California Credit Law Blog

The Fair Credit Reporting Act provides that credit reporting agencies may not report records of arrest or any other adverse criminal action that are more than seven (7) years old, except for convictions of crimes. A growing problem is that many Internet based companies are selling criminal records over 7 years old. These companies claim to not be subject to the terms of the FCRA, but the courts have ruled that criminal records sold to potential creditors, landlords, insurance companies and employers are "consumer reports" as defined by the FCRA.

When someone applies for a job, it is very easy for the prospective employer to obtain the obsolete criminal records from one of the Internet sites. The applicant rights are violated when the employer denies employment on this basis. Under the FCRA, an applicant whose rights are violated in this manner has the right to sue the company that reported the obsolete criminal records.

The Credit Card Accountability, Responsibility and Disclosure Act of 2009 ("CARD" Act) goes fully into effect in February 2010. If you want to find out which credit card issuers are complying with CARD at this time, go to www.billshrink.com. You can write in the name of your bank and find out to what extent the bank is in compliance. The major credit card banks are in compliance on some, but not all of the CARD requirements. The site neatly summarizes the ten major protections afforded cardholders. They are protection from arbitrary rate increases through early notification, the right to have interest rates reviewed to see if they should be lowered, payments must be applied to the most expensive balances first, a ban on universal default, a ban on "double-billing," no extra fees for paying by mail, by phone or online, payments received by 5 PM must be credited that day, cardholders must get 21 days from the date the statement is mailed to pay, banks are to provide warnings against paying only the minimum payments, and no marketing to kids without parents' OK.

A Wisconsin woman has filed a class action alleging that Experian's FreeCreditReport.com ads led her to believe she could go to that site for a free credit report. Once she signed up for her "free" credit report she inadvertently ended up with a a $14.95 monthly bill for a credit monitoring service. The complaint alleges no one goes to the site for anything other than a free credit report.

According to Evan Hendricks, author of Credit Scores and Credit Report, a frequent critic of the credit reporting agencies, consumers have paid the agencies for 160 million credit reports over recent years. Congress mandated that the agencies make available one free credit report for each consumer in a given year. The truly free reports are available at www.annualcreditreport.com. Consumers have downloaded 52 million reports from that site.