Saturday, July 3, 2010

3: Can Credit Consumers Survive the Credit Reporting Industry? Blog 3

(This is the third in a series of blogs on credit and credit reporting in the United States.
The monthlynotesstaff intends to publish this series as a book. Book publishers, agents, and investors are encouraged to contact us to help secure funding for this project. Consider this to be material under copyright.)

Consumer Stress and the Credit Reporting Industry

There is horrible psychological, visceral, and physical stress in swirling in a maelstrom of negativity with computerized credit reports. Studies of harm to consumer mental and physical health need to be done to document harm done by the credit reporting industry. The advantage the credit reporting companies have is the embarassment the consumer already suffers from being labelled a "debtor". Consumers may believe that calling attention to "financial problems" would further jeopardize their financial situation, for example, in qualifying for mental or physical health care insurance or funding.

The rather official look of computerized bill collection notices is worrisome. Use of the terms "bureau", "national", "federal", "affiliated agencies", and mock court-stamped and other legal style documents is frighteningly Orwellian. "Big Brother" bill collector is following every credit consumer, anonymously, without revealing his or her real identity. Even a mimeographed partially scribbled notice in a governmental "postage-paid" envelope can be intimidating. Accompanied by a letter referencing a purported government agency or a law office with a demand for "$750.00 (or another amount) to settle this matter", a threat of government or court action is almost enough to send the consumer scrambling for his or her checkbook. This is a very intimidating bill collecting strategy. It is worse when followed, for example, by attempted or successful garnishment through internal employer bill collecting associates, complete with imitation government or court papers.

Now more often than in the past, bill collectors send negative entries directly to the computerized clearinghouse companies. Many bill collectors do not even notify the consumer by regular mail. This is a very aggressive bill collecting strategy possibly done to save money on postage and lessen the risk of being held liable for stalking, menacing, or harassing a consumer.

Without notice, consumers can be and often are denied a job, apartment, home, car, or other credit cards, business, or other loans, without a hint of who originated the damaging financial information.

Many consumers must ask "How can this happen?" Why are government or postal inspectors not checking every "US government postage paid" envelope to trace stolen or fabricated meters or meter numbers to at least ensure such companies pay the current postage rate?

There also are intrusive events done by US officials. "The Washington Post" revealed a young Washington, DC police officer was caught using a special police investigation computer to find a PIN (personal identification number) to withdraw money from a bank ATM machine using a credit card number stolen from the residence of a recent robbery victim the officer was called to assist.

The consumer must ask why so many strangers, each with their own financial interests in mind, have access to the consumer's accounts or to systems which can so substantially harm the consumer's accounts, to begin to protect the consumer's privacy, financial present and future.

(See for the fourth in the series "Can Credit Consumers Survive the Credit Reporting Industry?") Contact or for an email or to comment.