Following a malicious hacking of the credit reporting agency Equifax -- an attack that impacted some 150 million Americans whose personal financial information has been stolen -- the agency tried to pull a fast one. Equifax set up a site called equifaxsecurity2017.com for customers to check whether their information was breached. What the company didn't mention, however, was that by agreeing to the site's terms of service, customers are foregoing their right to sue Equifax for damages caused by the hack.
This isn't the first time, nor will it be the last time one or more of the credit reporting agencies has screwed American consumers. The following is an article I wrote for Banter M back in April, 2016 about my harrowing experiences with Equifax.
Like millions of other Americans, I was screwed in a variety of ways by the Great Recession. I won't bore you with the laundry list of horrible financial things I experienced in that time, but it includes, among other things, repossessions, a foreclosure, a short sale and, of course, a Chapter 7 bankruptcy proceeding.
Boiled down, the economic collapse eroded my income to a point where I couldn't pay my mortgage -- or my second mortgage -- or my car payments, and so forth. It also meant I couldn't pay back my business loans, which led to a roundelay of predictably obnoxious creditor phone calls around the clock. Actually, "obnoxious" is a vast understatement. One bill collector from Citizen's Bank called me while I was Christmas shopping, circa 2008, and told me they could enter my home and take anything they want. My response? "No you can't. Goodbye." But, of course, I didn't know for sure, hence, I suffered a minor panic attack while standing outside a Spencer's Gifts at the mall.
And this happened a lot. The panic, especially. Every night at around 3 a.m., like clockwork, I'd suddenly awaken -- racked with world-ending anxiety over my worsening financial situation. For a solid five or six months, I legitimately suffered from 3 a.m. panic attacks -- made even worse after I was hit by a car while bike riding; fracturing one of my vertebra, which resulted in chronic pain, often flaring up during that lonely, horrifying 3 a.m. block of time.
Left without any other options, I chose to file for bankruptcy. Fuck everything, I needed out, and this was the only way to absolve what amounted to roughly half-a-million dollars in debt, including my house, but mostly from my business.
Fast forward several years.
Until around 2012, I was terrified to look at my credit score. Between the Chapter 7, the foreclosure of my house, an IRS tax lien, and all of those lapsed loan payments, there was a solid chance my credit report was a hellscape of financial ruin. At its highest, my FICO credit score was something like 840. I predicted my score, post-Recession, was closer to, I don't know, four? But the urge to rebuild my credit rating outweighed my trepidation, so I found my way to a free credit score website called Credit Karma.
At the time, Credit Karma only featured information from one of the three credit reporting agencies, TransUnion. Through Credit Karma, I could access my TransUnion score at any time, totally for free. And while my score wasn't good, it wasn't nearly as horrible as I thought it'd be. Let's just say it was in the very low six-hundreds. Since then, Credit Karma has added another credit agency to its service: Equifax. Meanwhile, I signed up for a monthly subscription to my Experian report, rounding out all three credit agencies, TransUnion, Experian and shitty, shitty Equifax. We'll circle back to the "shitty, shitty" reference momentarily.
What I discovered, almost from the outset, was that it's all a big scam in which three unaccountable corporate entities have the undeserved power to dictate our financial futures. Most of us don't know how badly they're screwing us -- and they really, really are.
Not too long ago, back in 2013, 60 Minutes aired the results of an investigation of the credit reporting agencies. Here's the upshot:
- Credit reporting is a $4,000,000,000 a year industry.
- They keep records on 200,000,000 Americans.
- There are 40,000,000 errors in those reports.
- 20,000,000 of those errors are serious.
- These errors are virtually impossible to remove from the record.
- The credit reporting agencies have been in violation of federal credit reporting laws for years and refuse to do anything about their violations.
(John Oliver followed up on his HBO show last week, and it's absolutely worth watching.)
40 million errors, and half are serious. And resolving the errors is almost impossible.
First, you have to know about the errors, which means first signing up for a website where your scores can be accessed. To receive all three scores and reports, this will cost you money -- ongoing money. Signing up once, checking your score, then unsubscribing won't help you. Credit Karma is free, but it's incomplete. You must financially genuflect before at least one of them in order to track your score for as long as you need to improve it. My pay service is Experian, which is probably the most referenced agency by potential creditors, banks, landlords, etc, since it includes the famous "FICO" score, which is the industry standard for getting a car loan, mortgage, rental or credit card.
Oh, did I mention that every score will be different? They will be. My FICO score is, fortunately, my best, while Equifax is the worst. Why is Equifax my worst score? In my experience, it's because Equifax is the most disorganized clusterfuck of the trio, racked with mistakes. Equifax is a shitty, shitty, shitty mess.
To that point, and secondly, you have to find the errors and weed them out. In my case, several months ago, my Equifax score dropped 50 points in a single month. 50! As credit scores go, this is a colossally punitive decline. It took me literally years to bump my score up by 20 points. But in one day, my Equifax score crashed. In a panic, I rushed to check my TransUnion and FICO scores and was relieved to note they were unchanged. In fact, my FICO score had gone up on the same day my Equifax score plummeted. Fuck.
What was the problem? It turns out, the second mortgage I held on my old foreclosed house in Pennsylvania was owned by -- let's call them Predatory Bank. Back in February of this year, Predatory Bank merged with another bank -- let's call them Bag of Dicks Bank. When the merger occurred, Bag of Dicks Bank reported its discharged loans to the credit agencies. Equifax, in particular, took the information and decided that I had an all new home equity loan in the amount of $73,000, give or take, and that the last payment is four years past due. On a home I no longer owned.
Cue the sound of my credit score exploding. And not in a good way.
If I hadn't been aware of the mistake, it never would've been resolved. Fortunately, I spotted it on the day it happened and was able to successfully dispute the error. But my score didn't return to where it was before. In other words, my score dropped by 50 points due to the error, but after the record was corrected, it only went back up by 35 points or so. At this point, I had to take a break from dealing with the dispute process because it became so time consuming -- and that's yet another problem. People tend to give up rather than having to perpetually babysit these errors and dispute procedures.
Prior to the Bag of Dicks Bank snafu, I had disputed yet another error with Equifax. A long time ago, I paid off my recession-era back taxes and, as a result, the IRS removed the tax lien. Little do consumers know, however, that the IRS doesn't report the removal tax liens to the credit agencies. You have to do it yourself, even though dings to your score are automatically added. Funny how that works. So anyway, I took the time to assemble the documents and submit the proper removal disputes to the agencies.
Once again, Equifax screwed up. I received an email verifying that the lien would be removed, but months and months went by and the lien wasn't removed.
Thankfully, I was obsessively tracking my score, so I knew about the mistake. How many millions of Americans don't, and therefore wouldn't have known? We have lives to lead, and we wrongfully assume that these agencies tasked with evaluating our financial status would actually get the job done with precision. Obviously not. I had to go through the whole dispute process yet again to force Equifax to correct the same error -- for a second time.
There are disgusting injustices at every turn, especially as we grow older and the odds of being fucked grow larger. But the credit agencies are an almost unspoken breeding ground for royally dicking us all. Again, these are private for-profit companies that are only accountable to their investors. And yet they control our futures. They control where we live and what we buy. In many cases, they control where we work, knowing that potential employers often check your credit score as part of the application process. To repeat: 40 million errors and we have to literally pay for the privilege of policing those errors, when the onus is on the agencies to maintain flawless records given the critical importance of the numbers they churn out.
During the 2016 election so far, we've talked a lot about the damage being done by corporations and too-big-to-fail banks. But the three-headed hydra in the room is Equifax, Experian and TransUnion. If there's any justice, the whole trifecta needs to be crushed and federalized into one government-run -- and therefore accountable to the people -- agency. There are literally tens of millions of reasons why. The incompetence simply doesn't match the power they wield, and the only way to correct the imbalance is to kill them all.
Meanwhile, if you're planning to begin to track your scores. Good luck, and be prepared for an ordeal. And don't worry -- it's only a matter of your entire future. No big deal, right? (Background courtesy Richard S. Rosen and H. Brewton Hagood.)