• Convenience checks are similar to your typical check,

but these are linked to your credit card account instead

of your checking account. They can be used to transfer

balances between cards, or to make purchases and

payments as if you were writing a regular check or

swiping your credit card.

• If your cardholder agreement includes double-cycle

billing, be aware of this, as it may result in additional

finance charges. Double-cycle billing calculates your

interest based on your average daily balance over a

period of two months.

• A grace period is the length of time (typically thirty

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days) no interest is charged if you are not carrying a

balance on your credit card. If you use your credit card

sparingly and pay the balance in full by the end of each

month, you may not be accruing any interest if you are

within the terms of the grace period.

• The minimum monthly payment on your card is self-

explanatory—it is the absolute minimum the lender

expects you to pay each month. You can pay more if

you wish. This works hand-in-hand with the payment

due date, another self-explanatory term that has a

much higher figurative weight. Be educated on the terms

and conditions associated with your card's payment due

date—some cards require that you pay not only by a

specific day, but before a specific hour. For instance, if

your credit card requires you to pay by 1:00 pm on the

fifth of each month, even paying an hour late on the due

date could have severe consequences.

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Finally, you'll want to educate yourself on the various

fees that your credit card company may slap on your card and

ways to dodge these unnecessary charges. Keep in mind that

each creditor uses their own rules when it comes to creating and

assessing fees; this list is by no means comprehensive, but it

covers some of the basic fees and suggests how to avoid them.

• Annual or monthly fees are often assessed on charge

cards, rewards cards (such as a card that gives you a

certain amount of airline miles per $10 or $100 spent),

secured and sub-prime cards—just to list a few. Regular

credit cards may assess these fees for inactivity, as

well. If you are comparing the relative costs of a fee-

based card to a no-fee card, decide whether the tradeoff

(in rewards points, miles, or credit building) is enough to

justify the fee. If you have a credit card that does not

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typically charge fees, make sure you educate yourself

with the terms and conditions associated with your

specific card so you can avoid paying these.

• Application processing fees are generally only

assessed on sub-prime and secured credit cards. You

can, however, find secured credit cards with no

application processing fee if you do a bit of shopping

around. Since secured credit cards are often a better

deal than sub-prime cards, this is your best bet.

• An account reopening fee will be assessed if your

credit account is closed or canceled by the issuer (due

to violation of terms and conditions or inactivity) and you

ask to have it reopened. Avoid this by paying your bills

on time (something you ought to be doing anyway,

right?) and by using your card at least once or twice a

month.

• Balance transfer fees are assessed when you transfer

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a balance from one card to another; however, many

cards allow you to do this with no fees for the first

couple of months or so. Make sure you investigate to

determine whether your card will allow you to do this for

free. If you plan on doing this with a new card (for

instance, if you're looking for a card to transfer your

high-APR account balance onto) it's a wise idea to keep

this in mind as you shop for your new card.

• If you travel a lot, be aware of currency conversion

fees. These are assessed if you purchase something

overseas and the charge on your card (for instance, a

bottle of wine for eighty-five Euro) has to be converted

into U.S. dollars. If you do plan on traveling often, keep

this in mind as you look for a card.

• Late fees are self-explanatory; glance at the definition

glossary if you need help remembering. Be aware of

when your creditor demands payment; some want it by

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a certain hour. Send payments early if possible to avoid

these.

• Overlimit fees are assessed when you go over your

credit limit. Keep a good eye on your balance and know

your credit limit to avoid this; if you need your limit

raised, talk to your creditor.

There are plenty of other fees that exist in the world of

credit cards, fees that could potentially appear on your

statements if you're not careful. Luckily, a little research and

caution goes a long way in avoiding unnecessary fees assessed

to your account. We've covered some of the most basic ones,

but do yourself a favor and comb through your cardholder

agreement to determine what fees apply to your specific card

and how to avoid paying them. Remember that a vast majority of

the fees assessed are because of violation of the terms and

conditions—by being careful and keeping a good eye on your

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credit account, you'll be able to avoid these as you build

excellent credit.

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Chapter Seven

Debt Collectors

Keeping it clean—and making sure they keep it clean too.

Everybody makes mistakes. Everybody has accidents.

Perhaps you got injured at work and the workers' compensation

checks aren't enough to cover the debt load you've suddenly

accrued. Perhaps you weren't watching your debt to asset ratio

as well as you could have and you found yourself in too deep. Or

perhaps the transmission fell out of your car and now you have

to buy a completely new one, putting your debt to asset ratio well

over where you wanted it. The reasons are irrelevant—but now

you're in a spot of trouble and you find that one or more of your

debts have been turned over to collectors. This isn't the end of

the world! You'll have to pay that debt off as quickly as possible,

and perhaps re-enter the negotiation stage (see Chapter Two

again if you need a refresher), but with this booklet you can learn

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what collectors can and can't do—and you can make sure they

play fair as you're climbing back to the top of your pile.

The very first step is to investigate the specific debt

brought to your attention by the collector; sometimes debt

collectors or creditors make mistakes. Remember that the

collection agency likely doesn't care about whose name belongs

on the debt—they just want their money. However, the Fair

Credit Reporting Act, Fair Debts Collection Practice Act, and

Consumer Credit Protection Act specifically safeguard you

against this sort of practice. Of course, the law cannot forgive

you of any debt you legitimately owe—but if it turns out the debt

is yours, there are very specific rules regarding what debt

collectors can and cannot do.

Debt collectors (including attorneys who collect debts on

a regular basis) are governed by a set of rules and protocol that

begin from the very first contact with you. A debt collector cannot

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contact you through certain means, such as a postcard, collect

call for which you must pay, or telegram for which you must pay;

the only legal options available to them are in person, by mail,

telephone, or paid telegram.. Additionally, they can't contact you

before 8:00am or after 9:00pm unless you have specifically

agreed to this; to do otherwise is considered contact at an

unreasonable time. They also cannot contact you at work if they

know your employer disapproves, and can only contact you one

time a week at work in any case. Finally, they are required to

stop contacting you if you write a letter to the collection agency

telling them to stop. Of course, this does not mean your debt

cannot be collected; it does mean, however, that they are only

allowed to contact you after receipt of the letter to assure you

that there will be no further contact. The only caveat to this rule

is if the debt collector or creditor intends to take some specific

action against you; the collector will then notify you of the action

that they intend to take.

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Contrary to popular belief, debt collectors are allowed to

contact other people regarding your debt. There are specific

rules regarding who they can contact, what they are allowed to

divulge, and how often they can contact these people. If you

have an attorney, often the collector may contact your attorney,

a practice which is within his or her legal rights. Collectors are

also permitted to contact other people, such as your friends,

acquaintances, coworkers, or other individuals they believe have

ties to you. However, they are typically only allowed to contact

these third parties once, and they have no legal weight to throw

at your friends or coworkers if they simply refuse to talk to the

collector. Additionally, a collector can only reveal to you or your

attorney that you owe a debt. They cannot tell your friends or

family members about your debt.

Once a collector has contacted you, he or she must

send you a notice within five days stating the amount of your

debt, the creditor to whom you owe the debt, and actions you

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can take if you believe the debt is not yours. These actions could

include sending a copy of the paid invoice to the collector or

contacting the creditor directly. Sending a letter directly to the

collection agency informing them that you do not owe the

creditor money is often the easiest way; the collection agency

may not contact you if you have sent it to them within thirty days

of first contact. However, if they can acquire and forward to you

proof of the debt (such as an unpaid invoice) they are legally

able to resume contact with you—as long as they can prove that

you owe the debt on the invoice.

For the duration of the collection agency's contact with

you, any debt collector who speaks with you is expressly

forbidden from using certain tactics in an attempt to collect your

debt. These tactics, briefly, are harassment, false statements,

and unfair practices.

Harassment from a debt collector is exactly what it

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sounds like: using the phone, mail, or even your front door to

pester and harass you far beyond the necessary contact they

must make to fulfill their job responsibilities. One example of this

would be calling you at two in the morning, talking to anybody

else about your debt (excluding a husband or wife) or repeatedly

calling you simply to annoy you. They also cannot advertise your

debts in an attempt to embarrass you; they may supply your

name or a list of unpaid debtors to credit bureaus, but they may

not publish it (or any of your personal information) in any public

venues, such as a newspaper or television commercial. Threats,

violence, or harm against the debtor's person, property, or

reputation are also illegal; if a debt collector threatens you or

crosses the threshold of your door to stand in your face, do not

hesitate to involve the law! Not only is this harassment under the

Fair Debt Collection Practices Act, but it could also be grounds

for a civil trial. Call your local Attorney General's office to stop

these damaging practices, or sue them and acquire damages.

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Later on we'll discuss grounds for civil suits and the damages

you can collect.

False statements from a debt collector encompass a

veritable smorgasbord of misrepresentations or untruths the

collector is forbidden from using in order to collect your debt. For

instance, a debt collector is not allowed to represent themselves

as someone they're not, such as a credit bureau, government

official, or attorney (unless the collector is an attorney that

regularly collects debts). They also cannot misrepresent the

involvement of the law in collecting your debt. Statements such

as the ones below are examples of false statements under the

Fair Debt Collection Practices Act:

− Statements that an attorney is involved in collecting

a debt, when in fact one is not;

− Telling you that papers sent to you are legal forms

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when they are not, or vice versa;

− Misrepresenting themselves as a friend or relative in

order to find you;

− Saying you will be arrested if you do not pay your

debt;

− Telling you they will seize, garnish, attach, or sell

your property and/or wages (unless the agency or

the creditor intends to do so and the action is legally

available to them—and they plan to do it in a

reasonable time frame);

− Informing you that they intend to take action against

you, such as a lawsuit (unless the agency or the

creditor intends to do so and the action is legally

available to them).

Finally, false statements stretch to include the possibility

of the debt collector using a false name as he or she attempts to

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collect the debt from you, or lying about the amount of the debt

that you owe. They are also not allowed to falsify information

about themselves or about you when contacting third parties.

Unfair practices debt collectors are forbidden from using

are often more insidious than the prior two categories of barred

practices. Unfair practices include forcing you to accept (and pay

for) collect calls or telegrams, contacting you by postcard,

prematurely depositing a post-dated check, or applying any

check you mail them to a different debt. If you owe more than

one debt, a collector must apply the payment you send to the

debt you have indicated, and they are never allowed to apply

your payment to any debt that you believe isn't yours.

If you believe a debt collector has violated the law, do

not hesitate to take action! You have the right to bring a lawsuit

against a collector within one year after the alleged violation. If

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you win, you may be entitled to recover money for the damages

you've suffered, as well as recoup your court costs and

attorney's fees. A group of people may also sue a collector and

recover money for damages up to five hundred dollars or one

percent of the collector's net worth, whichever is less.

Also, you can report any problems you encounter with a

debt collector to your state Attorney General's office and to the

Federal Trade Commission. Also check with your state; many

states have their own credit collection laws. Your state's Attorney

General can help you determine what your rights are in any

given situation and advise you on actions to take.

Finally, if you have any questions about the Fair Debt

Collection Practices Act or your rights under the act, contact the

Federal Trade Commission. (You can find their address at the

back of this booklet.) The Federal Trade Commission generally

cannot intervene in specific disputes, but your letter may indicate

a pattern of violations with a specific collection agency that

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requires investigation.

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Chapter Eight

Lawsuits

They can't handle the truth.

If all else has failed—the disputes, the calls, the

negotiations—small-claims court may be your best bet. Some of

you may be developing heartburn at the very thought of legal

action. Relax! It isn't the hassle you may expect. Cases are won

and lost through preparation—and federal law, combined with

our handy guide, will make preparing your case as easy as

looking up the specific violation, organizing your records, and

collecting the money. You have the potential to earn a quick

$1000 if you sue for any one of these violations, and chances

are good the agency you are dealing with will settle out of court;

most keep a cash reserve on file for "cost of doing business."

The case is yours to win, so make it happen!

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Bring the lawsuit against...

Sue them for... Cite this as precedent...

Expect to receive...

Creditors if they report your credit history inaccurately

Defamation, financial injury

US Court of Appeals, Ninth Circuit, No. 00-15946, Nelson v. Chase Manhattan

Extent of damages incurred by the wronged party as deemed by the courts

Creditors if you dispute a debt, and they fail to report it as disputed to the credit bureaus

Protection under the FCRA

FCRA § 623

$1,000

Creditors if they pull your credit file without permissible purpose

Injury to your credit report and credit score

FCRA §604 (A)(3) $1,000

Credit bureaus if they refuse to correct information after being provided proof that the dispute is valid

Defamation, willful injury

FCRA §623

Cushman v. Trans Union Corporation, US Court of Appeals for the Third Circuit Court Case 115 F.3d 220 June 9, 1997, Filed (D.C. No. 95-cv-01743).

Extent of damages incurred by the wronged party, as deemed by the courts

Credit bureaus if they fail to respond

Consumer protection

FCRA §611 (a) (1)

$1,000

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to your written disputes within thirty days, unless they received information from the creditor within the first thirty days (a fifteen-day extension is granted in this case)

afforded by the FCRA

Collection agencies if they claim to be both purchaser and assignee

Protection under the FDCPA

Gearing v. Check Brokerage Corp 233 F.3d 469 (7th Cir. 2000)

$1,000

Collection agencies if they misrepresent themselves or the debt to you

Protection under the FDCPA

Gearing v. Check Brokerage Corp Cacace v. Lucas, 775 F. Supp. 502, 505 (D. Conn. 1990)

$1,000

Creditors, collection agencies, or credit bureaus who engage in the practice of re-aging, or updating the date of activity on your account in an attempt to keep negative credit information in your file

Consumer protection afforded by the FCRA

FCRA §605 (c) $1,000

Collection agencies if they fail to report a dispute on a debt

Protection under the FDCPA

FDCPA §807 $1,000

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to the credit bureaus

Collection agencies if they continue to attempt to collect on a disputed debt without having validated the debt

Consumer protection afforded by the FDCPA

FDCPA §809 (b)

FTC opinion letter Cass from LeFevre

$1,000

Collection agencies if they continue to contact you after you have filed a cease and desist letter

Consumer protection afforded by the FDCPA

FDCPA §805 (c) $1,000

Collection agencies if they continue to report a disputed debt to the credit bureaus without having validated the debt

Consumer protection afforded by the FDCPA

FDCPA §809 (b)

FTC opinion letter:Cass from LeFevre

$1,000

Collection agencies if they: - Cash a post-dated check before the date on the check - Cost you money by making you accept collect calls or COD mail - Take or threaten to take any personal property without a judgment

Consumer protection afforded by the FDCPA

FDCPA §808 $1,000

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Collection agencies if they call you between the hours of 9pm-8am

Consumer protection afforded by the FDCPA

FDCPA §805 (a) (1)

$1,000

Collection agencies if they call you at your place of employment, knowing or having reason to believe that your employer prohibits such contact

Consumer protection afforded by the FDCPA

FDCPA §805 (a) (3)

$1,000

Collection agencies if they discuss your debt with any third party

Consumer protection afforded by the FDCPA

FDCPA §805 (b) $1,000

Collection agencies if they resort to harassment or threats

Consumer protection afforded by the FDCPA

FDCPA §806 $1,000

Collection agencies if they threaten to seize your property, garnish your wages, or have you arrested

Consumer protection afforded by the FDCPA

FDCPA §807 $1,000

Collector must contact you in a county in which you lived when you signed the original

Consumer protection afforded by the FDCPA

FDCPA §811 (a) (2)

$1,000

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contract for the debt or where you live at the time when they file the lawsuit

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Appendix

1. Fair Credit Reporting Act 2. Fair Debt Collection Practices Act 3. Addresses and Telephone Numbers

a) Credit Bureaus b) Federal Trade Commission offices

4. Primary and Secondary Bureaus by State 5. Useful Forms

a) The Rating System b) Request to Purchase Credit Report c) Request for Free Credit Report d) Investigation into Inaccuracies 1 e) Investigation into Inaccuracies 2 f) Request Removal of Old Entries g) Follow-up on Old Investigation h) Second Follow-up on Old Investigation i) Request for Removal of Duplicate Entries j) Request for Information Regarding Credit Denial k) Request to Creditor to Remove Harmful Information l) Request for Removal of Debt Counseling Record m) Request to Separate Spousal Credit Reports

n) Notice to Cease and Desist Communication by Phone

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o) Request to Validate Trade Line Notations p) Request to Add Positive Credit Information q) Request to Include 100-Word Statement r) Monthly Income Statement

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Fair Credit Reporting Act

Table of Contents § 601 Short title § 602 Congressional findings and statement of purpose § 603 Definitions; rules of construction § 604 Permissible purposes of consumer reports § 605 Requirements relating to information contained in consumer reports § 606 Disclosure of investigative consumer reports § 607 Compliance procedures § 608 Disclosures to governmental agencies § 609 Disclosures to consumers § 610 Conditions and form of disclosure to consumers § 611 Procedure in case of disputed accuracy § 612 Charges for certain disclosures § 613 Public record information for employment purposes § 614 Restrictions on investigative consumer reports § 615 Requirements on users of consumer reports § 616 Civil liability for willful noncompliance § 617 Civil liability for negligent noncompliance § 618 Jurisdiction of courts; limitation of actions § 619 Obtaining information under false pretenses § 620 Unauthorized disclosures by officers or employees § 621 Administrative enforcement § 622 Information on overdue child support obligations § 623 Responsibilities of furnishers of information to consumer reporting agencies § 624 Relation to State laws § 625 Disclosures to FBI for counterintelligence purposes

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§ 601. Short title This title may be cited as the Fair Credit Reporting Act. § 602. Congressional findings and statement of purpose [15 U.S.C. § 1681] (a) Accuracy and fairness of credit reporting. The Congress makes the following findings:

(1) The banking system is dependent upon fair and accurate credit reporting. Inaccurate credit reports directly impair the efficiency of the banking system, and unfair credit reporting methods undermine the public confidence which is essential to the continued functioning of the banking system. (2) An elaborate mechanism has been developed for investigating and evaluating the credit worthiness, credit standing, credit capacity, character, and general reputation of consumers.

(3) Consumer reporting agencies have assumed a vital role in assembling and evaluating consumer credit and other information on consumers.

(4) There is a need to insure that consumer reporting agencies exercise their grave responsibilities with fairness, impartiality, and a respect for the consumer's right to privacy.

(b) Reasonable procedures. It is the purpose of this title to require that consumer reporting agencies adopt reasonable procedures for meeting the needs of commerce for consumer credit, personnel, insurance, and other information in a manner which is fair and equitable to the consumer, with regard to the

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confidentiality, accuracy, relevancy, and proper utilization of such information in accordance with the requirements of this title. § 603. Definitions; rules of construction [15 U.S.C. § 1681a] (a) Definitions and rules of construction set forth in this section are applicable for the purposes of this title. (b) The term "person" means any individual, partnership, corporation, trust, estate, cooperative, association, government or governmental subdivision or agency, or other entity. (c) The term "consumer" means an individual. (d) Consumer report.

(1) In general. The term "consumer report" means any written, oral, or other communication of any information by a consumer reporting agency bearing on a consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living which is used or expected to be used or collected in whole or in part for the purpose of serving as a factor in establishing the consumer's eligibility for

(A) credit or insurance to be used primarily for personal, family, or household purposes;

(B) employment purposes; or

(C) any other purpose authorized under section 604 [§ 1681b].

(2) Exclusions. The term "consumer report" does not include

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(A) any

(i) report containing information solely as to transactions or experiences between the consumer and the person making the report;

(ii) communication of that information among persons related by common ownership or affiliated by corporate control; or

(iii) communication of other information among persons related by common ownership or affiliated by corporate control, if it is clearly and conspicuously disclosed to the consumer that the information may be communicated among such persons and the consumer is given the opportunity, before the time that the information is initially communicated, to direct that such information not be communicated among such persons;

(B) any authorization or approval of a specific extension of credit directly or indirectly by the issuer of a credit card or similar device;

(C) any report in which a person who has been requested by a third party to make a specific extension of credit directly or

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indirectly to a consumer conveys his or her decision with respect to such request, if the third party advises the consumer of the name and address of the person to whom the request was made, and such person makes the disclosures to the consumer required under section 615 [§ 1681m]; or

(D) a communication described in subsection (o).

(e) The term "investigative consumer report" means a consumer report or portion thereof in which information on a consumer's character, general reputation, personal characteristics, or mode of living is obtained through personal interviews with neighbors, friends, or associates of the consumer reported on or with others with whom he is acquainted or who may have knowledge concerning any such items of information. However, such information shall not include specific factual information on a consumer's credit record obtained directly from a creditor of the consumer or from a consumer reporting agency when such information was obtained directly from a creditor of the consumer or from the consumer. (f) The term "consumer reporting agency" means any person which, for monetary fees, dues, or on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of assembling or evaluating consumer credit information or other information on consumers for the purpose of furnishing consumer reports to third parties, and which uses any means or facility of interstate commerce for the purpose of preparing or furnishing consumer reports. (g) The term "file," when used in connection with information on any consumer, means all of the information on that consumer

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recorded and retained by a consumer reporting agency regardless of how the information is stored. (h) The term "employment purposes" when used in connection with a consumer report means a report used for the purpose of evaluating a consumer for employment, promotion, reassignment or retention as an employee. (i) The term "medical information" means information or records obtained, with the consent of the individual to whom it relates, from licensed physicians or medical practitioners, hospitals, clinics, or other medical or medically related facilities. (j) Definitions relating to child support obligations.

(1) Overdue support. The term "overdue support" has the meaning given to such term in section 666(e) of title 42 [Social Security Act, 42 U.S.C. § 666(e)].

(2) State or local child support enforcement agency. The term "State or local child support enforcement agency" means a State or local agency which administers a State or local program for establishing and enforcing child support obligations.

(k) Adverse action. (1) Actions included. The term "adverse action"

(A) has the same meaning as in section 701(d)(6) of the Equal Credit Opportunity Act; and

(B) means

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(i) a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance;

(ii) a denial of employment or any other decision for employment purposes that adversely affects any current or prospective employee;

(iii) a denial or cancellation of, an increase in any charge for, or any other adverse or unfavorable change in the terms of, any license or benefit described in section 604(a)(3)(D) [§ 1681b]; and

(iv) an action taken or determination that is

(I) made in connection with an application that was made by, or a transaction that was initiated by, any consumer, or in connection with a review of an account under

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section 604(a)(3)(F)(ii)[§ 1681b]; and

(II) adverse to the interests of the consumer.

(2) Applicable findings, decisions, commentary, and orders. For purposes of any determination of whether an action is an adverse action under paragraph (1)(A), all appropriate final findings, decisions, commentary, and orders issued under section 701(d)(6) of the Equal Credit Opportunity Act by the Board of Governors of the Federal Reserve System or any court shall apply.

(l) Firm offer of credit or insurance. The term "firm offer of credit or insurance" means any offer of credit or insurance to a consumer that will be honored if the consumer is determined, based on information in a consumer report on the consumer, to meet the specific criteria used to select the consumer for the offer, except that the offer may be further conditioned on one or more of the following:

(1) The consumer being determined, based on information in the consumer's application for the credit or insurance, to meet specific criteria bearing on credit worthiness or insurability, as applicable, that are established

(A) before selection of the consumer for the offer; and

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(B) for the purpose of determining whether to extend credit or insurance pursuant to the offer.

(2) Verification

(A) that the consumer continues to meet the specific criteria used to select the consumer for the offer, by using information in a consumer report on the consumer, information in the consumer's application for the credit or insurance, or other information bearing on the credit worthiness or insurability of the consumer; or

(B) of the information in the consumer's application for the credit or insurance, to determine that the consumer meets the specific criteria bearing on credit worthiness or insurability.

(3) The consumer furnishing any collateral that is a requirement for the extension of the credit or insurance that was

(A) established before selection of the consumer for the offer of credit or insurance; and

(B) disclosed to the consumer in the offer of credit or insurance.

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(m) Credit or insurance transaction that is not initiated by the consumer. The term "credit or insurance transaction that is not initiated by the consumer" does not include the use of a consumer report by a person with which the consumer has an account or insurance policy, for purposes of

(1) reviewing the account or insurance policy; or

(2) collecting the account.

(n) State. The term "State" means any State, the Commonwealth of Puerto Rico, the District of Columbia, and any territory or possession of the United States. (o) Excluded communications. A communication is described in this subsection if it is a communication

(1) that, but for subsection (d)(2)(D), would be an investigative consumer report;

(2) that is made to a prospective employer for the purpose of

(A) procuring an employee for the employer; or

(B) procuring an opportunity for a natural person to work for the employer;

(3) that is made by a person who regularly performs such procurement;

(4) that is not used by any person for any purpose other than a purpose described in subparagraph (A) or (B) of paragraph (2); and

(5) with respect to which

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(A) the consumer who is the subject of the communication

(i) consents orally or in writing to the nature and scope of the communication, before the collection of any information for the purpose of making the communication;

(ii) consents orally or in writing to the making of the communication to a prospective employer, before the making of the communication; and

(iii) in the case of consent under clause (i) or (ii) given orally, is provided written confirmation of that consent by the person making the communication, not later than 3 business days after the receipt of the consent by that person;

(B) the person who makes the communication does not, for the purpose of making the communication, make any inquiry that if made by a prospective employer of the consumer who is the subject of the communication would violate any applicable Federal or State equal employment opportunity law or regulation; and

(C) the person who makes the communication

(i) discloses in writing to the consumer who is the subject of the

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communication, not later than 5 business days after receiving any request from the consumer for such disclosure, the nature and substance of all information in the consumer's file at the time of the request, except that the sources of any information that is acquired solely for use in making the communication and is actually used for no other purpose, need not be disclosed other than under appropriate discovery procedures in any court of competent jurisdiction in which an action is brought; and

(ii) notifies the consumer who is the subject of the communication, in writing, of the consumer's right to request the information described in clause (i).

(p) Consumer reporting agency that compiles and maintains files on consumers on a nationwide basis. The term "consumer reporting agency that compiles and maintains files on consumers on a nationwide basis" means a consumer reporting agency that regularly engages in the practice of assembling or evaluating, and maintaining, for the purpose of furnishing consumer reports to third parties bearing on a consumer's credit worthiness, credit standing, or credit capacity, each of the following regarding consumers residing nationwide:

(1) Public record information.

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(2) Credit account information from persons who furnish that information regularly and in the ordinary course of business.

§ 604. Permissible purposes of consumer reports [15 U.S.C. § 1681b] (a) In general. Subject to subsection (c), any consumer reporting agency may furnish a consumer report under the following circumstances and no other:

(1) In response to the order of a court having jurisdiction to issue such an order, or a subpoena issued in connection with proceedings before a Federal grand jury.

(2) In accordance with the written instructions of the consumer to whom it relates.

(3) To a person which it has reason to believe

(A) intends to use the information in connection with a credit transaction involving the consumer on whom the information is to be furnished and involving the extension of credit to, or review or collection of an account of, the consumer; or

(B) intends to use the information for employment purposes; or

(C) intends to use the information in connection with the underwriting of insurance involving the consumer; or

(D) intends to use the information in connection with a determination of the consumer's eligibility for

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a license or other benefit granted by a governmental instrumentality required by law to consider an applicant's financial responsibility or status; or

(E) intends to use the information, as a potential investor or servicer, or current insurer, in connection with a valuation of, or an assessment of the credit or prepayment risks associated with, an existing credit obligation; or

(F) otherwise has a legitimate business need for the information

(i) in connection with a business transaction that is initiated by the consumer; or

(ii) to review an account to determine whether the consumer continues to meet the terms of the account.

(4) In response to a request by the head of a State or local child support enforcement agency (or a State or local government official authorized by the head of such an agency), if the person making the request certifies to the consumer reporting agency that

(A) the consumer report is needed for the purpose of establishing an individual's capacity to make child support payments or determining the appropriate level of such payments;

(B) the paternity of the consumer for the child to which the obligation relates has been established

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or acknowledged by the consumer in accordance with State laws under which the obligation arises (if required by those laws);

(C) the person has provided at least 10 days' prior notice to the consumer whose report is requested, by certified or registered mail to the last known address of the consumer, that the report will be requested; and

(D) the consumer report will be kept confidential, will be used solely for a purpose described in subparagraph (A), and will not be used in connection with any other civil, administrative, or criminal proceeding, or for any other purpose.

(5) To an agency administering a State plan under Section 454 of the Social Security Act (42 U.S.C. § 654) for use to set an initial or modified child support award.

(b) Conditions for furnishing and using consumer reports for employment purposes.

(1) Certification from user. A consumer reporting agency may furnish a consumer report for employment purposes only if

(A) the person who obtains such report from the agency certifies to the agency that

(i) the person has complied with paragraph (2) with respect to the consumer report, and the person will

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comply with paragraph (3) with respect to the consumer report if paragraph (3) becomes applicable; and

(ii) information from the consumer report will not be used in violation of any applicable Federal or State equal employment opportunity law or regulation; and

(B) the consumer reporting agency provides with the report, or has previously provided, a summary of the consumer's rights under this title, as prescribed by the Federal Trade Commission under section 609(c)(3) [§ 1681g].

(2) Disclosure to consumer.

(A) In general. Except as provided in subparagraph (B), a person may not procure a consumer report, or cause a consumer report to be procured, for employment purposes with respect to any consumer, unless--

(i) a clear and conspicuous disclosure has been made in writing to the consumer at any time before the report is procured or caused to be procured, in a document that consists solely of the disclosure, that a consumer report may be obtained for employment purposes; and

(ii) the consumer has authorized in writing (which authorization may be made on the

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document referred to in clause (i)) the procurement of the report by that person.

(B) Application by mail, telephone, computer, or other similar means. If a consumer described in subparagraph (C) applies for employment by mail, telephone, computer, or other similar means, at any time before a consumer report is procured or caused to be procured in connection with that application--

(i) the person who procures the consumer report on the consumer for employment purposes shall provide to the consumer, by oral, written, or electronic means, notice that a consumer report may be obtained for employment purposes, and a summary of the consumer's rights under section 615(a)(3); and

(ii) the consumer shall have consented, orally, in writing, or electronically to the procurement of the report by that person.

(C) Scope. Subparagraph (B) shall apply to a person procuring a consumer report on a consumer in connection with the consumer's application for employment only if--

(i) the consumer is applying for a position over which the Secretary of Transportation has the power to establish qualifications and maximum hours of service pursuant to the provisions of section 31502 of title 49, or a

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position subject to safety regulation by a State transportation agency; and

(ii) as of the time at which the person procures the report or causes the report to be procured the only interaction between the consumer and the person in connection with that employment application has been by mail, telephone, computer, or other similar means.

(3) Conditions on use for adverse actions.

(A) In general. Except as provided in subparagraph (B), in using a consumer report for employment purposes, before taking any adverse action based in whole or in part on the report, the person intending to take such adverse action shall provide to the consumer to whom the report relates--

(i) a copy of the report; and

(ii) a description in writing of the rights of the consumer under this title, as prescribed by the Federal Trade Commission under section 609(c)(3).

(B) Application by mail, telephone, computer, or other similar means.

(i) If a consumer described in subparagraph (C) applies for employment by mail, telephone,

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computer, or other similar means, and if a person who has procured a consumer report on the consumer for employment purposes takes adverse action on the employment application based in whole or in part on the report, then the person must provide to the consumer to whom the report relates, in lieu of the notices required under subparagraph (A) of this section and under section 615(a), within 3 business days of taking such action, an oral, written or electronic notification--

(I) that adverse action has been taken based in whole or in part on a consumer report received from a consumer reporting agency;

(II) of the name, address and telephone number of the consumer reporting agency that furnished the consumer report (including a toll-free telephone number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis);

(III) that the consumer reporting agency did not make the

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decision to take the adverse action and is unable to provide to the consumer the specific reasons why the adverse action was taken; and

(IV) that the consumer may, upon providing proper identification, request a free copy of a report and may dispute with the consumer reporting agency the accuracy or completeness of any information in a report.

(ii) If, under clause (B)(i)(IV), the consumer requests a copy of a consumer report from the person who procured the report, then, within 3 business days of receiving the consumer's request, together with proper identification, the person must send or provide to the consumer a copy of a report and a copy of the consumer's rights as prescribed by the Federal Trade Commission under section 609(c)(3).

(C) Scope. Subparagraph (B) shall apply to a person procuring a consumer report on a consumer in connection with the consumer's application for employment only if--

(i) the consumer is applying for a position over which the Secretary of Transportation has the power to establish qualifications and maximum hours of service pursuant to the

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provisions of section 31502 of title 49, or a position subject to safety regulation by a State transportation agency; and

(ii) as of the time at which the person procures the report or causes the report to be procured the only interaction between the consumer and the person in connection with that employment application has been by mail, telephone, computer, or other similar means.

(4) Exception for national security investigations.

(A) In general. In the case of an agency or department of the United States Government which seeks to obtain and use a consumer report for employment purposes, paragraph (3) shall not apply to any adverse action by such agency or department which is based in part on such consumer report, if the head of such agency or department makes a written finding that--

(i) the consumer report is relevant to a national security investigation of such agency or department;

(ii) the investigation is within the jurisdiction of such agency or department;

(iii) there is reason to believe that compliance with paragraph (3) will--

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(I) endanger the life or physical safety of any person;

(II) result in flight from prosecution;

(III) result in the destruction of, or tampering with, evidence relevant to the investigation;

(IV) result in the intimidation of a potential witness relevant to the investigation;

(V) result in the compromise of classified information; or

(VI) otherwise seriously jeopardize or unduly delay the investigation or another official proceeding.

(B) Notification of consumer upon conclusion of investigation. Upon the conclusion of a national security investigation described in subparagraph (A), or upon the determination that the exception under subparagraph (A) is no longer required for the reasons set forth in such subparagraph, the official exercising the authority in such subparagraph shall provide to the consumer who is the subject of the consumer report with regard to which such finding was made--

(i) a copy of such consumer report with any classified information redacted as necessary;

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(ii) notice of any adverse action which is based, in part, on the consumer report; and

(iii) the identification with reasonable specificity of the nature of the investigation for which the consumer report was sought.

(C) Delegation by head of agency or department. For purposes of subparagraphs (A) and (B), the head of any agency or department of the United States Government may delegate his or her authorities under this paragraph to an official of such agency or department who has personnel security responsibilities and is a member of the Senior Executive Service or equivalent civilian or military rank.

(D) Report to the congress. Not later than January 31 of each year, the head of each agency and department of the United States Government that exercised authority under this paragraph during the preceding year shall submit a report to the Congress on the number of times the department or agency exercised such authority during the year.

(E) Definitions. For purposes of this paragraph, the following definitions shall apply:

(i) Classified information. The term `classified information' means information that is protected from unauthorized disclosure under Executive Order No. 12958 or successor orders.

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(ii) National security investigation. The term 'national security investigation' means any official inquiry by an agency or department of the United States Government to determine the eligibility of a consumer to receive access or continued access to classified information or to determine whether classified information has been lost or compromised.

(c) Furnishing reports in connection with credit or insurance transactions that are not initiated by the consumer.

(1) In general. A consumer reporting agency may furnish a consumer report relating to any consumer pursuant to subparagraph (A) or (C) of subsection (a)(3) in connection with any credit or insurance transaction that is not initiated by the consumer only if

(A) the consumer authorizes the agency to provide such report to such person; or

(B) (i) the transaction consists of a firm offer of credit or insurance;

(ii) the consumer reporting agency has complied with subsection (e); and

(iii) there is not in effect an election by the consumer, made in accordance with subsection (e), to have the consumer's name and address excluded from lists of names

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provided by the agency pursuant to this paragraph.

(2) Limits on information received under paragraph (1)(B). A person may receive pursuant to paragraph (1)(B) only

(A) the name and address of a consumer;

(B) an identifier that is not unique to the consumer and that is used by the person solely for the purpose of verifying the identity of the consumer; and

(C) other information pertaining to a consumer that does not identify the relationship or experience of the consumer with respect to a particular creditor or other entity.

(3) Information regarding inquiries. Except as provided in section 609(a)(5) [§ 1681g], a consumer reporting agency shall not furnish to any person a record of inquiries in connection with a credit or insurance transaction that is not initiated by a consumer.

(d) Reserved. (e) Election of consumer to be excluded from lists.

(1) In general. A consumer may elect to have the consumer's name and address excluded from any list provided by a consumer reporting agency under subsection (c)(1)(B) in connection with a credit or insurance transaction that is not initiated by the consumer, by notifying the agency in accordance with paragraph (2) that the consumer does not consent to any use of a

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consumer report relating to the consumer in connection with any credit or insurance transaction that is not initiated by the consumer.

(2) Manner of notification. A consumer shall notify a consumer reporting agency under paragraph (1)

(A) through the notification system maintained by the agency under paragraph (5); or

(B) by submitting to the agency a signed notice of election form issued by the agency for purposes of this subparagraph.

(3) Response of agency after notification through system. Upon receipt of notification of the election of a consumer under paragraph (1) through the notification system maintained by the agency under paragraph (5), a consumer reporting agency shall

(A) inform the consumer that the election is effective only for the 2-year period following the election if the consumer does not submit to the agency a signed notice of election form issued by the agency for purposes of paragraph (2)(B); and

(B) provide to the consumer a notice of election form, if requested by the consumer, not later than 5 business days after receipt of the notification of the election through the system established under paragraph (5), in the case of a request made at the time the consumer provides notification through the system.

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(4) Effectiveness of election. An election of a consumer under paragraph (1)

(A) shall be effective with respect to a consumer reporting agency beginning 5 business days after the date on which the consumer notifies the agency in accordance with paragraph (2);

(B) shall be effective with respect to a consumer reporting agency

(i) subject to subparagraph (C), during the 2-year period beginning 5 business days after the date on which the consumer notifies the agency of the election, in the case of an election for which a consumer notifies the agency only in accordance with paragraph (2)(A); or

(ii) until the consumer notifies the agency under subparagraph (C), in the case of an election for which a consumer notifies the agency in accordance with paragraph (2)(B);

(C) shall not be effective after the date on which the consumer notifies the agency, through the notification system established by the agency under paragraph (5), that the election is no longer effective; and

(D) shall be effective with respect to each affiliate of the agency.

(5) Notification system.

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(A) In general. Each consumer reporting agency that, under subsection (c)(1)(B), furnishes a consumer report in connection with a credit or insurance transaction that is not initiated by a consumer, shall

(i) establish and maintain a notification system, including a toll-free telephone number, which permits any consumer whose consumer report is maintained by the agency to notify the agency, with appropriate identification, of the consumer's election to have the consumer's name and address excluded from any such list of names and addresses provided by the agency for such a transaction; and

(ii) publish by not later than 365 days after the date of enactment of the Consumer Credit Reporting Reform Act of 1996, and not less than annually thereafter, in a publication of general circulation in the area served by the agency

(I) a notification that information in consumer files maintained by the agency may be used in connection with such transactions; and

(II) the address and toll-free telephone number for consumers to use to notify the agency of the consumer's election under clause (I).

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(B) Establishment and maintenance as compliance. Establishment and maintenance of a notification system (including a toll-free telephone number) and publication by a consumer reporting agency on the agency's own behalf and on behalf of any of its affiliates in accordance with this paragraph is deemed to be compliance with this paragraph by each of those affiliates.

(6) Notification system by agencies that operate nationwide. Each consumer reporting agency that compiles and maintains files on consumers on a nationwide basis shall establish and maintain a notification system for purposes of paragraph (5) jointly with other such consumer reporting agencies.

(f) Certain use or obtaining of information prohibited. A person shall not use or obtain a consumer report for any purpose unless

(1) the consumer report is obtained for a purpose for which the consumer report is authorized to be furnished under this section; and

(2) the purpose is certified in accordance with section 607 [§ 1681e] by a prospective user of the report through a general or specific certification.

(g) Furnishing reports containing medical information. A consumer reporting agency shall not furnish for employment purposes, or in connection with a credit or insurance transaction, a consumer report that contains medical information about a consumer, unless the consumer consents to the furnishing of the report.

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§ 605. Requirements relating to information contained in consumer reports [15 U.S.C. § 1681c] (a) Information excluded from consumer reports. Except as authorized under subsection (b) of this section, no consumer reporting agency may make any consumer report containing any of the following items of information:

(1) Cases under title 11 [United States Code] or under the Bankruptcy Act that, from the date of entry of the order for relief or the date of adjudication, as the case may be, antedate the report by more than 10 years.

(2) Civil suits, civil judgments, and records of arrest that from date of entry, antedate the report by more than seven years or until the governing statute of limitations has expired, whichever is the longer period.

(3) Paid tax liens which, from date of payment, antedate the report by more than seven years.

(4) Accounts placed for collection or charged to profit and loss which antedate the report by more than seven years.(1)

(5) Any other adverse item of information, other than records of convictions of crimes which antedates the report by more than seven years.1

(b) Exempted cases. The provisions of subsection (a) of this section are not applicable in the case of any consumer credit report to be used in connection with

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(1) a credit transaction involving, or which may reasonably be expected to involve, a principal amount of $150,000 or more;

(2) the underwriting of life insurance involving, or which may reasonably be expected to involve, a face amount of $150,000 or more; or

(3) the employment of any individual at an annual salary which equals, or which may reasonably be expected to equal $75,000, or more.

(c) Running of reporting period. (1) In general. The 7-year period referred to in paragraphs (4) and (6) ** of subsection (a) shall begin, with respect to any delinquent account that is placed for collection (internally or by referral to a third party, whichever is earlier), charged to profit and loss, or subjected to any similar action, upon the expiration of the 180-day period beginning on the date of the commencement of the delinquency which immediately preceded the collection activity, charge to profit and loss, or similar action.

(2) Effective date. Paragraph (1) shall apply only to items of information added to the file of a consumer on or after the date that is 455 days after the date of enactment of the Consumer Credit Reporting Reform Act of 1996.

(d) Information required to be disclosed. Any consumer reporting agency that furnishes a consumer report that contains information regarding any case involving the consumer that arises under title 11, United States Code, shall include in the report an identification of the chapter of such title 11 under which

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such case arises if provided by the source of the information. If any case arising or filed under title 11, United States Code, is withdrawn by the consumer before a final judgment, the consumer reporting agency shall include in the report that such case or filing was withdrawn upon receipt of documentation certifying such withdrawal. (e) Indication of closure of account by consumer. If a consumer reporting agency is notified pursuant to section 623(a)(4) [§ 1681s-2] that a credit account of a consumer was voluntarily closed by the consumer, the agency shall indicate that fact in any consumer report that includes information related to the account. (f) Indication of dispute by consumer. If a consumer reporting agency is notified pursuant to section 623(a)(3) [§ 1681s-2] that information regarding a consumer who was furnished to the agency is disputed by the consumer, the agency shall indicate that fact in each consumer report that includes the disputed information. § 606. Disclosure of investigative consumer reports [15 U.S.C. § 1681d] (a) Disclosure of fact of preparation. A person may not procure or cause to be prepared an investigative consumer report on any consumer unless

(1) it is clearly and accurately disclosed to the consumer that an investigative consumer report including information as to his character, general reputation, personal characteristics and mode of living, whichever are applicable, may be made, and such disclosure

(A) is made in a writing mailed, or otherwise delivered, to the consumer, not later than three

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days after the date on which the report was first requested, and

(B) includes a statement informing the consumer of his right to request the additional disclosures provided for under subsection (b) of this section and the written summary of the rights of the consumer prepared pursuant to section 609(c) [§ 1681g]; and

(2) the person certifies or has certified to the consumer reporting agency that

(A) the person has made the disclosures to the consumer required by paragraph (1); and

(B) the person will comply with subsection (b).

(b) Disclosure on request of nature and scope of investigation. Any person who procures or causes to be prepared an investigative consumer report on any consumer shall, upon written request made by the consumer within a reasonable period of time after the receipt by him of the disclosure required by subsection (a)(1) of this section, make a complete and accurate disclosure of the nature and scope of the investigation requested. This disclosure shall be made in a writing mailed, or otherwise delivered, to the consumer not later than five days after the date on which the request for such disclosure was received from the consumer or such report was first requested, whichever is the later. (c) Limitation on liability upon showing of reasonable procedures for compliance with provisions. No person may be held liable for any violation of subsection (a) or (b) of this section if he shows

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by a preponderance of the evidence that at the time of the violation he maintained reasonable procedures to assure compliance with subsection (a) or (b) of this section. (d) Prohibitions.

(1) Certification. A consumer reporting agency shall not prepare or furnish investigative consumer report unless the agency has received a certification under subsection (a)(2) from the person who requested the report.

(2) Inquiries. A consumer reporting agency shall not make an inquiry for the purpose of preparing an investigative consumer report on a consumer for employment purposes if the making of the inquiry by an employer or prospective employer of the consumer would violate any applicable Federal or State equal employment opportunity law or regulation.

(3) Certain public record information. Except as otherwise provided in section 613 [§ 1681k], a consumer reporting agency shall not furnish an investigative consumer report that includes information that is a matter of public record and that relates to an arrest, indictment, conviction, civil judicial action, tax lien, or outstanding judgment, unless the agency has verified the accuracy of the information during the 30-day period ending on the date on which the report is furnished.

(4) Certain adverse information. A consumer reporting agency shall not prepare or furnish an investigative consumer report on a consumer that contains information that is adverse to the interest of the consumer and that is obtained through a personal interview with a neighbor, friend, or associate of the consumer or with another

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person with whom the consumer is acquainted or who has knowledge of such item of information, unless

(A) the agency has followed reasonable procedures to obtain confirmation of the information, from an additional source that has independent and direct knowledge of the information; or

(B) the person interviewed is the best possible source of the information.

§ 607. Compliance procedures [15 U.S.C. § 1681e] (a) Identity and purposes of credit users. Every consumer reporting agency shall maintain reasonable procedures designed to avoid violations of section 605 [§ 1681c] and to limit the furnishing of consumer reports to the purposes listed under section 604 [§ 1681b] of this title. These procedures shall require that prospective users of the information identify themselves, certify the purposes for which the information is sought, and certify that the information will be used for no other purpose. Every consumer reporting agency shall make a reasonable effort to verify the identity of a new prospective user and the uses certified by such prospective user prior to furnishing such user a consumer report. No consumer reporting agency may furnish a consumer report to any person if it has reasonable grounds for believing that the consumer report will not be used for a purpose listed in section 604 [§ 1681b] of this title. (b) Accuracy of report. Whenever a consumer reporting agency prepares a consumer report it shall follow reasonable procedures to assure maximum possible accuracy of the information concerning the individual about whom the report relates.

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(c) Disclosure of consumer reports by users allowed. A consumer reporting agency may not prohibit a user of a consumer report furnished by the agency on a consumer from disclosing the contents of the report to the consumer, if adverse action against the consumer has been taken by the user based in whole or in part on the report. (d) Notice to users and furnishers of information.

(1) Notice requirement. A consumer reporting agency shall provide to any person

(A) who regularly and in the ordinary course of business furnishes information to the agency with respect to any consumer; or

(B) to whom a consumer report is provided by the agency;

a notice of such person's responsibilities under this title.

(2) Content of notice. The Federal Trade Commission shall prescribe the content of notices under paragraph (1), and a consumer reporting agency shall be in compliance with this subsection if it provides a notice under paragraph (1) that is substantially similar to the Federal Trade Commission prescription under this paragraph.

(e) Procurement of consumer report for resale. (1) Disclosure. A person may not procure a consumer report for purposes of reselling the report (or any information in the report) unless the person discloses to the consumer reporting agency that originally furnishes the report

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(A) the identity of the end-user of the report (or information); and

(B) each permissible purpose under section 604 [§ 1681b] for which the report is furnished to the end-user of the report (or information).

(2) Responsibilities of procurers for resale. A person who procures a consumer report for purposes of reselling the report (or any information in the report) shall

(A) establish and comply with reasonable procedures designed to ensure that the report (or information) is resold by the person only for a purpose for which the report may be furnished under section 604 [§ 1681b], including by requiring that each person to which the report (or information) is resold and that resells or provides the report (or information) to any other person

(i) identifies each end user of the resold report (or information);

(ii) certifies each purpose for which the report (or information) will be used; and

(iii) certifies that the report (or information) will be used for no other purpose; and

(B) before reselling the report, make reasonable efforts to verify the identifications and certifications made under subparagraph (A).

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(3) Resale of consumer report to a federal agency or department. Notwithstanding paragraph (1) or (2), a person who procures a consumer report for purposes of reselling the report (or any information in the report) shall not disclose the identity of the end-user of the report under paragraph (1) or (2) if --

(A) the end user is an agency or department of the United States Government which procures the report from the person for purposes of determining the eligibility of the consumer concerned to receive access or continued access to classified information (as defined in section 604(b)(4)(E)(i)); and

(B) the agency or department certifies in writing to the person reselling the report that nondisclosure is necessary to protect classified information or the safety of persons employed by or contracting with, or undergoing investigation for work or contracting with the agency or department.

§ 608. Disclosures to governmental agencies [15 U.S.C. § 1681f] Notwithstanding the provisions of section 604 [§ 1681b] of this title, a consumer reporting agency may furnish identifying information respecting any consumer, limited to his name, address, former addresses, places of employment, or former places of employment, to a governmental agency. § 609. Disclosures to consumers [15 U.S.C. § 1681g] (a) Information on file; sources; report recipients. Every consumer reporting agency shall, upon request, and subject to

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610(a)(1) [§ 1681h], clearly and accurately disclose to the consumer:

(1) All information in the consumer's file at the time of the request, except that nothing in this paragraph shall be construed to require a consumer reporting agency to disclose to a consumer any information concerning credit scores or any other risk scores or predictors relating to the consumer.

(2) The sources of the information; except that the sources of information acquired solely for use in preparing an investigative consumer report and actually used for no other purpose need not be disclosed: Provided, That in the event an action is brought under this title, such sources shall be available to the plaintiff under appropriate discovery procedures in the court in which the action is brought.

(3) (A) Identification of each person (including each end-user identified under section 607(e)(1) [§ 1681e]) that procured a consumer report

(i) for employment purposes, during the 2-year period preceding the date on which the request is made; or

(ii) for any other purpose, during the 1-year period preceding the date on which the request is made.

(B) An identification of a person under subparagraph (A) shall include

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(i) the name of the person or, if applicable, the trade name (written in full) under which such person conducts business; and

(ii) upon request of the consumer, the address and telephone number of the person.

(C) Subparagraph (A) does not apply if--

(i) the end user is an agency or department of the United States Government that procures the report from the person for purposes of determining the eligibility of the consumer to whom the report relates to receive access or continued access to classified information (as defined in section 604(b)(4)(E)(i)); and

(ii) the head of the agency or department makes a written finding as prescribed under section 604(b)(4)(A).

(4) The dates, original payees, and amounts of any checks upon which is based any adverse characterization of the consumer, included in the file at the time of the disclosure.

(5) A record of all inquiries received by the agency during the 1-year period preceding the request that identified the consumer in connection with a credit or insurance transaction that was not initiated by the consumer.

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(b) Exempt information. The requirements of subsection (a) of this section respecting the disclosure of sources of information and the recipients of consumer reports do not apply to information received or consumer reports furnished prior to the effective date of this title except to the extent that the matter involved is contained in the files of the consumer reporting agency on that date. (c) Summary of rights required to be included with disclosure.

(1) Summary of rights. A consumer reporting agency shall provide to a consumer, with each written disclosure by the agency to the consumer under this section

(A) a written summary of all of the rights that the consumer has under this title; and

(B) in the case of a consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, a toll-free telephone number established by the agency, at which personnel are accessible to consumers during normal business hours.

(2) Specific items required to be included. The summary of rights required under paragraph (1) shall include

(A) a brief description of this title and all rights of consumers under this title;

(B) an explanation of how the consumer may exercise the rights of the consumer under this title;

(C) a list of all Federal agencies responsible for enforcing any provision of this title and the address

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and any appropriate phone number of each such agency, in a form that will assist the consumer in selecting the appropriate agency;

(D) a statement that the consumer may have additional rights under State law and that the consumer may wish to contact a State or local consumer protection agency or a State attorney general to learn of those rights; and

(E) a statement that a consumer reporting agency is not required to remove accurate derogatory information from a consumer's file, unless the information is outdated under section 605 [§ 1681c] or cannot be verified.

(3) Form of summary of rights. For purposes of this subsection and any disclosure by a consumer reporting agency required under this title with respect to consumers' rights, the Federal Trade Commission (after consultation with each Federal agency referred to in section 621(b) [§ 1681s]) shall prescribe the form and content of any such disclosure of the rights of consumers required under this title. A consumer reporting agency shall be in compliance with this subsection if it provides disclosures under paragraph (1) that are substantially similar to the Federal Trade Commission prescription under this paragraph.

(4) Effectiveness. No disclosures shall be required under this subsection until the date on which the Federal Trade Commission prescribes the form and content of such disclosures under paragraph (3).

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§ 610. Conditions and form of disclosure to consumers [15 U.S.C. § 1681h] (a) In general.

(1) Proper identification. A consumer reporting agency shall require, as a condition of making the disclosures required under section 609 [§ 1681g], that the consumer furnish proper identification.

(2) Disclosure in writing. Except as provided in subsection (b), the disclosures required to be made under section 609 [§ 1681g] shall be provided under that section in writing.

(b) Other forms of disclosure. (1) In general. If authorized by a consumer, a consumer reporting agency may make the disclosures required under 609 [§ 1681g]

(A) other than in writing; and

(B) in such form as may be

(i) specified by the consumer in accordance with paragraph (2); and

(ii) available from the agency.

(2) Form. A consumer may specify pursuant to paragraph (1) that disclosures under section 609 [§ 1681g] shall be made

(A) in person, upon the appearance of the consumer at the place of business of the consumer

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reporting agency where disclosures are regularly provided, during normal business hours, and on reasonable notice;

(B) by telephone, if the consumer has made a written request for disclosure by telephone;

(C) by electronic means, if available from the agency; or

(D) by any other reasonable means that is available from the agency.

(c) Trained personnel. Any consumer reporting agency shall provide trained personnel to explain to the consumer any information furnished to him pursuant to section 609 [§ 1681g] of this title. (d) Persons accompanying consumer. The consumer shall be permitted to be accompanied by one other person of his choosing, who shall furnish reasonable identification. A consumer reporting agency may require the consumer to furnish a written statement granting permission to the consumer reporting agency to discuss the consumer's file in such person's presence. (e) Limitation of liability. Except as provided in sections 616 and 617 [§§ 1681n and 1681o] of this title, no consumer may bring any action or proceeding in the nature of defamation, invasion of privacy, or negligence with respect to the reporting of information against any consumer reporting agency, any user of information, or any person who furnishes information to a consumer reporting agency, based on information disclosed pursuant to section 609, 610, or 615 [§§ 1681g, 1681h, or 1681m] of this title or based on information disclosed by a user of a consumer report to or for a

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consumer against whom the user has taken adverse action, based in whole or in part on the report, except as to false information furnished with malice or willful intent to injure such consumer. § 611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i] (a) Reinvestigations of disputed information.

(1) Reinvestigation required.

(A) In general. If the completeness or accuracy of any item of information contained in a consumer's file at a consumer reporting agency is disputed by the consumer and the consumer notifies the agency directly of such dispute, the agency shall reinvestigate free of charge and record the current status of the disputed information, or delete the item from the file in accordance with paragraph (5), before the end of the 30-day period beginning on the date on which the agency receives the notice of the dispute from the consumer.

(B) Extension of period to reinvestigate. Except as provided in subparagraph (C), the 30-day period described in subparagraph (A) may be extended for not more than 15 additional days if the consumer reporting agency receives information from the consumer during that 30-day period that is relevant to the reinvestigation.

(C) Limitations on extension of period to reinvestigate. Subparagraph (B) shall not apply to any reinvestigation in which, during the 30-day period described in subparagraph (A), the

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information that is the subject of the reinvestigation is found to be inaccurate or incomplete or the consumer reporting agency determines that the information cannot be verified.

(2) Prompt notice of dispute to furnisher of information.

(A) In general. Before the expiration of the 5-business-day period beginning on the date on which a consumer reporting agency receives notice of a dispute from any consumer in accordance with paragraph (1), the agency shall provide notification of the dispute to any person who provided any item of information in dispute, at the address and in the manner established with the person. The notice shall include all relevant information regarding the dispute that the agency has received from the consumer.

(B) Provision of other information from consumer. The consumer reporting agency shall promptly provide to the person who provided the information in dispute all relevant information regarding the dispute that is received by the agency from the consumer after the period referred to in subparagraph (A) and before the end of the period referred to in paragraph (1)(A).

(3) Determination that dispute is frivolous or irrelevant.

(A) In general. Notwithstanding paragraph (1), a consumer reporting agency may terminate a reinvestigation of information

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disputed by a consumer under that paragraph if the agency reasonably determines that the dispute by the consumer is frivolous or irrelevant, including by reason of a failure by a consumer to provide sufficient information to investigate the disputed information.

(B) Notice of determination. Upon making any determination in accordance with subparagraph (A) that a dispute is frivolous or irrelevant, a consumer reporting agency shall notify the consumer of such determination not later than 5 business days after making such determination, by mail or, if authorized by the consumer for that purpose, by any other means available to the agency.

(C) Contents of notice. A notice under subparagraph (B) shall include

(i) the reasons for the determination under subparagraph (A); and

(ii) identification of any information required to investigate the disputed information, which may consist of a standardized form describing the general nature of such information.

(4) Consideration of consumer information. In conducting any reinvestigation under paragraph (1) with respect to disputed information in the file of any consumer, the

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consumer reporting agency shall review and consider all relevant information submitted by the consumer in the period described in paragraph (1)(A) with respect to such disputed information.

(5) Treatment of inaccurate or unverifiable information.

(A) In general. If, after any reinvestigation under paragraph (1) of any information disputed by a consumer, an item of the information is found to be inaccurate or incomplete or cannot be verified, the consumer reporting agency shall promptly delete that item of information from the consumer's file or modify that item of information, as appropriate, based on the results of the reinvestigation.

(B) Requirements relating to reinsertion of previously deleted material.

(i) Certification of accuracy of information. If any information is deleted from a consumer's file pursuant to subparagraph (A), the information may not be reinserted in the file by the consumer reporting agency unless the person who furnishes the information certifies that the information is complete and accurate.

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(ii) Notice to consumer. If any information that has been deleted from a consumer's file pursuant to subparagraph (A) is reinserted in the file, the consumer reporting agency shall notify the consumer of the reinsertion in writing not later than 5 business days after the reinsertion or, if authorized by the consumer for that purpose, by any other means available to the agency.

(iii) Additional information. As part of, or in addition to, the notice under clause (ii), a consumer reporting agency shall provide to a consumer in writing not later than 5 business days after the date of the reinsertion

(I) a statement that the disputed information has been reinserted;

(II) the business name and address of any furnisher of information contacted and the telephone number of such furnisher, if reasonably available, or of any furnisher of information that contacted the consumer reporting agency, in connection with the reinsertion of such information; and

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(III) a notice that the consumer has the right to add a statement to the consumer's file disputing the accuracy or completeness of the disputed information.

(C) Procedures to prevent reappearance. A consumer reporting agency shall maintain reasonable procedures designed to prevent the reappearance in a consumer's file, and in consumer reports on the consumer, of information that is deleted pursuant to this paragraph (other than information that is reinserted in accordance with subparagraph (B)(i)).

(D) Automated reinvestigation system. Any consumer reporting agency that compiles and maintains files on consumers on a nationwide basis shall implement an automated system through which furnishers of information to that consumer reporting agency may report the results of a reinvestigation that finds incomplete or inaccurate information in a consumer's file to other such consumer reporting agencies.

(6) Notice of results of reinvestigation.

(A) In general. A consumer reporting agency shall provide written notice to a consumer of the results of a reinvestigation under this subsection not later than 5 business days

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after the completion of the reinvestigation, by mail or, if authorized by the consumer for that purpose, by other means available to the agency.

(B) Contents. As part of, or in addition to, the notice under subparagraph (A), a consumer reporting agency shall provide to a consumer in writing before the expiration of the 5-day period referred to in subparagraph (A)

(i) a statement that the reinvestigation is completed;

(ii) a consumer report that is based upon the consumer's file as that file is revised as a result of the reinvestigation;

(iii) a notice that, if requested by the consumer, a description of the procedure used to determine the accuracy and completeness of the information shall be provided to the consumer by the agency, including the business name and address of any furnisher of information contacted in connection with such information and the telephone number of such furnisher, if reasonably available;

(iv) a notice that the consumer has the right to add a statement to the consumer's file disputing the accuracy

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or completeness of the information; and

(v) a notice that the consumer has the right to request under subsection (d) that the consumer reporting agency furnish notifications under that subsection.

(7) Description of reinvestigation procedure. A consumer reporting agency shall provide to a consumer a description referred to in paragraph (6)(B)(iii) by not later than 15 days after receiving a request from the consumer for that description.

(8) Expedited dispute resolution. If a dispute regarding an item of information in a consumer's file at a consumer reporting agency is resolved in accordance with paragraph (5)(A) by the deletion of the disputed information by not later than 3 business days after the date on which the agency receives notice of the dispute from the consumer in accordance with paragraph (1)(A), then the agency shall not be required to comply with paragraphs (2), (6), and (7) with respect to that dispute if the agency

(A) provides prompt notice of the deletion to the consumer by telephone;

(B) includes in that notice, or in a written notice that accompanies a confirmation and consumer report provided in accordance with

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subparagraph (C), a statement of the consumer's right to request under subsection (d) that the agency furnish notifications under that subsection; and

(C) provides written confirmation of the deletion and a copy of a consumer report on the consumer that is based on the consumer's file after the deletion, not later than 5 business days after making the deletion.

(b) Statement of dispute. If the reinvestigation does not resolve the dispute, the consumer may file a brief statement setting forth the nature of the dispute. The consumer reporting agency may limit such statements to not more than one hundred words if it provides the consumer with assistance in writing a clear summary of the dispute. (c) Notification of consumer dispute in subsequent consumer reports. Whenever a statement of a dispute is filed, unless there is reasonable grounds to believe that it is frivolous or irrelevant, the consumer reporting agency shall, in any subsequent consumer report containing the information in question, clearly note that it is disputed by the consumer and provide either the consumer's statement or a clear and accurate codification or summary thereof. (d) Notification of deletion of disputed information. Following any deletion of information which is found to be inaccurate or whose accuracy can no longer be verified or any notation as to disputed information, the consumer reporting agency shall, at the request of the consumer, furnish notification that the item has been deleted or the statement, codification or summary pursuant to

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subsection (b) or (c) of this section to any person specifically designated by the consumer who has within two years prior thereto received a consumer report for employment purposes, or within six months prior thereto received a consumer report for any other purpose, which contained the deleted or disputed information. § 612. Charges for certain disclosures [15 U.S.C. § 1681j] (a) Reasonable charges allowed for certain disclosures.

(1) In general. Except as provided in subsections (b), (c), and (d), a consumer reporting agency may impose a reasonable charge on a consumer

(A) for making a disclosure to the consumer pursuant to section 609 [§ 1681g], which charge

(i) shall not exceed $8; and

(ii) shall be indicated to the consumer before making the disclosure; and

(B) for furnishing, pursuant to 611(d) [§ 1681i], following a reinvestigation under section 611(a) [§ 1681i], a statement, codification, or summary to a person designated by the consumer under that section after the 30-day period beginning on the date of notification of the consumer under paragraph (6) or (8) of section 611(a) [§ 1681i] with respect to the reinvestigation, which charge

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(i) shall not exceed the charge that the agency would impose on each designated recipient for a consumer report; and

(ii) shall be indicated to the consumer before furnishing such information.

(2) Modification of amount. The Federal Trade Commission shall increase the amount referred to in paragraph (1)(A)(I) on January 1 of each year, based proportionally on changes in the Consumer Price Index, with fractional changes rounded to the nearest fifty cents.

(b) Free disclosure after adverse notice to consumer. Each consumer reporting agency that maintains a file on a consumer shall make all disclosures pursuant to section 609 [§ 1681g] without charge to the consumer if, not later than 60 days after receipt by such consumer of a notification pursuant to section 615 [§ 1681m], or of a notification from a debt collection agency affiliated with that consumer reporting agency stating that the consumer's credit rating may be or has been adversely affected, the consumer makes a request under section 609 [§ 1681g]. (c) Free disclosure under certain other circumstances. Upon the request of the consumer, a consumer reporting agency shall make all disclosures pursuant to section 609 [§ 1681g] once during any 12-month period without charge to that consumer if the consumer certifies in writing that the consumer

(1) is unemployed and intends to apply for employment in the 60-day period beginning on the date on which the certification is made;

(2) is a recipient of public welfare assistance; or

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(3) has reason to believe that the file on the consumer at the agency contains inaccurate information due to fraud.

(d) Other charges prohibited. A consumer reporting agency shall not impose any charge on a consumer for providing any notification required by this title or making any disclosure required by this title, except as authorized by subsection (a). § 613. Public record information for employment purposes [15 U.S.C. § 1681k] (a) In general. A consumer reporting agency which furnishes a consumer report for employment purposes and which for that purpose compiles and reports items of information on consumers which are matters of public record and are likely to have an adverse effect upon a consumer's ability to obtain employment shall

(1) at the time such public record information is reported to the user of such consumer report, notify the consumer of the fact that public record information is being reported by the consumer reporting agency, together with the name and address of the person to whom such information is being reported; or

(2) maintain strict procedures designed to insure that whenever public record information which is likely to have an adverse effect on a consumer's ability to obtain employment is reported it is complete and up to date. For purposes of this paragraph, items of public record relating to arrests, indictments, convictions, suits, tax liens, and outstanding judgments shall be considered up to date if the current public record status of the item at the time of the report is reported.

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(b) Exemption for national security investigations. Subsection (a) does not apply in the case of an agency or department of the United States Government that seeks to obtain and use a consumer report for employment purposes, if the head of the agency or department makes a written finding as prescribed under section 604(b)(4)(A). § 614. Restrictions on investigative consumer reports [15 U.S.C. § 1681l] Whenever a consumer reporting agency prepares an investigative consumer report, no adverse information in the consumer report (other than information which is a matter of public record) may be included in a subsequent consumer report unless such adverse information has been verified in the process of making such subsequent consumer report, or the adverse information was received within the three-month period preceding the date the subsequent report is furnished. § 615. Requirements on users of consumer reports [15 U.S.C. § 1681m] (a) Duties of users taking adverse actions on the basis of information contained in consumer reports. If any person takes any adverse action with respect to any consumer that is based in whole or in part on any information contained in a consumer report, the person shall

(1) provide oral, written, or electronic notice of the adverse action to the consumer;

(2) provide to the consumer orally, in writing, or electronically

(A) the name, address, and telephone number of the consumer reporting agency

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(including a toll-free telephone number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis) that furnished the report to the person; and

(B) a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken; and

(3) provide to the consumer an oral, written, or electronic notice of the consumer's right

(A) to obtain, under section 612 [§ 1681j], a free copy of a consumer report on the consumer from the consumer reporting agency referred to in paragraph (2), which notice shall include an indication of the 60-day period under that section for obtaining such a copy; and

(B) to dispute, under section 611 [§ 1681i], with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.

(b) Adverse action based on information obtained from third parties other than consumer reporting agencies.

(1) In general. Whenever credit for personal, family, or household purposes involving a consumer is denied or the charge for such credit is increased either wholly or partly because of information obtained from a person other than

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a consumer reporting agency bearing upon the consumer's credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living, the user of such information shall, within a reasonable period of time, upon the consumer's written request for the reasons for such adverse action received within sixty days after learning of such adverse action, disclose the nature of the information to the consumer. The user of such information shall clearly and accurately disclose to the consumer his right to make such written request at the time such adverse action is communicated to the consumer.

(2) Duties of person taking certain actions based on information provided by affiliate.

(A) Duties, generally. If a person takes an action described in subparagraph (B) with respect to a consumer, based in whole or in part on information described in subparagraph (C), the person shall

(i) notify the consumer of the action, including a statement that the consumer may obtain the information in accordance with clause (ii); and

(ii) upon a written request from the consumer received within 60 days after transmittal of the notice required by clause (I), disclose to the consumer the nature of the information upon which the action is based by not later

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than 30 days after receipt of the request.

(B) Action described. An action referred to in subparagraph (A) is an adverse action described in section 603(k)(1)(A) [§ 1681a], taken in connection with a transaction initiated by the consumer, or any adverse action described in clause (i) or (ii) of section 603(k)(1)(B) [§ 1681a].

(C) Information described. Information referred to in subparagraph (A)

(i) except as provided in clause (ii), is information that

(I) is furnished to the person taking the action by a person related by common ownership or affiliated by common corporate control to the person taking the action; and

(II) bears on the credit worthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living of the consumer; and

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(ii) does not include

(I) information solely as to transactions or experiences between the consumer and the person furnishing the information; or

(II) information in a consumer report.

(c) Reasonable procedures to assure compliance. No person shall be held liable for any violation of this section if he shows by a preponderance of the evidence that at the time of the alleged violation he maintained reasonable procedures to assure compliance with the provisions of this section. (d) Duties of users making written credit or insurance solicitations on the basis of information contained in consumer files.

(1) In general. Any person who uses a consumer report on any consumer in connection with any credit or insurance transaction that is not initiated by the consumer, that is provided to that person under section 604(c)(1)(B) [§ 1681b], shall provide with each written solicitation made to the consumer regarding the transaction a clear and conspicuous statement that

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(A) information contained in the consumer's consumer report was used in connection with the transaction;

(B) the consumer received the offer of credit or insurance because the consumer satisfied the criteria for credit worthiness or insurability under which the consumer was selected for the offer;

(C) if applicable, the credit or insurance may not be extended if, after the consumer responds to the offer, the consumer does not meet the criteria used to select the consumer for the offer or any applicable criteria bearing on credit worthiness or insurability or does not furnish any required collateral;

(D) the consumer has a right to prohibit information contained in the consumer's file with any consumer reporting agency from being used in connection with any credit or insurance transaction that is not initiated by the consumer; and

(E) the consumer may exercise the right referred to in subparagraph (D) by notifying a notification system established under section 604(e) [§ 1681b].

(2) Disclosure of address and telephone number. A statement under paragraph (1) shall include the address and toll-free telephone number of the appropriate

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notification system established under section 604(e) [§ 1681b].

(3) Maintaining criteria on file. A person who makes an offer of credit or insurance to a consumer under a credit or insurance transaction described in paragraph (1) shall maintain on file the criteria used to select the consumer to receive the offer, all criteria bearing on credit worthiness or insurability, as applicable, that are the basis for determining whether or not to extend credit or insurance pursuant to the offer, and any requirement for the furnishing of collateral as a condition of the extension of credit or insurance, until the expiration of the 3-year period beginning on the date on which the offer is made to the consumer.

(4) Authority of federal agencies regarding unfair or deceptive acts or practices not affected. This section is not intended to affect the authority of any Federal or State agency to enforce a prohibition against unfair or deceptive acts or practices, including the making of false or misleading statements in connection with a credit or insurance transaction that is not initiated by the consumer.

§ 616. Civil liability for willful noncompliance [15 U.S.C. § 1681n] (a) In general. Any person who willfully fails to comply with any requirement imposed under this title with respect to any consumer is liable to that consumer in an amount equal to the sum of (1) (A) any actual damages sustained by the consumer as a result of the failure or damages of not less than $100 and not more than $1,000; or

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(B) in the case of liability of a natural person for obtaining a consumer report under false pretenses or knowingly without a permissible purpose, actual damages sustained by the consumer as a result of the failure or $1,000, whichever is greater;

(2) such amount of punitive damages as the court may allow; and

(3) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court.

(b) Civil liability for knowing noncompliance. Any person who obtains a consumer report from a consumer reporting agency under false pretenses or knowingly without a permissible purpose shall be liable to the consumer reporting agency for actual damages sustained by the consumer reporting agency or $1,000, whichever is greater. (c) Attorney's fees. Upon a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney's fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper. § 617. Civil liability for negligent noncompliance [15 U.S.C. § 1681o]

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(a) In general. Any person who is negligent in failing to comply with any requirement imposed under this title with respect to any consumer is liable to that consumer in an amount equal to the sum of

(1) any actual damages sustained by the consumer as a result of the failure;

(2) in the case of any successful action to enforce any liability under this section, the costs of the action together with reasonable attorney's fees as determined by the court.

(b) Attorney's fees. On a finding by the court that an unsuccessful pleading, motion, or other paper filed in connection with an action under this section was filed in bad faith or for purposes of harassment, the court shall award to the prevailing party attorney's fees reasonable in relation to the work expended in responding to the pleading, motion, or other paper. § 618. Jurisdiction of courts; limitation of actions [15 U.S.C. § 1681p] An action to enforce any liability created under this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within two years from the date on which the liability arises, except that where a defendant has materially and willfully misrepresented any information required under this title to be disclosed to an individual and the information so misrepresented is material to the establishment of the defendant's liability to that individual under this title, the action may be brought at any time within two years after discovery by the individual of the misrepresentation.

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§ 619. Obtaining information under false pretenses [15 U.S.C. § 1681q] Any person who knowingly and willfully obtains information on a consumer from a consumer reporting agency under false pretenses shall be fined under title 18, United States Code, imprisoned for not more than 2 years, or both. § 620. Unauthorized disclosures by officers or employees [15 U.S.C. § 1681r] Any officer or employee of a consumer reporting agency who knowingly and willfully provides information concerning an individual from the agency's files to a person not authorized to receive that information shall be fined under title 18, United States Code, imprisoned for not more than 2 years, or both. § 621. Administrative enforcement [15 U.S.C. § 1681s] (a) (1) Enforcement by Federal Trade Commission. Compliance with the requirements imposed under this title shall be enforced under the Federal Trade Commission Act [15 U.S.C. §§ 41 et seq.] by the Federal Trade Commission with respect to consumer reporting agencies and all other persons subject thereto, except to the extent that enforcement of the requirements imposed under this title is specifically committed to some other government agency under subsection (b) hereof. For the purpose of the exercise by the Federal Trade Commission of its functions and powers under the Federal Trade Commission Act, a violation of any requirement or prohibition imposed under this title shall constitute an unfair or deceptive act or practice in commerce in violation of section 5(a) of the Federal Trade Commission Act [15 U.S.C. § 45(a)] and shall be subject to enforcement by the Federal Trade Commission under section 5(b) thereof [15 U.S.C. § 45(b)] with respect to any consumer reporting agency or person subject to enforcement by the Federal Trade Commission pursuant to this subsection,

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irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests in the Federal Trade Commission Act. The Federal Trade Commission shall have such procedural, investigative, and enforcement powers, including the power to issue procedural rules in enforcing compliance with the requirements imposed under this title and to require the filing of reports, the production of documents, and the appearance of witnesses as though the applicable terms and conditions of the Federal Trade Commission Act were part of this title. Any person violating any of the provisions of this title shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act as though the applicable terms and provisions thereof were part of this title.

2) (A) In the event of a knowing violation, which constitutes a pattern or practice of violations of this title, the Commission may commence a civil action to recover a civil penalty in a district court of the United States against any person that violates this title. In such action, such person shall be liable for a civil penalty of not more than $2,500 per violation.

(B) In determining the amount of a civil penalty under subparagraph (A), the court shall take into account the degree of culpability, any history of prior such conduct, ability to pay, effect on ability to continue to do business, and such other matters as justice may require.

(3) Notwithstanding paragraph (2), a court may not impose any civil penalty on a person for a violation of section 623(a)(1) [§ 1681s-2] unless the person has been enjoined from committing the violation, or ordered not to

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commit the violation, in an action or proceeding brought by or on behalf of the Federal Trade Commission, and has violated the injunction or order, and the court may not impose any civil penalty for any violation occurring before the date of the violation of the injunction or order.

(4) Neither the Commission nor any other agency referred to in subsection (b) may prescribe trade regulation rules or other regulations with respect to this title.

(b) Enforcement by other agencies. Compliance with the requirements imposed under this title with respect to consumer reporting agencies, persons who use consumer reports from such agencies, persons who furnish information to such agencies, and users of information that are subject to subsection (d) of section 615 [§ 1681m] shall be enforced under

(1) section 8 of the Federal Deposit Insurance Act [12 U.S.C. § 1818], in the case of

(A) national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency;

(B) member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25(a) [25A] of the Federal

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Reserve Act [12 U.S.C. §§ 601 et seq., §§ 611 et seq], by the Board of Governors of the Federal Reserve System; and

(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal Deposit Insurance Corporation;

(2) section 8 of the Federal Deposit Insurance Act [12 U.S.C. § 1818], by the Director of the Office of Thrift Supervision, in the case of a savings association the deposits of which are insured by the Federal Deposit Insurance Corporation;

(3) the Federal Credit Union Act [12 U.S.C. §§ 1751 et seq.], by the Administrator of the National Credit Union Administration [National Credit Union Administration Board] with respect to any Federal credit union;

(4) subtitle IV of title 49 [49 U.S.C. §§ 10101 et seq.], by the Secretary of Transportation, with respect to all carriers subject to the jurisdiction of the Surface Transportation Board;

(5) the Federal Aviation Act of 1958 [49 U.S.C. Appx §§ 1301 et seq.], by the Secretary of Transportation with respect to any air carrier or foreign air carrier subject to that Act [49 U.S.C. Appx §§ 1301 et seq.]; and

(6) the Packers and Stockyards Act, 1921 [7 U.S.C. §§ 181 et seq.] (except as provided in section 406 of that Act

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[7 U.S.C. §§ 226 and 227]), by the Secretary of Agriculture with respect to any activities subject to that Act.

The terms used in paragraph (1) that are not defined in this title or otherwise defined in section 3(s) of the Federal Deposit Insurance Act (12 U.S.C. § 1813(s)) shall have the meaning given to them in section 1(b) of the International Banking Act of 1978 (12 U.S.C. § 3101). (c) State action for violations.

(1) Authority of states. In addition to such other remedies as are provided under State law, if the chief law enforcement officer of a State, or an official or agency designated by a State, has reason to believe that any person has violated or is violating this title, the State

(A) may bring an action to enjoin such violation in any appropriate United States district court or in any other court of competent jurisdiction;

(B) subject to paragraph (5), may bring an action on behalf of the residents of the State to recover

(i) damages for which the person is liable to such residents under sections 616 and 617 [§§ 1681n and 1681o] as a result of the violation;

(ii) in the case of a violation of section 623(a) [§ 1681s-2], damages for which

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the person would, but for section 623(c) [§ 1681s-2], be liable to such residents as a result of the violation; or

(iii) damages of not more than $1,000 for each willful or negligent violation; and

(C) in the case of any successful action under subparagraph (A) or (B), shall be awarded the costs of the action and reasonable attorney fees as determined by the court.

(2) Rights of federal regulators. The State shall serve prior written notice of any action under paragraph (1) upon the Federal Trade Commission or the appropriate Federal regulator determined under subsection (b) and provide the Commission or appropriate Federal regulator with a copy of its complaint, except in any case in which such prior notice is not feasible, in which case the State shall serve such notice immediately upon instituting such action. The Federal Trade Commission or appropriate Federal regulator shall have the right

(A) to intervene in the action;

(B) upon so intervening, to be heard on all matters arising therein;

(C) to remove the action to the appropriate United States district court; and

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(D) to file petitions for appeal.

(3) Investigatory powers. For purposes of bringing any action under this subsection, nothing in this subsection shall prevent the chief law enforcement officer, or an official or agency designated by a State, from exercising the powers conferred on the chief law enforcement officer or such official by the laws of such State to conduct investigations or to administer oaths or affirmations or to compel the attendance of witnesses or the production of documentary and other evidence.

(4) Limitation on state action while federal action pending. If the Federal Trade Commission or the appropriate Federal regulator has instituted a civil action or an administrative action under section 8 of the Federal Deposit Insurance Act for a violation of this title, no State may, during the pendency of such action, bring an action under this section against any defendant named in the complaint of the Commission or the appropriate Federal regulator for any violation of this title that is alleged in that complaint.

(5) Limitations on state actions for violation of section 623(a)(1) [§ 1681s-2].

(A) Violation of injunction required. A State may not bring an action against a person under paragraph (1)(B) for a violation of section 623(a)(1) [§ 1681s-2], unless

(i) the person has been enjoined from committing the violation, in an action

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brought by the State under paragraph (1)(A); and

(ii) the person has violated the injunction.

(B) Limitation on damages recoverable. In an action against a person under paragraph (1)(B) for a violation of section 623(a)(1) [§ 1681s-2], a State may not recover any damages incurred before the date of the violation of an injunction on which the action is based.

(d) Enforcement under other authority. For the purpose of the exercise by any agency referred to in subsection (b) of this section of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (b) of this section, each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under this title any other authority conferred on it by law. Notwithstanding the preceding, no agency referred to in subsection (b) may conduct an examination of a bank, savings association, or credit union regarding compliance with the provisions of this title, except in response to a complaint (or if the agency otherwise has knowledge) that the bank, savings association, or credit union has violated a provision of this title, in which case, the agency may conduct an examination as necessary to investigate the complaint. If an agency determines during an investigation in response to a complaint that a violation of this title has occurred, the agency may, during its next 2

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regularly scheduled examinations of the bank, savings association, or credit union, examine for compliance with this title. (e) Interpretive authority. The Board of Governors of the Federal Reserve System may issue interpretations of any provision of this title as such provision may apply to any persons identified under paragraph (1), (2), and (3) of subsection (b), or to the holding companies and affiliates of such persons, in consultation with Federal agencies identified in paragraphs (1), (2), and (3) of subsection (b). § 622. Information on overdue child support obligations [15 U.S.C. § 1681s-1] Notwithstanding any other provision of this title, a consumer reporting agency shall include in any consumer report furnished by the agency in accordance with section 604 [§ 1681b] of this title, any information on the failure of the consumer to pay overdue support which

(1) is provided

(A) to the consumer reporting agency by a State or local child support enforcement agency; or

(B) to the consumer reporting agency and verified by any local, State, or Federal government agency; and

(2) antedates the report by 7 years or less.

§ 623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. § 1681s-2]

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(a) Duty of furnishers of information to provide accurate information.

(1) Prohibition.

(A) Reporting information with actual knowledge of errors. A person shall not furnish any information relating to a consumer to any consumer reporting agency if the person knows or consciously avoids knowing that the information is inaccurate.

(B) Reporting information after notice and confirmation of errors. A person shall not furnish information relating to a consumer to any consumer reporting agency if

(i) the person has been notified by the consumer, at the address specified by the person for such notices, that specific information is inaccurate; and

(ii) the information is, in fact, inaccurate.

(C) No address requirement. A person who clearly and conspicuously specifies to the consumer an address for notices referred to in subparagraph (B) shall not be subject to subparagraph (A); however, nothing in subparagraph (B) shall require a person to specify such an address.

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(2) Duty to correct and update information. A person who

(A) regularly and in the ordinary course of business furnishes information to one or more consumer reporting agencies about the person's transactions or experiences with any consumer; and

(B) has furnished to a consumer reporting agency information that the person determines is not complete or accurate,

shall promptly notify the consumer reporting agency of that determination and provide to the agency any corrections to that information, or any additional information, that is necessary to make the information provided by the person to the agency complete and accurate, and shall not thereafter furnish to the agency any of the information that remains not complete or accurate.

(3) Duty to provide notice of dispute. If the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer.

(4) Duty to provide notice of closed accounts. A person who regularly and in the ordinary course of business furnishes information to a consumer reporting agency regarding a consumer who has a credit account with that person shall notify the agency of the voluntary closure of

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the account by the consumer, in information regularly furnished for the period in which the account is closed.

(5) Duty to provide notice of delinquency of accounts. A person who furnishes information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the month and year of the commencement of the delinquency that immediately preceded the action.

(b) Duties of furnishers of information upon notice of dispute. (1) In general. After receiving notice pursuant to section 611(a)(2) [§ 1681i] of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall

(A) conduct an investigation with respect to the disputed information;

(B) review all relevant information provided by the consumer reporting agency pursuant to section 611(a)(2) [§ 1681i];

(C) report the results of the investigation to the consumer reporting agency; and

(D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer

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reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis.

(2) Deadline. A person shall complete all investigations, reviews, and reports required under paragraph (1) regarding information provided by the person to a consumer reporting agency, before the expiration of the period under section 611(a)(1) [§ 1681i] within which the consumer reporting agency is required to complete actions required by that section regarding that information.

(c) Limitation on liability. Sections 616 and 617 [§§ 1681n and 1681o] do not apply to any failure to comply with subsection (a), except as provided in section 621(c)(1)(B) [§ 1681s]. (d) Limitation on enforcement. Subsection (a) shall be enforced exclusively under section 621 [§ 1681s] by the Federal agencies and officials and the State officials identified in that section. § 624. Relation to State laws [15 U.S.C. § 1681t] (a) In general. Except as provided in subsections (b) and (c), this title does not annul, alter, affect, or exempt any person subject to the provisions of this title from complying with the laws of any State with respect to the collection, distribution, or use of any information on consumers, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. (b) General exceptions. No requirement or prohibition may be imposed under the laws of any State

(1) with respect to any subject matter regulated under

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(A) subsection (c) or (e) of section 604 [§ 1681b], relating to the prescreening of consumer reports;

(B) section 611 [§ 1681i], relating to the time by which a consumer reporting agency must take any action, including the provision of notification to a consumer or other person, in any procedure related to the disputed accuracy of information in a consumer's file, except that this subparagraph shall not apply to any State law in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996;

(C) subsections (a) and (b) of section 615 [§ 1681m], relating to the duties of a person who takes any adverse action with respect to a consumer;

(D) section 615(d) [§ 1681m], relating to the duties of persons who use a consumer report of a consumer in connection with any credit or insurance transaction that is not initiated by the consumer and that consists of a firm offer of credit or insurance;

(E) section 605 [§ 1681c], relating to information contained in consumer reports, except that this subparagraph shall not apply to any State law in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996; or

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(F) section 623 [§ 1681s-2], relating to the responsibilities of persons who furnish information to consumer reporting agencies, except that this paragraph shall not apply

(i) with respect to section 54A(a) of chapter 93 of the Massachusetts Annotated Laws (as in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996); or

(ii) with respect to section 1785.25(a) of the California Civil Code (as in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996);

(2) with respect to the exchange of information among persons affiliated by common ownership or common corporate control, except that this paragraph shall not apply with respect to subsection (a) or (c)(1) of section 2480e of title 9, Vermont Statutes Annotated (as in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996); or

(3) with respect to the form and content of any disclosure required to be made under section 609(c) [§ 1681g].

(c) Definition of firm offer of credit or insurance. Notwithstanding any definition of the term "firm offer of credit or insurance" (or any equivalent term) under the laws of any State, the definition of that term contained in section 603(l) [§ 1681a] shall be

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construed to apply in the enforcement and interpretation of the laws of any State governing consumer reports. (d) Limitations. Subsections (b) and (c)

(1) do not affect any settlement, agreement, or consent judgment between any State Attorney General and any consumer reporting agency in effect on the date of enactment of the Consumer Credit Reporting Reform Act of 1996; and

(2) do not apply to any provision of State law (including any provision of a State constitution) that

(A) is enacted after January 1, 2004;

(B) states explicitly that the provision is intended to supplement this title; and

(C) gives greater protection to consumers than is provided under this title.

§ 625. Disclosures to FBI for counterintelligence purposes [15 U.S.C. § 1681u] (a) Identity of financial institutions. Notwithstanding section 604 [§ 1681b] or any other provision of this title, a consumer reporting agency shall furnish to the Federal Bureau of Investigation the names and addresses of all financial institutions (as that term is defined in section 1101 of the Right to Financial Privacy Act of 1978 [12 U.S.C. § 3401]) at which a consumer maintains or has maintained an account, to the extent that information is in the files of the agency, when presented with a written request for that information, signed by the Director of

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the Federal Bureau of Investigation, or the Director's designee, which certifies compliance with this section. The Director or the Director's designee may make such a certification only if the Director or the Director's designee has determined in writing that

(1) such information is necessary for the conduct of an authorized foreign counterintelligence investigation; and

(2) there are specific and articulable facts giving reason to believe that the consumer

(A) is a foreign power (as defined in section 101 of the Foreign Intelligence Surveillance Act of 1978 [50 U.S.C. § 1801]) or a person who is not a United States person (as defined in such section 101) and is an official of a foreign power; or

(B) is an agent of a foreign power and is engaging or has engaged in an act of international terrorism (as that term is defined in section 101(c) of the Foreign Intelligence Surveillance Act of 1978 [50 U.S.C. § 1801(c)]) or clandestine intelligence activities that involve or may involve a violation of criminal statutes of the United States.

(b) Identifying information. Notwithstanding the provisions of section 604 [§ 1681b] or any other provision of this title, a consumer reporting agency shall furnish identifying information respecting a consumer, limited to name, address, former addresses, places of employment, or former places of

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employment, to the Federal Bureau of Investigation when presented with a written request, signed by the Director or the Director's designee, which certifies compliance with this subsection. The Director or the Director's designee may make such a certification only if the Director or the Director's designee has determined in writing that

(1) such information is necessary to the conduct of an authorized counterintelligence investigation; and

(2) there is information giving reason to believe that the consumer has been, or is about to be, in contact with a foreign power or an agent of a foreign power (as defined in section 101 of the Foreign Intelligence Surveillance Act of 1978 [50 U.S.C. § 1801]).

(c) Court order for disclosure of consumer reports. Notwithstanding section 604 [§ 1681b] or any other provision of this title, if requested in writing by the Director of the Federal Bureau of Investigation, or a designee of the Director, a court may issue an order ex parte directing a consumer reporting agency to furnish a consumer report to the Federal Bureau of Investigation, upon a showing in camera that

(1) the consumer report is necessary for the conduct of an authorized foreign counterintelligence investigation; and

(2) there are specific and articulable facts giving reason to believe that the consumer whose consumer report is sought

(A) is an agent of a foreign power, and

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(B) is engaging or has engaged in an act of international terrorism (as that term is defined in section 101(c) of the Foreign Intelligence Surveillance Act of 1978 [50 U.S.C. § 1801(c)]) or clandestine intelligence activities that involve or may involve a violation of criminal statutes of the United States.

The terms of an order issued under this subsection shall not disclose that the order is issued for purposes of a counterintelligence investigation. (d) Confidentiality. No consumer reporting agency or officer, employee, or agent of a consumer reporting agency shall disclose to any person, other than those officers, employees, or agents of a consumer reporting agency necessary to fulfill the requirement to disclose information to the Federal Bureau of Investigation under this section, that the Federal Bureau of Investigation has sought or obtained the identity of financial institutions or a consumer report respecting any consumer under subsection (a), (b), or (c), and no consumer reporting agency or officer, employee, or agent of a consumer reporting agency shall include in any consumer report any information that would indicate that the Federal Bureau of Investigation has sought or obtained such information or a consumer report. (e) Payment of fees. The Federal Bureau of Investigation shall, subject to the availability of appropriations, pay to the consumer reporting agency assembling or providing report or information in accordance with procedures established under this section a fee for reimbursement for such costs as are reasonably necessary and which have been directly incurred in searching, reproducing, or transporting books, papers, records, or other data required or requested to be produced under this section.

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(f) Limit on dissemination. The Federal Bureau of Investigation may not disseminate information obtained pursuant to this section outside of the Federal Bureau of Investigation, except to other Federal agencies as may be necessary for the approval or conduct of a foreign counterintelligence investigation, or, where the information concerns a person subject to the Uniform Code of Military Justice, to appropriate investigative authorities within the military department concerned as may be necessary for the conduct of a joint foreign counterintelligence investigation. (g) Rules of construction. Nothing in this section shall be construed to prohibit information from being furnished by the Federal Bureau of Investigation pursuant to a subpoena or court order, in connection with a judicial or administrative proceeding to enforce the provisions of this Act. Nothing in this section shall be construed to authorize or permit the withholding of information from the Congress. (h) Reports to Congress. On a semiannual basis, the Attorney General shall fully inform the Permanent Select Committee on Intelligence and the Committee on Banking, Finance and Urban Affairs of the House of Representatives, and the Select Committee on Intelligence and the Committee on Banking, Housing, and Urban Affairs of the Senate concerning all requests made pursuant to subsections (a), (b), and (c). (i) Damages. Any agency or department of the United States obtaining or disclosing any consumer reports, records, or information contained therein in violation of this section is liable to the consumer to whom such consumer reports, records, or information relate in an amount equal to the sum of

(1) $100, without regard to the volume of consumer reports, records, or information involved;

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(2) any actual damages sustained by the consumer as a result of the disclosure;

(3) if the violation is found to have been willful or intentional, such punitive damages as a court may allow; and

(4) in the case of any successful action to enforce liability under this subsection, the costs of the action, together with reasonable attorney fees, as determined by the court.

(j) Disciplinary actions for violations. If a court determines that any agency or department of the United States has violated any provision of this section and the court finds that the circumstances surrounding the violation raise questions of whether or not an officer or employee of the agency or department acted willfully or intentionally with respect to the violation, the agency or department shall promptly initiate a proceeding to determine whether or not disciplinary action is warranted against the officer or employee who was responsible for the violation. (k) Good-faith exception. Notwithstanding any other provision of this title, any consumer reporting agency or agent or employee thereof making disclosure of consumer reports or identifying information pursuant to this subsection in good-faith reliance upon a certification of the Federal Bureau of Investigation pursuant to provisions of this section shall not be liable to any person for such disclosure under this title, the constitution of any State, or any law or regulation of any State or any political subdivision of any State. (l) Limitation of remedies. Notwithstanding any other provision of this title, the remedies and sanctions set forth in this section

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shall be the only judicial remedies and sanctions for violation of this section. (m) Injunctive relief. In addition to any other remedy contained in this section, injunctive relief shall be available to require compliance with the procedures of this section. In the event of any successful action under this subsection, costs together with reasonable attorney fees, as determined by the court, may be recovered.

Legislative History

House Reports: No. 91-975 (Comm. on Banking and Currency) and No. 91-1587 (Comm. of Conference)

Senate Reports: No. 91-1139 accompanying S. 3678 (Comm. on Banking and Currency)

Congressional Record, Vol. 116 (1970)

May 25, considered and passed House. Sept. 18, considered and passed Senate, amended. Oct. 9, Senate agreed to conference report. Oct. 13, House agreed to conference report.

Enactment: Public Law No. 91-508 (October 26, 1970):

Amendments: Public Law Nos.

95-473 (October 17, 1978) 95-598 (November 6, 1978) 98-443 (October 4, 1984)

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101-73 (August 9, 1989) 102-242 (December 19, 1991) 102-537 (October 27, 1992) 102-550 (October 28, 1992) 103-325 (September 23, 1994) 104-88 (December 29, 1995) 104-93 (January 6, 1996) 104-193 (August 22, 1996) 104-208 (September 30, 1996) 105-107 (November 20, 1997) 105-347 (November 2, 1998)

1. The reporting periods have been lengthened for certain adverse information pertaining to U.S. Government insured or guaranteed student loans, or pertaining to national direct student loans. See sections 430A(f) and 463(c)(3) of the Higher Education Act of 1965, 20 U.S.C. 1080a(f) and 20 U.S.C. 1087cc(c)(3), respectively. ** Should read "paragraphs (4) and (5) ..." Prior Section 605(a)(6) was amended and redesignated as Section 605(a)(5) in November 1998.

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Fair Debt Collection Practices Act To amend the Consumer Credit Protection Act to prohibit abusive practices by debt collectors. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Consumer Credit Protection Act (15 U.S.C. 1601 et seq.) is amended by adding at the end thereof the following new title: TITLE VIII - DEBT COLLECTION PRACTICES [Fair Debt Collection Practices Act]

Table of Contents §801. Short Title §802. Congressional findings and declaration of purpose §803. Definitions §804. Acquisition of location information §805. Communication in connection with debt collection §806. Harassment or abuse §807. False or misleading representations §808. Unfair practice §809. Validation of debts §810. Multiple debts §811. Legal actions by debt collectors §812. Furnishing certain deceptive forms §813. Civil liability §814. Administrative enforcement §815. Reports to Congress by the Commission §816. Relation to State laws §817. Exemption for State regulation §818. Effective date

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§ 801. Short Title [15 USC 1601 note] This title may be cited as the "Fair Debt Collection Practices Act." § 802. Congressional findings and declarations of purpose [15 USC 1692] (a) There is abundant evidence of the use of abusive, deceptive, and unfair debt collection practices by many debt collectors. Abusive debt collection practices contribute to the number of personal bankruptcies, to marital instability, to the loss of jobs, and to invasions of individual privacy. (b) Existing laws and procedures for redressing these injuries are inadequate to protect consumers. (c) Means other than misrepresentation or other abusive debt collection practices are available for the effective collection of debts. (d) Abusive debt collection practices are carried on to a substantial extent in interstate commerce and through means and instrumentalities of such commerce. Even where abusive debt collection practices are purely intrastate in character, they nevertheless directly affect interstate commerce. (e) It is the purpose of this title to eliminate abusive debt collection practices by debt collectors, to insure that those debt collectors who refrain from using abusive debt collection practices are not competitively disadvantaged, and to promote consistent State action to protect consumers against debt collection abuses. § 803. Definitions [15 USC 1692a] As used in this title --

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(1) The term "Commission" means the Federal Trade Commission.

(2) The term "communication" means the conveying of information regarding a debt directly or indirectly to any person through any medium.

(3) The term "consumer" means any natural person obligated or allegedly obligated to pay any debt.

(4) The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.

(5) The term "debt" means any obligation or alleged obligation of a consumer to pay money arising out of a transaction in which the money, property, insurance or services which are the subject of the transaction are primarily for personal, family, or household purposes, whether or not such obligation has been reduced to judgment.

(6) The term "debt collector" means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another. Notwithstanding the exclusion provided by clause

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(F) of the last sentence of this paragraph, the term includes any creditor who, in the process of collecting his own debts, uses any name other than his own which would indicate that a third person is collecting or attempting to collect such debts. For the purpose of section 808(6), such term also includes any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the enforcement of security interests. The term does not include --

(A) any officer or employee of a creditor while, in the name of the creditor, collecting debts for such creditor;

(B) any person while acting as a debt collector for another person, both of whom are related by common ownership or affiliated by corporate control, if the person acting as a debt collector does so only for persons to whom it is so related or affiliated and if the principal business of such person is not the collection of debts;

(C) any officer or employee of the United States or any State to the extent that collecting or attempting to collect any debt is in the performance of his official duties;

(D) any person while serving or attempting to serve legal process on

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any other person in connection with the judicial enforcement of any debt;

(E) any nonprofit organization which, at the request of consumers, performs bona fide consumer credit counseling and assists consumers in the liquidation of their debts by receiving payments from such consumers and distributing such amounts to creditors; and

(F) any person collecting or attempting to collect any debt owed or due or asserted to be owed or due another to the extent such activity (i) is incidental to a bona fide fiduciary obligation or a bona fide escrow arrangement; (ii) concerns a debt which was originated by such person; (iii) concerns a debt which was not in default at the time it was obtained by such person; or (iv) concerns a debt obtained by such person as a secured party in a commercial credit transaction involving the creditor.

(7) The term "location information" means a consumer's place of abode and his telephone number at such place, or his place of employment.

(8) The term "State" means any State, territory, or possession of the United States, the District of

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Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the foregoing.

§ 804. Acquisition of location information [15 USC 1692b] Any debt collector communicating with any person other than the consumer for the purpose of acquiring location information about the consumer shall --

(1) identify himself, state that he is confirming or correcting location information concerning the consumer, and, only if expressly requested, identify his employer;

(2) not state that such consumer owes any debt;

(3) not communicate with any such person more than once unless requested to do so by such person or unless the debt collector reasonably believes that the earlier response of such person is erroneous or incomplete and that such person now has correct or complete location information;

(4) not communicate by post card;

(5) not use any language or symbol on any envelope or in the contents of any communication effected by the mails or telegram that indicates that the debt collector is in the debt collection business or that the communication relates to the collection of a debt; and

(6) after the debt collector knows the consumer is represented by an attorney with regard to the subject debt and has knowledge of, or can readily

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ascertain, such attorney's name and address, not communicate with any person other than that attorney, unless the attorney fails to respond within a reasonable period of time to the communication from the debt collector.

§ 805. Communication in connection with debt collection [15 USC 1692c] (a) COMMUNICATION WITH THE CONSUMER GENERALLY. Without the prior consent of the consumer given directly to the debt collector or the express permission of a court of competent jurisdiction, a debt collector may not communicate with a consumer in connection with the collection of any debt --

(1) at any unusual time or place or a time or place known or which should be known to be inconvenient to the consumer. In the absence of knowledge of circumstances to the contrary, a debt collector shall assume that the convenient time for communicating with a consumer is after 8 o'clock antimeridian and before 9 o'clock postmeridian, local time at the consumer's location;

(2) if the debt collector knows the consumer is represented by an attorney with respect to such debt and has knowledge of, or can readily ascertain, such attorney's name and address, unless the attorney fails to respond within a reasonable period of time to a communication from the debt collector or unless the attorney consents to direct communication with the consumer; or

(3) at the consumer's place of employment if the debt collector knows or has reason to know that the

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consumer's employer prohibits the consumer from receiving such communication.

(b) COMMUNICATION WITH THIRD PARTIES. Except as provided in section 804, without the prior consent of the consumer given directly to the debt collector, or the express permission of a court of competent jurisdiction, or as reasonably necessary to effectuate a postjudgment judicial remedy, a debt collector may not communicate, in connection with the collection of any debt, with any person other than a consumer, his attorney, a consumer reporting agency if otherwise permitted by law, the creditor, the attorney of the creditor, or the attorney of the debt collector. (c) CEASING COMMUNICATION. If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except --

(1) to advise the consumer that the debt collector's further efforts are being terminated;

(2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or

(3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.

If such notice from the consumer is made by mail, notification shall be complete upon receipt.

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(d) For the purpose of this section, the term "consumer" includes the consumer's spouse, parent (if the consumer is a minor), guardian, executor, or administrator. § 806. Harassment or abuse [15 USC 1692d] A debt collector may not engage in any conduct the natural consequence of which is to harass, oppress, or abuse any person in connection with the collection of a debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The use or threat of use of violence or other criminal means to harm the physical person, reputation, or property of any person.

(2) The use of obscene or profane language or language the natural consequence of which is to abuse the hearer or reader.

(3) The publication of a list of consumers who allegedly refuse to pay debts, except to a consumer reporting agency or to persons meeting the requirements of section 603(f) or 604(3)1 of this Act.

(4) The advertisement for sale of any debt to coerce payment of the debt.

(5) Causing a telephone to ring or engaging any person in telephone conversation repeatedly or continuously with intent to annoy, abuse, or harass any person at the called number.

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(6) Except as provided in section 804, the placement of telephone calls without meaningful disclosure of the caller's identity.

§ 807. False or misleading representations [15 USC 1962e] A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The false representation or implication that the debt collector is vouched for, bonded by, or affiliated with the United States or any State, including the use of any badge, uniform, or facsimile thereof.

(2) The false representation of --

(A) the character, amount, or legal status of any debt; or

(B) any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

(3) The false representation or implication that any individual is an attorney or that any communication is from an attorney.

(4) The representation or implication that nonpayment of any debt will result in the arrest or imprisonment of any person or the seizure, garnishment, attachment, or sale of any property or

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wages of any person unless such action is lawful and the debt collector or creditor intends to take such action.

(5) The threat to take any action that cannot legally be taken or that is not intended to be taken.

(6) The false representation or implication that a sale, referral, or other transfer of any interest in a debt shall cause the consumer to --

(A) lose any claim or defense to payment of the debt; or

(B) become subject to any practice prohibited by this title.

(7) The false representation or implication that the consumer committed any crime or other conduct in order to disgrace the consumer.

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

(9) The use or distribution of any written communication which simulates or is falsely represented to be a document authorized, issued, or approved by any court, official, or agency of the United States or any State, or which creates a false impression as to its source, authorization, or approval.

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(10) The use of any false representation or deceptive means to collect or attempt to collect any debt or to obtain information concerning a consumer.

(11) The failure to disclose in the initial written communication with the consumer and, in addition, if the initial communication with the consumer is oral, in that initial oral communication, that the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose, and the failure to disclose in subsequent communications that the communication is from a debt collector, except that this paragraph shall not apply to a formal pleading made in connection with a legal action.

(12) The false representation or implication that accounts have been turned over to innocent purchasers for value.

(13) The false representation or implication that documents are legal process.

(14) The use of any business, company, or organization name other than the true name of the debt collector's business, company, or organization.

(15) The false representation or implication that documents are not legal process forms or do not require action by the consumer.

(16) The false representation or implication that a debt collector operates or is employed by a

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consumer reporting agency as defined by section 603(f) of this Act.

§ 808. Unfair practices [15 USC 1692f] A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.

(2) The acceptance by a debt collector from any person of a check or other payment instrument postdated by more than five days unless such person is notified in writing of the debt collector's intent to deposit such check or instrument not more than ten nor less than three business days prior to such deposit.

(3) The solicitation by a debt collector of any postdated check or other postdated payment instrument for the purpose of threatening or instituting criminal prosecution.

(4) Depositing or threatening to deposit any postdated check or other postdated payment instrument prior to the date on such check or instrument.

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(5) Causing charges to be made to any person for communications by concealment of the true propose of the communication. Such charges include, but are not limited to, collect telephone calls and telegram fees.

(6) Taking or threatening to take any nonjudicial action to effect dispossession or disablement of property if --

(A) there is no present right to possession of the property claimed as collateral through an enforceable security interest;

(B) there is no present intention to take possession of the property; or

(C) the property is exempt by law from such dispossession or disablement.

(7) Communicating with a consumer regarding a debt by post card.

(8) Using any language or symbol, other than the debt collector's address, on any envelope when communicating with a consumer by use of the mails or by telegram, except that a debt collector may use his business name if such name does not indicate that he is in the debt collection business.

§ 809. Validation of debts [15 USC 1692g]

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(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing --

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall

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cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. (c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer. § 810. Multiple debts [15 USC 1692h] If any consumer owes multiple debts and makes any single payment to any debt collector with respect to such debts, such debt collector may not apply such payment to any debt which is disputed by the consumer and, where applicable, shall apply such payment in accordance with the consumer's directions. § 811. Legal actions by debt collectors [15 USC 1692i] (a) Any debt collector who brings any legal action on a debt against any consumer shall --

(1) in the case of an action to enforce an interest in real property securing the consumer's obligation, bring such action only in a judicial district or similar legal entity in which such real property is located; or

(2) in the case of an action not described in paragraph (1), bring such action only in the judicial district or similar legal entity --

(A) in which such consumer signed the contract sued upon; or

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(B) in which such consumer resides at the commencement of the action.

(b) Nothing in this title shall be construed to authorize the bringing of legal actions by debt collectors. § 812. Furnishing certain deceptive forms [15 USC 1692j] (a) It is unlawful to design, compile, and furnish any form knowing that such form would be used to create the false belief in a consumer that a person other than the creditor of such consumer is participating in the collection of or in an attempt to collect a debt such consumer allegedly owes such creditor, when in fact such person is not so participating. (b) Any person who violates this section shall be liable to the same extent and in the same manner as a debt collector is liable under section 813 for failure to comply with a provision of this title. § 813. Civil liability [15 USC 1692k] (a) Except as otherwise provided by this section, any debt collector who fails to comply with any provision of this title with respect to any person is liable to such person in an amount equal to the sum of --

(1) any actual damage sustained by such person as a result of such failure;

(2) (A) in the case of any action by an individual, such additional damages as the court may allow, but not exceeding $1,000; or

(B) in the case of a class action, (i) such amount for each named plaintiff as could be recovered under

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subparagraph (A), and (ii) such amount as the court may allow for all other class members, without regard to a minimum individual recovery, not to exceed the lesser of $500,000 or 1 per centum of the net worth of the debt collector; and

(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court. On a finding by the court that an action under this section was brought in bad faith and for the purpose of harassment, the court may award to the defendant attorney's fees reasonable in relation to the work expended and costs.

(b) In determining the amount of liability in any action under subsection (a), the court shall consider, among other relevant factors --

(1) in any individual action under subsection (a)(2)(A), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, and the extent to which such noncompliance was intentional; or

(2) in any class action under subsection (a)(2)(B), the frequency and persistence of noncompliance by the debt collector, the nature of such noncompliance, the resources of the debt collector, the number of persons adversely affected, and the

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extent to which the debt collector's noncompliance was intentional.

(c) A debt collector may not be held liable in any action brought under this title if the debt collector shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. (d) An action to enforce any liability created by this title may be brought in any appropriate United States district court without regard to the amount in controversy, or in any other court of competent jurisdiction, within one year from the date on which the violation occurs. (e) No provision of this section imposing any liability shall apply to any act done or omitted in good faith in conformity with any advisory opinion of the Commission, notwithstanding that after such act or omission has occurred, such opinion is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. § 814. Administrative enforcement [15 USC 1692l] (a) Compliance with this title shall be enforced by the Commission, except to the extend that enforcement of the requirements imposed under this title is specifically committed to another agency under subsection (b). For purpose of the exercise by the Commission of its functions and powers under the Federal Trade Commission Act, a violation of this title shall be deemed an unfair or deceptive act or practice in violation of that Act. All of the functions and powers of the Commission under the Federal Trade Commission Act are available to the Commission to enforce compliance by any person with this title, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests in the Federal Trade

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Commission Act, including the power to enforce the provisions of this title in the same manner as if the violation had been a violation of a Federal Trade Commission trade regulation rule. (b) Compliance with any requirements imposed under this title shall be enforced under --

(1) section 8 of the Federal Deposit Insurance Act, in the case of --

(A) national banks, by the Comptroller of the Currency;

(B) member banks of the Federal Reserve System (other than national banks), by the Federal Reserve Board; and

(C) banks the deposits or accounts of which are insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), by the Board of Directors of the Federal Deposit Insurance Corporation;

(2) section 5(d) of the Home Owners Loan Act of 1933, section 407 of the National Housing Act, and sections 6(i) and 17 of the Federal Home Loan Bank Act, by the Federal Home Loan Bank Board (acting directing or through the Federal Savings and Loan Insurance Corporation), in the case of any institution subject to any of those provisions;

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(3) the Federal Credit Union Act, by the Administrator of the National Credit Union Administration with respect to any Federal credit union;

(4) subtitle IV of Title 49, by the Interstate Commerce Commission with respect to any common carrier subject to such subtitle;

(5) the Federal Aviation Act of 1958, by the Secretary of Transportation with respect to any air carrier or any foreign air carrier subject to that Act; and

(6) the Packers and Stockyards Act, 1921 (except as provided in section 406 of that Act), by the Secretary of Agriculture with respect to any activities subject to that Act.

(c) For the purpose of the exercise by any agency referred to in subsection (b) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (b), each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under this title any other authority conferred on it by law, except as provided in subsection (d). (d) Neither the Commission nor any other agency referred to in subsection (b) may promulgate trade regulation rules or other regulations with respect to the collection of debts by debt collectors as defined in this title.

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§ 815. Reports to Congress by the Commission [15 USC 1692m] (a) Not later than one year after the effective date of this title and at one-year intervals thereafter, the Commission shall make reports to the Congress concerning the administration of its functions under this title, including such recommendations as the Commission deems necessary or appropriate. In addition, each report of the Commission shall include its assessment of the extent to which compliance with this title is being achieved and a summary of the enforcement actions taken by the Commission under section 814 of this title. (b) In the exercise of its functions under this title, the Commission may obtain upon request the views of any other Federal agency which exercises enforcement functions under section 814 of this title. § 816. Relation to State laws [15 USC 1692n] This title does not annul, alter, or affect, or exempt any person subject to the provisions of this title from complying with the laws of any State with respect to debt collection practices, except to the extent that those laws are inconsistent with any provision of this title, and then only to the extent of the inconsistency. For purposes of this section, a State law is not inconsistent with this title if the protection such law affords any consumer is greater than the protection provided by this title. § 817. Exemption for State regulation [15 USC 1692o] The Commission shall by regulation exempt from the requirements of this title any class of debt collection practices within any State if the Commission determines that under the law of that State that class of debt collection practices is subject to requirements substantially similar to those imposed by this title, and that there is adequate provision for enforcement.

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§ 818. Effective date [15 USC 1692 note] This title takes effect upon the expiration of six months after the date of its enactment, but section 809 shall apply only with respect to debts for which the initial attempt to collect occurs after such effective date. Approved September 20, 1977

ENDNOTES 1. So in original; however, should read "604(a)(3)."

LEGISLATIVE HISTORY: Public Law 95-109 [H.R. 5294] HOUSE REPORT No. 95-131 (Comm. on Banking, Finance, and Urban Affairs). SENATE REPORT No. 95-382 (Comm. on Banking, Housing, and Urban Affairs). CONGRESSIONAL RECORD, Vol. 123 (1977):

Apr. 4, considered and passed House.

Aug. 5, considered and passed Senate, amended.

Sept. 8, House agreed to Senate amendment.

WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 39:

Sept. 20, Presidential statement.

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AMENDMENTS: SECTION 621, SUBSECTIONS (b)(3), (b)(4) and (b)(5) were amended to transfer certain administrative enforcement responsibilities, pursuant to Pub. L. 95-473, § 3(b), Oct. 17, 1978. 92 Stat. 166; Pub. L. 95-630, Title V. § 501, November 10, 1978, 92 Stat. 3680; Pub. L. 98-443, § 9(h), Oct. 4, 1984, 98 Stat. 708. SECTION 803, SUBSECTION (6), defining "debt collector," was amended to repeal the attorney at law exemption at former Section (6)(F) and to redesignate Section 803(6)(G) pursuant to Pub. L. 99-361, July 9, 1986, 100 Stat. 768. For legislative history, see H.R. 237, HOUSE REPORT No. 99-405 (Comm. on Banking, Finance and Urban Affairs). CONGRESSIONAL RECORD: Vol. 131 (1985): Dec. 2, considered and passed House. Vol. 132 (1986): June 26, considered and passed Senate. SECTION 807, SUBSECTION (11), was amended to affect when debt collectors must state (a) that they are attempting to collect a debt and (b) that information obtained will be used for that purpose, pursuant to Pub. L. 104-208 § 2305, 110 Stat. 3009 (Sept. 30, 1996).

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Addresses and Telephone Numbers

Credit BureausEquifax PO Box 740256 Atlanta, GA 30374 800-685-1111

Experian PO Box 2002 Allen, TX 75013 888-397-3742

TransUnion LLC PO Box 34012 Fullerton, CA 92834 800-916-8800

Federal Trade Commission – National and Regional Offices

Headquarters:

Federal Trade Commission Pennsylvania Ave. & Sixth St. NW

Washington, D.C. 20580

Regional Offices: 915 Second Avenue Seattle, WA 98174 (206) 220-6350 11000 Wilshire Boulevard Los Angeles, CA 94102 (310) 575-7575 901 Market St., Suite 570 San Francisco, CA 94103 (415) 744-7920

1405 Curtis St., Suite 2900 Denver, CO 80202 (303) 844-2271 1718 Peachtree St. NW, Suite 1000 Atlanta, GA 30367 (404) 347-4836

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150 William St., Suite 1300 New York, NY 10038 (212) 264-1207 100 N. Central Expressway, Suite 500 Dallas, TX 75201 (214) 767-5501

668 Euclid Ave., Suite 520-A Cleveland, OH 44114 9216) 522-4207 55 East Monroe St., Suite 1437 Chicago, IL 60603 (312) 353-4423

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Primary and Secondary Bureaus by State

Alabama Equifax TransUnion Alaska Experian Equifax Arizona Experian Equifax Arkansas Experian TransUnion California Experian Equifax Colorado Experian TransUnion Connecticut Experian TransUnion Delaware TransUnion Experian D.C. Equifax Experian Florida Equifax Experian Georgia Equifax Experian Hawaii Experian N/A Idaho Equifax Experian Illinois TransUnion Experian Indiana Equifax TransUnion Iowa Equifax Experian Kansas Equifax Experian Kentucky TransUnion Equifax Louisiana Experian Equifax Maine Experian Equifax Maryland Equifax Experian Massachusetts Experian TransUnion Michigan TransUnion Experian Minnesota Equifax Experian Mississippi Equifax TransUnion Missouri Equifax TransUnion Montana Equifax Experian Nebraska Experian Equifax New Hampshire Experian Equifax New Jersey Experian Equifax New Mexico Experian TransUnion New York Experian Equifax North Carolina Equifax TransUnion North Dakota Equifax Experian Ohio Equifax TransUnion Oklahoma Experian Equifax Oregon Equifax Experian Pennsylvania Experian TransUnion Rhode Island Experian Equifax

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South Carolina Equifax Experian South Dakota Experian Equifax Tennessee Experian TransUnion Texas Experian Equifax Utah Experian TransUnion Vermont Experian TransUnion Virginia Equifax TransUnion Washington Equifax Experian West Virginia Equifax TransUnion Wisconsin TransUnion Equifax Wyoming Experian TransUnion

Refer to the yellow pages of your telephone directory for phone numbers of local offices.

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Useful Forms

THE RATING SYSTEM

When you apply for credit – there is a little known rating system that almost all credit grantors use – but they do not reveal this system to you when you apply for credit – but you can learn how to rate yourself. Married: yes ? (best) no ? Age: under 25 ? 25 - 65 ? (best) over 65 ? Income / Income to Debt Ratio – this establishes your ability to repay a loan and is very important in establishing and re-establishing credit. 10% ? (great) 20% ? (good) 30% ? (acceptable) 40% ? (marginal) Telephone in your name: yes ? (best) no ? Checking Account in your name: yes ? (must have) no ? Loans outstanding – what is payment history? ___________________________________ ___________________________________ Previous paid loans – what was payment history? ___________________________________ ___________________________________

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Time lived in area – Time lived at present address – Time lived in previous residence Credit History with other banking institutions, good or bad? The numbering system is not important to you – you can assign your own. You must look at this logically – you need to look your best. Your debt ratio must be low, you must show that you do not move around every six months and you must have at least some credit history that is favorable. More positive information increases chances of being approved for credit.

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REQUEST TO PURCHASE CREDIT REPORT

Date: Name of Credit Bureau: Address: To Whom It May Concern: Please send me a copy of my current credit report. Enclosed is my check in the amount of $_______as payment for the same. Please forward my report to the following address: Name: Address: Previous Address: Social Security No.: Birthdate: Thank you for your attention to this matter. Sincerely, Your Signature

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REQUEST FOR FREE CREDIT REPORT

Date: Name of Credit Bureau: Address: To Whom It May Concern: Please send me a copy of my current credit report. I applied for and was denied credit by (Name of Business / Credit Grantor). Enclosed is a copy of the denial letter. Please forward my report to me as soon as possible to the following address: Name: Address: Previous Address: Social Security No.: Birthdate: Thank you for your attention to this matter. Sincerely, Your Signature

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INVESTIGATION INTO INACCURACIES 1 Steve S. SSN XXX-XX-XXXX Address: (Current address for last 5 years) 1 E. Any Street, Anytown, USA DOB: 1/1/00 I've just reviewed my credit report and have noticed there are several inaccurate items on my report: Chase VISA Acct: xxxxx-xxxxx-xxxx-xxx: This account is listed as being 30 days late. I have never been late on this account. Sears Acct: xxxxx-xxxxx-xxxx-xxx: This account is listed as being 30 days late. I have never been late on this account. Universal Acct: xxxxx-xxxxx-xxxx-xxx: This account is listed as being 30 days late. I have never been late on this account. In addition, there are a number of credit accounts which have been inactive for more than 7 years. As you know, the FCRA states that all credit older than 7 years should be removed from my report. The following accounts should be removed: Diner's Club Acct: xxxxx-xxxxx-xxxx-xxx: GE Consumer Card Acct: xxxxx-xxxxx-xxxx-xxx: Macy's Acct: xxxxx-xxxxx-xxxx-xxx: I have enclosed a copy of my driver's license as proof of identity. Sincerely,

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Steve S.

NVESTIGATION INTO INACCURACIES 2 To Whom It May Concern, I am requesting that the following inaccurate items be immediately investigated. Please delete this misleading information in order to show my true credit history. By the provisions of 15 USC section 1681i of the Fair Credit Reporting Act of 1970, I demand that the following items be re-verified and deleted from my record. Company Name Account # Comments ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ Under federal law, you have 30 days from receipt of this letter to re-verify these entries. It should be understood that failure to do so within a thirty day period constitutes reason to promptly delete the information from my file per FCRA 15 USC s1681i (5)(A). Also, pursuant to USC s1681i (6)(A) of the Fair Credit Reporting Act, please notify me when the items have been deleted. You may send an updated copy of my credit report to the address below. According to the provisions of 15 USC section 1681j,

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there should be no charge for this notification. Additionally, please provide me with the name, address and telephone numbers of each credit grantor or other subscribers that you contacted for follow up. My personal information is as follows: Full Name :____________________________________ Social Security Number: __________ - _______ - __________ Date of Birth ___________ Current Address _________________________________________ _________________________________________ Sincerely, _________________________________________ Signature Date:____________________________________ Certified Mail #__________________________________________________

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REQUEST REMOVAL OF OLD ENTRIES To Whom It May Concern, Please note that under Sections 605 and 607 of the Federal Fair Credit Reporting Act you are obligated within 30 days to delete obsolete information from my consumer credit file. The information being reported on my credit report is more than seven years old and exceeds the statutory time period under this Act, and must be removed: The information to be deleted is as follows: Company Name Account # Comments ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ Also, pursuant to Section 168 of the same Act, I am entitled to be notified when these items have been deleted. Please send an updated copy of my credit report to the address below, as well as to any other party that has inquired about my credit rating in the last six months. My personal information is as follows: Full Name:______________________________ Social Security Number: ________ - _______ - __________ Date of Birth:__________________

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Current Address: ____________________________________________ ____________________________________________ Previous Address: ________________________________________________ ________________________________________________ Sincerely, _______________________________________________ Signature Certified Mail #__________________________________________________

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FIRST FOLLOW-UP ON REQUEST TO REMOVE ITEMS To Whom It May Concern, Thirty days ago you received my letter deposited by registered mail with the US Postal Service. In my letter I had disputed several items listed on my credit report, issued by your firm. The items were outdated and inaccurate. Attached is a copy of the original letter. Under the Fair Credit Reporting Act 15 USC 1681i (5)(A), you had 30 days from the receipt of my letter to respond to my request for re-verification of the erroneous items. You have failed to respond in a timely manner to my request for re-verification. Therefore, it must be that the information on my credit report was either inaccurate or could not be re-verified. In either case, according to the provisions of 15 USC section 1681i (a), the items must be deleted immediately. The listed items represent a very serious error in your reporting. Please respond immediately so that I do not need to pursue my legal rights under 15 USC Section 1681n or 1681o, which require your compliance with the law. Also, pursuant to 15 USC Section 1681i (d) of the Fair Credit Reporting Act, please notify me when the items are deleted. Send me an updated copy of my credit report to the address below, as well as to any other party that has inquired about my credit within the last six months. My personal information is as follows: Full Name:_______________________________________ Social Security Number: ___________ - _______ - _________ Date of Birth:_____________________ Current Address:

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_______________________________ _______________________________ Previous Address: ______________________________ ______________________________ Sincerely, ____________________________________________ Signature Date: ______________________________________ Certified Mail #__________________________________________________

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SECOND FOLLOW-UP ON REQUEST TO REMOVE ITEMS To Whom It May Concern, On _______________________, I wrote to tell you that I had not heard about any specific action taken by you to re-verify the items I had identified in my credit report as inaccurate, outdated or incomplete. Please acknowledge receipt of the attached copies of my correspondence for your review. Since you have not given me names of persons you contacted for re-verification of the information, nor have you complied within the statutory time period (30 days) to my request for re-verification, I assume that you have not been able to re-verify the information I have disputed. Therefore, you must comply with the Fair Credit Reporting Act and delete the disputed items from my credit report. I demand that you send me a copy of my updated credit report showing the elimination of the items disputed in the attached letters. According to the USC section 1681j, this copy must be provided at no cost to me. Additionally, I demand that it be postmarked within five days after signing the certified mail receipt you are holding. Your failure to provide me with an updated copy of my credit report with the disputed items deleted will prompt me to pursue my legal rights under 15USC Section 1681n or 1681o of the Fair Credit Reporting act, “Civil liability for willful noncompliance”. Your credit bureau may be liable for: 1) Any actual damages I sustain due to your failure to delete the items 2) Punitive damages as the court may allow

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3) Cost of the court action, plus attorney's fees A copy of this letter has been sent to the Federal Trade Commission, the Subcommittee on Banking, Credit and Insurance, and the Department of Business and Professional Regulations (Division of Consumer Complaints.) Full Name: _______________________________________________ Social Security Number: __________--________--___________ Date of Birth: _______________________________________ Current Address: ___________________________________________________ ___________________________________________________ Previous Address: ___________________________________________________ ___________________________________________________ Sincerely, _________________________________________ Signature Date:_____________________________________

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REQUEST FOR REMOVAL OF DUPLICATE ENTRIES To Whom It May Concern, I have recently found on my credit report the presence of several inquiries as entries separated from their corresponding accounts. These inquiries duplicate inaccurately the information in my report, and reflect an incomplete and inaccurate processing of information in my file. The inquiry entries should be deleted, or at least merged into the accounts to which they belong. The accounts in question are: Company Name Account # Comments ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ ______________ _____________ ______________________ Under the provisions of the Fair Credit Reporting Act 15 USC Section 1681i, please investigate and delete these disputed items, and send me the names and addresses of persons contacted. Under 15 USC Section 1681i (5)(A), you are allowed thirty days from receipt of this letter to complete these actions, unless you immediately notify me otherwise. Please understand that failure to re-verify these items within this time constitutes non-verification, and the items must be promptly deleted as per Section 1681i (a).

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Also, according to 15 USC Section 1681i (D) of the Fair Credit Reporting Act, please notify me when the items have been deleted, and send an updated copy of my credit report to the address below. There should be no charge for notification of changes on my credit report, pursuant to 15 USC section 1681j, of the Fair Credit Reporting Act. I appreciate your assistance with this matter. Sincerely, _______________________________________________ Signature Full Name:_______________________________________ Social Security Number: _________ - _______ - ___________ Current Address: ___________________________________________________ ___________________________________________________ Previous Address: _______________________________________________ _______________________________________________ Date:___________________________________________

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REQUEST FOR INFORMATION REGARDING CREDIT DENIAL

To Whom It May Concern, Your company has denied me credit. Please be advised that, pursuant to Section 615(b) of the Federal Fair Credit Reporting Act, I am entitled to request, and I hereby do so, a full disclosure of the factual information disclosed to you by persons other than Consumer Reporting Agencies, so that I may refute, challenge or dispute its accuracy. Please take further notice that you are required to render such notification to me within a reasonable period of time. The Federal Trade Commission has defined such reasonable time as 30 days after you receive this request. Please send the information to the address stated below. My personal information is as follows: Full Name:_______________________________________ Social Security Number: _________ - _______ - ___________ Current Address: ___________________________________________________ ___________________________________________________ Previous Address: _______________________________________________ _______________________________________________ Date:___________________________________________

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REQUEST TO CREDITOR TO REMOVE HARMFUL INFORMATION To Whom It May Concern, I have recently found that several of my payments to your account have been labeled as “late” on my credit report. These missed payments were due to: ___________________________________________________ ___________________________________________________ ___________________________________________________ ___________________________________________________ ___________________________________________________ ___________________________________________________ I have always paid my accounts on time in the past. Since the late payments occurred for the above justifiable reasons, please correct the payment history for my account at the following credit bureaus, which carry the history of my account with you: ___________________________________________________ ___________________________________________________ ___________________________________________________ It is imperative that my credit reflect the good business relations I have maintained with your company in the past. The corrections to the credit report will make it more representative of my financial habits. I sincerely hope you will not take into consideration my oversight with these late payments which, I assure you, will not occur again. I look forward to continuing our relationship for many years. My personal information is as follows: Account Number:_________________________________ Full Name:_______________________________________

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Social Security Number: _________ - _______ - ___________ Current Address: ___________________________________________________ ___________________________________________________ Previous Address: _______________________________________________ _______________________________________________ Date:___________________________________________

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REQUEST FOR REMOVAL OF DEBT COUNSELING RECORD

To Whom It May Concern, Some time in the past, I entered into a Credit Counseling/Debt Management program, which I am no longer associated with. It is being reported now by your bureau that I am presently enrolled in this program, which is incorrect information. Under the Federal Fair Credit Reporting Act, all outdated and incorrect information must be removed from my credit report. This information is clearly outdated and is preventing me from reaching my financial goals. I hereby request that you update my file immediately and remove this information permanently. Full Name:_______________________________________ Social Security Number: _________ - _______ - ___________ Current Address: ___________________________________________________ ___________________________________________________ Previous Address: _______________________________________________ _______________________________________________ Date:___________________________________________

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REQUEST TO SEPARATE SPOUSAL CREDIT REPORTS To Whom It May Concern, Under the Equal Opportunity Act, a husband and wife are allowed to maintain separate files pertaining to credit information. We request that the credit information on our accounts be maintained in separate files. We further request that all past, current and future information be reported as separate account information to all credit reporting agencies. Spouse 1 Full Name:_______________________________________ Social Security Number: _________ - _______ - ___________ Current Address: ___________________________________________________ ___________________________________________________ Previous Address: _______________________________________________ _______________________________________________ Date:___________________________________________ Sincerely,

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______________________________________ Signature Date:______________________ Spouse 2 Full Name:_______________________________________ Social Security Number: _________ - _______ - ___________ Current Address: ___________________________________________________ ___________________________________________________ Previous Address: _______________________________________________ _______________________________________________ Date:___________________________________________ Sincerely, ______________________________________ Signature Date:______________________

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NOTICE TO CEASE AND DESIST COMMUNICATION BY PHONE To Whom It May Concern: Please limit your communication with me to writing only. If I receive any live telephone calls, or repeated dialing and hang-ups from your computer dialing systems, I will consider them to constitute harassment. Please be advised that unwanted telephone calls are a class 1 misdemeanor in this state and I will file a complaint against the caller (individually) and your company with my state’s Attorney General. I maintain a telephone log of each call and calls attempted by your automatic dialer. Notice: This letter serves as written notice that I will make an audio recording of your call. Please be advised that you have the right to remain silent. If you ignore this notice and contact me by telephone, you and your employees agree to allow me to make the audio recording of our conversation. You, and your employees, agree to allow said information to be used against you in a court of law. I further demand a copy of your “written policy” for maintaining the “do not call” list, as required by the Telephone Solicitation Act (“TSA”) and the Telephone Consumer Protection Act (TCPA”). Federal Statutes impose a $500 fine against unwanted telephone solicitation. I do not want you to call me. If you call me, you agree to pay, on a for-hire basis, my telephone and equipment and time in answering your call at a rate of no less than $500 per call. I will only accept your written communication. Be advised that I am not requesting a “verification” that you have

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my mailing address; I am requesting a “validation” (competent evidence that I have some contractual obligation to pay you). The Federal Communication Commission can issue citations and fines against companies and individuals found in violation the FCC rules or TCPA guidelines. Please govern yourself accordingly. Sincerely, ________________________________________ Address: ___________________________________ ___________________________________ Date: ______________________________________ Certified Mail #: ___________________________________________

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REQUEST TO VALIDATE TRADE LINE NOTATIONS To Whom It May Concern, I am formally requesting that you validate all trade line notations you have submitted to the three major credit reporting agencies by“_____________________” or “_________________________________________” for me, _______________________, for account number _________________________________. Due to possible inaccuracies in these CRA reports, I must demand that the validation I hereby lawfully request be in the form of a notarized statement by a person with original knowledge of the debt as it was constituted and who can testify that the debt was incurred legally, was not subsequently disputed as a result of returned, faulty, or recalled consumer products, was not utilized as a profit-loss tax deduction during the period it may have been payable, and was not claimed as a loss with any insuring entity during the period it may have been payable. Please be advised that I am not requesting a verification that you have my mailing address; rather, I am requesting validation, i.e., competent evidence that I had some contractual obligation sans consumer protection encumbrance which incurred the original claims associated with this trade line. Please know that you have 30 days from the tracked and confirmed delivery of this lawful notice to either answer these demands or to remove the associated negative trade line notations from the CRA reports. Any other action may constitute evidence of your intent to abridge one or more civil or other constitutional rights. Please be further advised that continued

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unsubstantiated reporting of possible inaccuracies to third parties may provide a basis for criminal complaints being filed in accordance with FDCPA, FCRA, and other federal statutes. I look forward to a timely resolution to this matter. Full Name:_______________________________________ Social Security Number: _________ - _______ - ___________ Current Address: ___________________________________________________ ___________________________________________________ Previous Address: _______________________________________________ _______________________________________________ Date:___________________________________________ Sincerely, ______________________________________ Signature Date:______________________

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REQUEST TO ADD POSITIVE CREDIT INFORMATION To Whom It May Concern, According to the Fair Credit Reporting Act, 15 USC section 1681i, I request that you add the following credit references to my credit report: Creditor Name Creditor Address Account # Account Type ____________ ______________ _________ ____________ ____________ ______________ _________ ____________ ____________ ______________ _________ ____________ ____________ ______________ _________ ____________ ____________ ______________ _________ ____________ ____________ ______________ _________ ____________ ____________ ______________ _________ ____________ ____________ ______________ _________ ____________ I appreciate your attention to this matter, as the addition of these credit references will more accurately portray my credit history. Please inform me within the statutory 30-day time period from your receipt of this letter of your compliance with the provisions described in 15 USC 1681e, which require that all information in a consumer’s credit report must reflect “…the maximum possible level of accuracy”. Full Name:_______________________________________ Social Security Number: _________ - _______ - ___________ Current Address: ___________________________________________________ ___________________________________________________

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Previous Address: _______________________________________________ _______________________________________________ Date:___________________________________________ Sincerely, ______________________________________ Signature Date:______________________

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REQUEST TO INCLUDE 100-WORD STATEMENT To Whom It May Concern, I recently disputed the accuracy and completeness of incorrect information on my credit report. Since reinvestigation has not resolved my dispute, I insist the following statement, without alterations, be included in my credit report to show the nature of my dispute for all to see: _______________________________________________ _______________________________________________ _______________________________________________ _______________________________________________ According to the Fair Credit Reporting Act 15 USC Section 1611i (b), I have the right to include the above consumer statement in my credit report. The Act also states that you are obligated to include my statement in any subsequent consumer reports that include the disputed information. Furthermore, because my statement contains less than 100 words, I demand that you include the full text of the statement in my report, without changes, alterations or summaries. According to the Fair Credit Reporting Act, you are required to send me a free updated copy of my credit report including the above statement, within thirty days from your receipt of this request. This represents a reasonable period of time for completing this update, unless otherwise you notify me immediately. Please send the report to the address stated below. Full Name:_______________________________________ Social Security Number: _________ - _______ - ___________ Current Address:

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___________________________________________________ ___________________________________________________ Previous Address: _______________________________________________ _______________________________________________ Date:___________________________________________ Sincerely, ______________________________________ Signature Date:______________________

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MONTHLY INCOME STATEMENT Income: Yours ____________ Spouse___________ Subtotal of both__________ ________________ Other Income______ Subtotal of all __________ Child Support, Alimony, Investments__________ TOTAL MONTHLY INCOME ________________ Fixed Expenses: Mortgage/Rent _____________ Utilities _____________ Property Taxes _____________ Life & Health Insurance _____________ Auto Insurance _____________ Loan Payments _____________ Credit Cards _____________ Store Credit Cards _____________ Other _____________ TOTAL ________________ Miscellaneous Expenses: Medical/Dental _____________ Food _____________ Daycare _____________ Clothing _____________ Transportation/Fuel _____________ Auto Repairs _____________ Savings _____________ Other _____________ TOTAL ________________ Monthly Income Cash – Minus Expenses ________________