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THE NEW YORK TIMES

May 11, 2013

The Long Shadow of Bad Credit in a Job Search

By GARY RIVLIN

THE first couple of times Alfred J. Carpenter was turned down for a job, he didn’t know what to think.

He been laid off early in the recession and then had the bad fortune of tearing tendons in his knee just when he didn’t have health insurance. The job market was terrible and he had been out of work for more than a year. But the managers at the first two shoe stores to which he applied in the summer of 2010 seemed to be taken by his résumé. He had sold shoes for six years at Salvatore Ferragamo on Fifth Avenue and later at J. M. Weston, where a pair of men’s dress shoes can cost $2,000. The manager at one shop was already discussing salary. The other, he said, invited him to fill out the paperwork normally done on the first day on a job.

“Who does that if they’re not planning on hiring you?” Mr. Carpenter asked.

Yet neither job materialized. One manager, he said, “basically hung up on me.”

A friend at Bergdorf Goodman, the high-end clothier, secured him an interview for an opening in the shoe department. But when Mr. Carpenter confided to his friend that his finances were a mess, “he tells me, ‘Oh, you’ve got bad credit? They’ll never hire you.’ ” Sure enough, a week or two later, Mr. Carpenter said, he received a notice from Bergdorf informing him that while running a credit check, the store found information that played a role in its hiring decision. It was a so-called adverse action letter that by law a business conducting a credit report is supposed to send to an applicant.

Mr. Carpenter kept applying for jobs and kept checking off the box granting his would-be employer permission to look into his past. And he kept being turned down. There was the recession and there may have been dozens of applicants for each of these jobs. But while Bergdorf was the only company to follow up a job rejection with an adverse action letter, Mr. Carpenter became convinced that his credit report was a curse.

“No one lets me explain, ‘Hey, I had this freak injury when I didn’t have health insurance,’ ” he said. “It’s black and white: ‘You have these bad marks on your record, you don’t get hired.’ ” Down to his last $200, he applied for and was granted food stamps and federal housing assistance.

“There’s no reason,” he said, “a strong, able guy like me should have to go on welfare.”

PEOPLE tend to think of banks and other lenders as the main users of credit reports. But over the last several decades, credit reporting bureaus have been selling their services to a much wider range of buyers.

“Credit reports are really seeping into the soil,” said Sarah Ludwig, co-director of the Neighborhood Economic Development Advocacy Project, a New York-based nonprofit. “It’s taken an outsized role in employment, housing and insurance.”

For those seeking a job, it can lead to what Chi Chi Wu, a staff lawyer at the National Consumer Law Center in Boston, calls “a bizarre, Kafkaesque experience.”

“Someone loses their job,” Ms. Wu said, “so they can’t pay their bills — and now they can’t get a job because they couldn’t pay their bills because they lost a job? It’s this Catch-22 that makes no sense.” It can also be a kind of backdoor job discrimination, Ms. Wu contends, given the numerous studies that demonstrate that those black, Latino or simply poor are more likely to have lower credit scores than those who are white and have means.

Experian, one of the big three credit reporting bureaus, states in its marketing materials, “Credit information provides insight into an applicant’s integrity and responsibility toward his or her financial obligations.”

But to Ms. Wu and others, a credit report says more about a person’s economic circumstances than his or her moral character. “Some people can go to daddy and say, ‘I can’t pay my bills, will you bail me out?’ ” Ms. Wu said. “And others can’t.”

Nearly half — 47 percent — of employers use credit checks when making a hiring decision, according to a 2012 survey by the Society for Human Resource Management. Most businesses use credit checks only to screen for certain positions, but one in eight, the survey found, does a credit check before every hire. “We’ve heard from dozens of people over the past several years who say they’re being denied jobs specifically because of a credit check,” Ms. Ludwig said. The people contacting her group, she said, are “mostly lower-wage workers,” especially those applying to big retail chains.

“Prohibiting the use of credit checks in employment is now our number one campaign,” Ms. Ludwig said. “Because it’s discriminatory. And because the last thing we need in a recession is another barrier to employment.”

Lawmakers in some jurisdictions have proved sympathetic to those arguments. Nine states have adopted legislation that curbs the use of credit reports to judge prospective hires — seven of them since the start of 2010. Representative Steve Cohen, Democrat from Tennessee, has sponsored federal legislation that would restrict their use. The New York Legislature and the New York City Council are considering strict new laws that would greatly limit an employer’s ability to do credit screening.

Advocates and lawmakers are already seeing the impact of their efforts. The Society for Human Resource Management started polling members about use of credit reports as a pre-employment tool in 2004. Over the years, the numbers were consistent: six in 10 businesses indicated that they used them. But in its most recent survey in 2012, that number fell to just below five in 10. That decline no doubt is the result, in part, of new state prohibitions and the attention the issue has received in the last few years, said Kate Kennedy, a spokeswoman for the society. But she also notes that her association has been educating its members in the importance of looking at “how relevant a credit check is for a particular position.”

That is bad news for the big three credit reporting bureaus: Experian, TransUnion and Equifax. But how bad is anyone’s guess. None of the three reveal what portion of overall revenue is derived from employment-related credit checks. Even if they did, the number would only offer a partial picture, said Terry W. Clemans, executive director of the National Consumer Reporting Association, an industry trade group based in Roselle, Ill. “There are several hundred companies out there that specialize in employment screenings,” he said.

Mr. Clemans saw the rapid increase of employment screening through the 1990s and into the 2000s, and considers the rising concern about its use in the last few years “hysteria.” “Credit is one data point that businesses are using to get an overall feel,” Mr. Clemans said. “Does this consumer have a lifestyle that fits the job? Is this someone who I can trust?” It is not the only factor.

“People are assuming because they checked that box agreeing to a consumer report and they were late in paying their Visa bills, that’s why they didn’t get a job,” Mr. Clemans said. It’s easier to blame the credit bureaus, in other words, than to accept that you weren’t the best possible candidate.

STEVEN BURMAN is the founder and president of Credit Advocates, a nonprofit in New York that helps consumers who have credit problems. In the past, people who were rejected for bad credit for a job in financial services might show up for help, but by and large his clients were trying to secure a home loan.

“What’s changed over the last four or five years is now I’m hearing from all these people who are concerned about finding work,” he said. And instead of stockbrokers, Mr. Burman is seeing “regular people looking for blue-collar low-wage jobs” such as security guard or retail clerk.

The problem is most pronounced among women he counsels at a homeless shelter in the Bronx. Those clients are almost all out-of-work single mothers. “They all want to do the right thing,” he said. “But they have terrible credit and none of them can get jobs because of it. It’s a vicious cycle.”

Despite his sympathy for his clients, Mr. Burman told me that he never makes a full-time hire at Credit Advocates without first pulling that person’s credit report. An employee dealing with bill collectors could be a distracted worker, he said. And how financial problems are explained could offer insights into an applicant’s character: Does he take responsibility for debts, or does she blame problems on someone or something else?

“I see it as the start of a dialogue,” he said.

Besides, a credit check is relatively inexpensive. A basic employment screening package can cost $19 to $50 per applicant. “If you have five people and can’t make up your mind, why not pull credit reports?” Mr. Burman asked.

The millions of Americans who saw their credit damaged during the financial crisis in 2008, however, might find Mr. Burman’s rationale unfair.

Gustavo Panesso, a man in his 50s who lives in Queens, was driving to his orientation to be a sales associate at the J. Crew store in Rockefeller Center in August 2010, he said, when his cellphone rang. “It was the man who was supposed to be my supervisor,” Mr. Panesso said. “He tells me, ‘Gustavo, I regret to say that we’re going to have to cancel your orientation because there was a problem with your credit report.’ ”

In Mr. Panesso’s case, the trouble was related to a pair of credit cards he had co-signed for his sister; she had lost her job a few years earlier and the cards were in default. He tried explaining the situation to his would-be bosses, and even hired a lawyer, “but they told me unless I cleared up this discrepancy, we can’t hire you.”

Moreover, credit reports are often inaccurate. In February, the Federal Trade Commission released a report indicating that one in four consumers was likely to find at least one mistake in his or her credit report.

Mr. Panesso was rejected for jobs at several more big national retail chains. But J. Crew, he said, was the only business to send him an adverse action letter. Did that mean the others rejected his application for other reasons? It’s impossible to know for sure.

Amy Traub, a senior policy analyst at the liberal-leaning policy group Demos, and the author of “Discredited: How Employment Credit Checks Keep Qualified Workers Out of a Job,” a report released in March, says that the law requiring an adverse action letter is rarely enforced. “We found that many employers don’t” send them, Ms. Traub said.

Mr. Panesso now picks up odd jobs when he can find them. “Quite frankly,” he said, “I gave up.”

ALFRED CARPENTER, the shoe salesman, can relate. Now a fit man in his 50s, he lives in Bensonhurst, Brooklyn, where he grew up. After graduating with a two-year associate’s degree from Kingsborough Community College, he worked his way up in the shoe business, landing at Ferragamo. In a good year, he said, he would earn $60,000 to $70,000.

In his mid-30s, he quit Ferragamo to study acting. But after two years of trying to catch his big break, he ran out of money and, in 1999, he returned to selling shoes. In 2007 he took a job at Paul & Shark, a store specializing in yachting clothes. In August 2007, four months after he started, Mr. Carpenter was laid off. Not appreciating the size of the economic cataclysm that was about to rock the globe, he decided to take several months off before looking for another job.

“I figured with my résumé, I’d get another job easy,” he said. He also decided he wasn’t going to waste money buying health insurance. “I’m a healthy guy,” he said. “And it was too expensive.”

One day, playing in his regular Saturday morning roller hockey game, he ripped the tendons in one knee. The medical bills — the ambulance, the surgery, rehabilitation — piled up. “Every time I’d open my mailbox,” Mr. Carpenter said, “there’d be another six or seven bills.” A clerk in the hospital’s billing department suggested that he could wipe out his nearly $50,000 in medical costs by filing for bankruptcy.

Sitting at a metal table in his kitchen, he held up the final bankruptcy notice. “This is the cause of all my problems,” he declared. “Without this, I could’ve worked anywhere in the city. I would have had a hundred jobs.”

Mr. Carpenter would try talking to the employers who turned him down. “Was it the bankruptcy?” he would ask. But he never got a satisfying answer, just hemming and hawing. “I could hear it in their voice,” Mr. Carpenter said. After a while, he tried pre-emptively bringing up the bankruptcy in interviews, but that only led to more awkwardness.

Luckily, Mr. Carpenter said, he still lived in the rent-controlled apartment in which he grew up. The monthly rent was $600 and he was able to split the cost with a roommate once things turned bad. The federal assistance amounted to $400 or so a month. But even then he feared ending up homeless, worried that he would never find another job.

“I tell the woman my story during intake,” Mr. Carpenter said about his visit to apply for food stamps and other aid. “And she goes, ‘We hear that story all the time, about the credit.’ She said, ‘Yeah, we know, if you’ve got bad credit, you’re not getting a job.’ ”

SOME jobs require a credit check by law. Depending on the state, that includes positions as teachers, police officers, firefighters and day care operators, said Ms. Kennedy at the human resource society.

Most of the state laws curbing the use of credit reports as an employment screen carve out exceptions for people applying for supervisory positions or executive positions inside a financial institution. Mr. Cohen’s House bill creates exemptions for those seeking a national security clearance.

But what about everyone else?

Companies that use credit reports as an employment screen seem generally reluctant to talk about how or why they use them. Bergdorf Goodman declined to comment, as did several other retailers who rejected Mr. Carpenter for a position. A J. Crew representative said that the company stopped reviewing credit reports in 2012.

“Employers are looking for a sense of responsibility,” said Richard Mellor, a vice president at the National Retail Federation. “They want to see that an individual pays their bills on time and takes responsibility for what they buy.”

The Web site of a pre-employment screening company, Info Cubic, says, “A credit report can be an important indicator of financial responsibility for employees with fiduciary or cash handling responsibilities, access to expensive equipment, other people’s property, or otherwise placed in a position of financial trust.”

Experian’s pitch is more ominous: “Every time you hire a new employee you put a lot on the line,” says a company brochure. “The wrong decision could jeopardize your firm’s assets, reputation, or security.”

Consumer advocates say that there is little evidence for the industry’s claims of a connection between a credit report and an employee’s trustworthiness. One study published in 2008 in the International Journal of Selection and Assessment suggested a correlation between a person’s financial history and workplace theft. But a 2011 study in the Journal of Applied Psychology found no link between a person’s credit score and what it called “deviant” behavior like workplace theft. (It did, however, find a correlation between a low credit score and an agreeable personality.)

Critics also have the testimony of the TransUnion official who told the Oregon Legislature in 2010, “We don’t have any research to show any statistical correlation between what’s in somebody’s credit report and their job performance or their likelihood to commit fraud.”

“As a researcher, I’d like to think that if about half of all employers are doing this, they must have some real evidence that it’s valuable,” said Ms. Traub of Demos. “But in this case that evidence is really lacking.”

MR. CARPENTER finally landed a job at the end of 2011. He caught a break after he confided his troubles to a friend in the shoe business. The friend, too, had credit problems but had found work at a Manhattan shoe store. Mr. Carpenter secured a job there and, last fall, he moved to another store where the pay was better. “I’m happy,” he said, but he also feels shellshocked.

“I have this accident and mess up my credit,” Mr. Carpenter said, “and now I’m the guy people don’t see as trustworthy.”

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REUTERS

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Op-Ed Contributor

The Tyranny of the Billable Hour

By STEVEN J. HARPER

Published: March 28, 2013

THAT bill shall know no limits,” wroteone DLA Piper lawyer to another in 2010 in what the firm is now calling “unfortunate banter” between associates about work for a client. But what is truly unfortunate is the underlying billable-hour regime and the law-firm culture it has spawned.

Lost in the furor surrounding one large firm’s current public relations headache are deeper problems that go to the heart of the prevailing big law-firm business model itself. Regrettably, as with previous episodes that have produced high-profile scandals, the present outcry will probably pass and the billable hour will endure.

It shouldn’t. The billable-hour system is the way most lawyers in big firms charge clients, but it serves no one. Well, almost no one. It brings most equity partners in those firms great wealth. Law firm leaders call it a leveraged pyramid. Most associates call it a living hell.

In a typical large firm, associates earn far less than the client revenues they generate. For example, a client receives an invoice totaling the number of hours each lawyer spends on the client’s matters, multiplied by the lawyer’s hourly rate, say $400 for a junior associate. Most big firms require associates to bill at least 1,900 hours a year, according to a survey last year by NALP, the Association for Legal Career Professionals.

In 2009, DLA Piper announced that it had eliminated associates’ billable-hour requirements in favor of a performance-based reward system. However, the firm’s submission for the association’s current NALP Directory of Legal Employers reports that it has a “minimum billable hour expectation.” In 2011, DLA Piper’s “average annual associate hours worked” (both billable and nonbillable) was 2,462; the billable average was 1,831.

At $400 an hour, a hypothetical 2,000-hour-a-year associate generates $800,000 a year for the firm. But the firm typically pays the salaried lawyer one-fourth of that amount or less.

For associates, the goal is simple: meet the required (or expected) minimum number of billable hours to qualify for annual bonuses and salary increases. Billing 2,000 hours a year isn’t easy. It typically takes at least 50 hours a week to bill an honest 40 hours to a client. Add commuting time, bathroom breaks, lunch, holidays, an annual vacation and a little socializing, and most associates find themselves working evenings and weekends to “make their hours.” Most firms increase financial rewards as an associate’s billables move beyond the stated threshold.

For partners, billable hours are a key measure of associate and partner productivity. More is better. The resulting culture pushes everyone harder. Meanwhile, each partner strives to maximize individual client billings that he or she controls. Those billings in most cases determine a partner’s annual share of the firm’s profits. Their clients also become tickets to other firms. That makes partners reluctant to share too many important client responsibilities with their associates and fellow partners.

For clients, the consequences of the billable-hour system can be absurd. Fatigue through overwork can produce negative returns — the critical document missed during a late-night marathon review; the error in the draft of a corporate filing that goes unnoticed.

Why do clients tolerate this perverse system? Periodically they rebel, especially during economic downturns, but those revolutions have been short-lived and unsuccessful. A 2011 survey by ALM Legal Intelligence, an online data service, found that alternative fee arrangements accounted for only 16 percent of revenues at the nation’s largest law firms in 2010. Despite outcries for reform, the billable hour remains entrenched and the barriers to change are formidable. In many practice areas, including large and lucrative bankruptcy cases, prior court rulings (including the United States Supreme Court’s 2010 opinion in Perdue v. Kenny A.) essentially require lawyers to use the billable-hour approach if they want to assure approval of their fee petitions.

There’s a way out of the mess. But it requires clients to press harder for alternative fee arrangements, courts to back away from policies that embed the billable hour, law firm leaders to stop rewarding excessive associate hours and senior partners to consider the deleterious consequences of their myopic focus on short-term profit-maximizing behavior.

However it comes out, DLA Piper isn’t the first law firm to endure a client billing controversy. While at a big firm, Webster Hubbell, a former Arkansas Supreme Court justice and associate attorney general for President Bill Clinton, was caught billing clients for time that he never worked. He went to prison. A partner in a prominent Chicago law firm got into trouble when someone wondered how he could bill almost 6,000 hours annually over four consecutive years. He couldn’t.

In fact, a cottage industry has now developed in auditing outside law firm invoices to clients. Even so, as the deceit associated with the billable hour continues undetected, equally insidious consequences of the entire system endure. The episodes of public embarrassment will remain infrequent, and the triggers producing them will be idiosyncratic. DLA Piper’s current notoriety began when a former client refused to pay his roughly $675,000 bill. The firm sued him last year, and its internal e-mails about the matter became subject to discovery. Before long, they landed on the front page of The New York Times.

DLA Piper said that the comments of its lawyers were “an inexcusable effort at humor.” What’s really not funny is the toll that the flawed system is taking on a vital profession.



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FTC Approves Final Order Settling Charges Against Equifax Information Services LLC

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that Equifax Information Services LLC violated the Fair Credit Reporting Act and Section 5 of the Federal Trade Commission Act by improperly selling lists of millions of consumers who were late on their mortgages. 

In settling the FTC’s complaint, Equifax agreed to pay its full $392,803 gross revenues as disgorgement of its ill-gotten gain from the conduct challenged by the Commission’s complaint.  The order also prohibits Equifax from 1) furnishing prescreened lists to anyone that it does not have reason to believe has a permissible purpose to receive them; 2) failing to maintain reasonable procedures designed to limit the furnishing of prescreened lists to anyone except those who have a permissible purpose to receive them; and 3) selling prescreened lists in connection with offers for debt relief products or services and mortgage assistance relief products and services, when advance fees are charged, with limited exceptions.

The Commission vote approving the final order and letters to members of the public who commented on it was 3-0-2, with Commissioner Joshua D. Wright and former Chairman Jon Leibowitz not participating.  (FTC File No. 102-3252; the staff contact is Katherine Armstrong, Bureau of Consumer Protection, 202-326-3250; see press release dated October 10, 2012.)

The Federal Trade Commission works for consumers to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, visit the FTC's online Complaint Assistant or call 1-877-FTC-HELP (1-877-382-4357). The FTC enters complaints into Consumer Sentinel, a secure, online database available to more than 2,000 civil and criminal law enforcement agencies in the U.S. and abroad. The FTC’s website provides free information on a variety of consumer topics.  Like the FTC on Facebook, follow us on Twitter, and subscribe to press releases for the latest FTC news and resources.

MEDIA CONTACT:

Office of Public Affairs
202-326-2180



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THE NEW YORK TIMES

Victimized by Credit Reports



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The Redtape Chronicles - NBC News

EXCLUSIVE: Your employer may share your salary, and Equifax might sell that data

By Bob Sullivan

The Equifax credit reporting agency, with the aid of thousands of human resource departments around the country, has assembled what may be the most powerful and thorough private database of Americans’ personal information ever created, containing 190 million employment and salary records covering more than one-third of U.S. adults.

Some of the information in the little-known database, created through an Equifax-owned company called The Work Number, is sold to debt collectors, financial service companies and other entities.

"It's the biggest privacy breach in our time, and it’s legal and no one knows it’s going on," said Robert Mather, who runs a small employment background company named Pre-Employ.com. "It's like a secret CIA."

Despite all the information Americans now share on social media and websites, and all the data we know companies collect on us, one piece of information is still sacred to most people: their salaries. After all, who would post their salary as a status update on Facebook or in a tweet?

But salary information is also for sale by Equifax through The Work Number. Its database is so detailed that it contains week-by-week paystub information dating back years for many individuals, as well as other kinds of human resources-related information, such as health care provider, whether someone has dental insurance and if they’ve ever filed an unemployment claim. In 2009, Equifax said the data covered 30 percent of the U.S. working population, and it now says The Work Number is adding 12 million records annually.

How does Equifax obtain this sensitive and secret information? With the willing aid of thousands of U.S. businesses, including many of the Fortune 500. Government agencies -- representing 85 percent of the federal civilian population, including workers at the Department of Defense, according to Equifax -- and schools also work with The Work Number. Many of them let Equifax tap directly into their data so the credit bureau can always have the latest employment information. In fact, these organizations actually pay Equifax for the privilege of giving away their employees' personal information.

Equifax turns around and sells some of this data to third parties, including debt collectors and other financial services companies. 

Equifax declined to be interviewed, but in an emailed statement to NBCNews.com, it confirmed that it shares "employment data" with debt collectors and others, and said it does so in compliance with Fair Credit Reporting Act guidelines. 

"In all cases, these entities must have a permissible purpose to request employment information," Equifax spokesman Timothy Klein said. 

He also said consumers give these third parties the right to access the data "at the time of application" for credit.

"A consumer grants verifiers (creditors) and their assigned debt collectors the right to verify employment should the consumer default on their account," he said. 

Data for debt collectors
Companies sign up for The Work Number because it gives them an easy way to outsource employment verification of former workers. Firms hate taking these calls, which usually come when a former employee is applying for a new job, because they are a costly distraction for human resources departments and open the firm up to lawsuits if someone says something disparaging about the former employee. So they contract with The WorkNumber, which automates the process. In exchange, firms upload their human resources data to The Work Number, which was part of an independent St.Louis-based firm named TALX until it was acquired by Equifax in 2007 for $1.4 billion.

The Work Number offers consumers some benefits. It provides an easy way for prospective landlords to verify an applicant's income, for example. Consumers tell the Work Number they want a one-time access code, which they then give to a landlord so he or she can verify that the potential tenant can really afford the apartment.

But The Work Number serves dual purposes. It’s also a massive database that Equifax monetizes in a variety of ways, despite the reassuring-sounding messages found all over TheWorkNumber.com.

"Can just anyone get my income information from The Work Number?" reads one passage. Answer: "No. You have to give someone authorization to get your income information from the service."

Employers who sign up for the service go to great pains to reassure workers that their data is safe and secret. Columbia University, when it explained to employees it was transitioning to The Work Number, posted this on the school's website:

"You are the only person who can authorize access to your salary information."

But Kathy Sandy of Sommerville, N.J. was surprised to find that a debt collector had accessed information from her report two years ago, something she learned only when she obtained her "consumer disclosure" from The Work Number. Because the data is considered a credit report, consumers are entitled to one free report every year. The report shows what data the report contains, and what entities have seen it.

Sandy's Work Number report, which she shared with NBC News, is 22 pages long -- an amazingly detailed history of every paycheck she had received for years. The first page of the report lists "verifiers who have requested your data in the past 24 months." On the list is "Pressler and Pressler," a law firm that specializes in debt collection. The firm had sued her in small claims court over a credit card debt that she says she was already repaying.

"I found out debt collectors can access this information, which is strange," Sandy said. "I assumed with The Work Number, for that information, you had to have a (passcode) … but they got in, and got it somehow without my consent."

In brochures where Equifax advertises sale of the data, it's not shy about the source.

"The Work Number specializes in employment and income verification. It's direct from the source: the employer. It's current, as of the last pay period. It's delivered quickly -- on demand," says one brochure, titled "Portfolio Monitoring."

In his statement to NBC News, Klein confirmed that "pay rate" information is shared with third parties, including "mortgage, auto and other financial services credit grantors," as authorized under the Fair Credit Reporting Act.

He denied that salary information is sold to debt collectors, however.

"Debt/Collection agencies may request employment information -- which may be nothing more than verifying that a consumer is working where they say they are – if it qualifies under permissible purpose," he wrote. "Collections agencies are not provided salary information."

That contradicts an assertion made recently by Equifax CEO Richard Smith in 2009, when he talked about how detailed The Work Number data is.

"With FirstSearch and TALX we can provide information about a debtor’s location, income and employment," said Smith in an interview published on NYSE Magazine’s website, referring to The Work Number’s former parent company. "That can help prioritize which accounts to pursue first. If they’re employed, that business has a better shot at collecting what is owed to them."

Klein said Smith misspoke when describing TALX’s services, and reiterated that salary information on consumers is not sold to debt collectors.

'Unbelievably scary'
With or without the income data, The Work Number data is incredibly valuable to debt collectors -- and it may come as a surprise to many workers that their employers, directly or unwittingly, help debt collectors.

Equifax markets The Work Number specifically to student loan issuers. In another brochure on the firm's website, Equifax brags that The Work Number makes debt collectors' jobs easier.

"The Work Number produced a 5.5 percent lift in Right Party Contact and a 7.3 percent lift in Collections Resolution versus current skip-trace methods," the "case study" brochure says.

Equifax’s resale of The Work Number data doesn’t stop there. It also offers "portfolio monitoring" to financial firms who might want to market their products to consumers … or to get early warning on someone who might soon land in financial trouble. It calls this "proactive managing of risk." 

"The Work Number is part of our employment and income verification service. It provides continual track of changes to your customer or client portfolio, delivered on demand per your schedule," it says. "Simply submit a portfolio of customer or client accounts and The Work Number does the rest. ... Using The Work Number to stay abreast of employment changes can expand your ability to mitigate risk while maximizing product and service potential."

Mather has been in the employer data business for more than 20 years, and he says that if Americans suspected their employers were giving away their personal information to a credit bureau, they'd be shocked.

"The story here is how (The Work Number) is getting this information," he said. "When people find out, no respectable employer will continue to do this."

Larry Ponemon is a privacy expert who operates The Ponemon Institute, a consulting firm. He said he’d never heard of companies selling employer data to debt collectors.

"Are you joking? Oh my god, I'm shocked," Ponemon said when the business was described to him. "This is unbelievably scary. I consider payroll information very sensitive and private." In studies he's conducted, salary data is always among the information consumers say is most private.

"If the public knew about this, there would be such outrage," he said. "It's just ... really depressing."

Paul Stephens, director of policy and advocacy at the Privacy Rights Clearinghouse, had heard of The Work Number, but only because some consumers have complained to his agency that the data in its database is inaccurate. Some workers find that when they try to use the information for employment verification, their titles are outdated or otherwise misrepresent their work history, which can be embarrassing for a job applicant.

When told that the data is sold to third parties, he said he was under the impression the data was not shared.

"I think it is something that would be offensive to many people. One typically considers salary information to be shared by your employer just with IRS," he said. 

A glance at the language on The Work Number's website suggested to Stephens that the firm is legally within its rights to share the information, however.

"You get into the 'permissible purpose' doctrine," he said. "Debt collectors have a permissible purpose to look at your credit information. It was my impression that the data was only being given out when employees released it."

'Secret' process?
Data brokers are under heightened scrutiny in Washington, D.C., lately. There are two separate congressional investigations of the industry, and the Federal Trade Commission announced in December that it had begun an inquiry into how brokers obtain their information. Equifax received an inquiry letter from the FTC, but only for the data broker portion of its business involving non-financial data, such as criminal background records and address information.

Credit reporting agencies, such as The Work Number, are distinct from data brokers and are governed by special rules. Ironically, those special rules may open the door for Equifax -- and the credit-reporting side of its business -- to resell the salary information, says Katrina Blodgett, a lawyer with the Federal Trade Commission. She is one the agency’s experts on the Fair Credit Reporting Act. 

The FTC filed a case against TALX and Equifax in 2008 for allegedly failing to provide employers with sufficient notice about their disclosure responsibilities under the Fair Credit Reporting Act. Equifax admitted no wrongdoing and paid a small fine.  

Blodgett said the Fair Credit Reporting Act and subsequent updates give consumers specific legal rights, such as the ability to dispute errors in credit reports. But it also creates permissible purposes for access, including giving financial service companies the right to review credit reports of consumers they do business with. 

"It’s not as easy as it should be to say whether debt collectors can get your consumer reports, because it depends on the circumstance," she said, adding that she believed Equifax could have the right to sell the salary information to debt collectors because it is part of a credit report.

Much attention has been paid to the use of credit reports by human resource departments in recent years, and Congress gave job applicants special rights when a credit report is used during the job interview process. The reverse isn’t true, however, Blodgett pointed out.

"There are special restrictions on how credit reports can be used in hiring decisions, but there are no special restrictions on how employment reports (such as salary information) is used for non-employment purposes," she said.

She said she wasn’t surprised that Equifax is selling the information in The Work Number.

"They are a credit bureau. They sell credit information to lenders," she said.

Mather wants the sale of employee information halted. His firm also performs third-party employment verification, but he does not resell the data he collects.

"I strongly believe there is no reason to resell employee information to debt collectors without the permission of the employer and employee," he said. "This 'secret' process needs to stop. I hope eventually a simple law is passed making it required to get the permission of the employee BEFORE his information is resold. It simply should NOT be used for any other purpose except for employment purposes without permission. In my view, it is a betrayal of trust."

Consumers who want to see what information The Work Number has on their employment history can visit this page on the TheWorkNumber.com. While reports are available online, consumers may have to fill out a form and mail it to The Work Number in some cases.

http://redtape.nbcnews.com/_news/2013/01/30/16762661-exclusive-your-employer-may-share-your-salary-and-equifax-might-sell-that-data?lite

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NEW YORK TIMES

DEAL BOOK

January 7, 2013, 10:30 pm

Rescued by a Bailout, A.I.G. May Sue Its Savior



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BANKRATE.COM

Beat the bank in mandatory arbitration?

Highlights

• Pew study: 98 percent of banks have clauses waiving a jury trial.
• Arbitration clauses save banks money by preventing costly class-action lawsuits.
• Once an arbitrator is selected, you'll be asked to send in a letter to argue your case.

Just say "mandatory arbitration" a couple of times. It may make you feel a little drowsy. But if you ever find yourself in a dispute with your bank or other financial services provider, those two words could determine your chances of successfully resolving it.

Mandatory arbitration clauses are bits of legalese inserted into customer agreements for checking accounts and other financial products, requiring customers to settle disputes with the bank through an arbitrator rather than the courts.

A 2012 study by the Pew Charitable Trusts' Safe Checking in the Electronic Age Project found 66 percent of checking account agreements at the nation's largest banks had mandatory arbitration clauses tucked away inside. Even if the customer agreement allows you to use the court system to challenge your bank, you'll probably still find some restrictions. Of the banks surveyed, a whopping 98 percent had clauses waiving a jury trial; 32 percent had clauses requiring customers to pay some or all legal losses, costs and expenses.

"We found that all the banks restrict consumers from options to resolve their disputes," says Susan Weinstock, project director for Pew's Safe Checking in the Electronic Age Project.

If a majority of large banks forcing consumers into mandatory arbitration seems like a minor point, it's not. There are significant differences between arbitration and trials conducted in the court system, Weinstock says.

Lack of a discovery process means you won't be able to force banks to turn over records and answer questions to help you prove your case. And the results of arbitration are often confidential, so you can't draw any information or precedent from past arbitration cases involving the company or industry, she says.

Banks love arbitration

So why do banks love arbitration clauses so much? Mostly because it saves them money, says Paul Bland, a senior attorney with Public Justice, a public interest law firm in Washington, D.C.

Arbitration clauses save banks money primarily by preventing costly class-action lawsuits. Most clauses prohibit consumers from banding together to sue a financial institution. The downside for consumers is that such prohibitions make it easier for financial institutions to improperly extract cash from customers' pockets a few dollars at a time. Individually, those few dollars wouldn't merit filing an arbitration case, Bland says.

For example, Bland recently handled a case where American Express allegedly underpaid rebates promised to cardholders. Those rebates together probably add up to millions of dollars, but few of the customers who lost out on $100 or less would be willing to take the dispute to arbitration, he says.

"That is a case that can only really be done as a class action," Bland says.

Lack of consumer awareness and hard-to-understand arbitration clauses that vary drastically between banks also may keep consumers from filing complaints, Bland says.

"I talk to a lot of consumers who do not really know what arbitration is and do not really feel like they understand it," he says.

Arbitration is rarely used

Few bank customers ever file cases with arbitrators.

The American Arbitration Association, a leading arbitrator used by many financial institutions, only sees consumers file around 500 cases per year nationwide, says Richard Naimark, an association senior vice president.

Naimark believes that while it's presently small, the number of arbitration cases filed by consumers will rise in the wake of the landmark Supreme Court case, AT&T Mobility LLC v. Concepcion.

That ruling, which made it almost impossible for consumers to get around arbitration clauses, has pushed more banks to adopt the practice, Naimark says.

Public Justice's Bland says that ruling also means that if an arbitration proceeding doesn't go the consumer's way, he or she is stuck with it.

"Once the arbitrator makes a decision, it is almost impossible to get an arbitrator's decision overturned in court," Bland says. "There was one case from the U.S. Court of Appeals from the Third Circuit that said 'glaring errors of law' are not grounds for a returning of the decision."

Data on consumers' chance of success in mandatory arbitration are hard to come by, in part because the results of arbitration claims are usually confidential, Bland says. A 2009 study sponsored by the Searle Civil Justice Institute found that consumers prevail in 53 percent of arbitration cases brought to the American Arbitration Association.

But a 2007 study by Public Citizen found that California credit card customers lost 94 percent of arbitration cases handled by the National Arbitration Forum, which has since been barred from handling consumer cases by a legal settlement with the state of Minnesota.

What to do if arbitration happens to you

If you have to go through arbitration, the proceeding is fairly straightforward, Bland and Naimark agree. You'll initiate the case by filling out a "demand form" on the arbitrator's website and pay a nonrefundable fee. For arbitration association cases involving less than $10,000, the fee is $125; for claims of more than $10,000, it's $375 or more, Naimark says.

Once an arbitrator is selected by the firm, you'll typically be asked to send in a letter arguing your side of the case, along with any evidence you may have. After that, you may have a telephone or in-person hearing that lasts at most a day, after which the arbitrator will rule.

Bland has a few tips for consumers who are thinking about filing a case.

• Read the fine print. Look over your account's terms and conditions and on the arbitration firm's website before proceeding with any type of action. It's easy to make a mistake if you don't know the rules of engagement, Bland says.
• Pick your battles. You may end up picking up the tab for the arbitration firm and the bank's defense if you lose, depending on the rules established by the account agreement. Those costs can far exceed the amount of money in dispute in many cases, Bland says.
• Play for keeps. Once an arbitrator has decided a case, it's nearly impossible to overturn, so be sure you're ready to pursue a case properly before filing with an arbitrator.
• Consider getting an attorney. Arbitration has sometimes been sold as beneficial to consumers because they don't require legal representation, but a lawyer can help you navigate the process more effectively and avoid missteps that could be fatal to your chances of winning.

Help on the way?

If you're considering arbitration, you may want to wait. Under a provision in the Dodd-Frank financial reform law, the Consumer Financial Protection Bureau is studying whether arbitration hurts consumers. If their inquiry turns up evidence that it does, the CFPB will decide whether to impose conditions on how arbitration clauses can be used, says CFPB spokeswoman Moira Vahey.

"After the Bureau completes its study, it will assess whether imposing conditions or prohibitions on arbitration clauses would better protect consumers and serve the public interest," she says.

Until then, you can try doing business with institutions that don't have arbitration clauses in their fine print. Not all banks have mandatory arbitration clauses, and some allow new customers to opt out of arbitration when you first sign up for an account by calling a number or speaking with a banker. Either way, if you have an option to avoid arbitration, you probably should, Bland says.

"I think nearly every person who represents consumers or advocates for consumers would recommend that they opt out. The only people who would tell them otherwise would be employees and representatives of banks," he says.



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How Obama’s DOJ Sold Out American Citizens In the Robo-Signing Criminal Plea

Yesterday afternoon there was a critical guilty plea entered in the ongoing robo-signing mess that lies beneath the festering mortgage crisis.

The former executive of a company that provided documentation used by banks in the foreclosure process pleaded guilty to participating in a six-year mortgage-forgery scheme.

The deal announced Tuesday by the Department of Justice represents one of the only successful criminal prosecutions resulting from the “robo-signing” scandal that surfaced two years ago.

Lorraine Brown, 56 years old, of Alpharetta, Ga., who is a former executive of Lender Processing Services Inc., LPS of Jacksonville, Fla., pleaded guilty to a scheme to prepare and file more than one million fraudulently signed and notarized mortgage-related documents.

A criminal guilty plea to straight on systemic fraud like this (here are the pleas documents) ought to have far ranging consequences for home and mortgage holders, not to mention local county recorders, whose quiet title and fee income, respectively, were damaged by the fraud, or at least so you would think.

A long time attorney involved in the field of mortgage fraud, Cynthia Kouril, writing at Firedoglake, laid out well the paths to recourse plaintiffs damaged by this fraud should have:

At the end, I said that this could be a game changer. In the comments, folks thought that was a reference to the fact that for once we have acriminal case which involves a top tier executive. That is a big deal no doubt, but not the reason this could possibly change everything.

Homeowners who are being foreclosed upon based on a document chain that includes documents prepared by DocX/LPS have a built-in defense, and actually a counterclaim against Ms. Brown’s company. The defense is that the bank offering these documents as evidence no longer has any right to rely on them as proof of anything, and any bank offering a DocX or LPS document as evidence after yesterday knows or should know that they are committing a fraud on the court and on the homeowner.

Secondly, it would mean that the bank would be unable in many instances to prove an essential factual element of its case, that the mortgage and/or note was transferred to the foreclosing entity, and the matter would be ripe for a Summary Judgment motion by the defendant homeowner. This ONLY applies if there are DocX or LPS documents in you chain of transfer (just like the various MERS defenses only applied if your mortgage was put into the MERS system). Also, there may be other facts or circumstance in individual cases that would moot this point.

That sounds marvelous for so many homeowners and other victims, but it is not necessarily going to be the case. Why? Because the Obama Administration and their Department of Justice intentionally sabotaged the ability of these victims to use this plea against the co-conspirator banks, mortgage brokers and mortgage servicers. David Dayen of Firedoglake News is one of the only ones who have caught on to this whitewashing by the DOJ:

Sadly, the federal plea deal strains to hold servicers harmless for this conduct. See this key section, from the “Factual Basis” of the plea:

Brown represented to clients that DocX had robust quality control procedures in place to ensure a thorough and proper signing, notarization, and recordation process. As a result of these representations, clients hired DocX [...]

Unbeknownst to DocX’s clients, the Authorized Signers were instructed by Brown and other DocX employees to allow other, unauthorized, DocX employees to sign, and to have the document notarized as if the actual Authorized Singer had executed the document.

This is just bunk. The idea that servicers – arms of the biggest banks in America – were just duped by Lorraine Brown’s claim of “robust quality control procedures” makes no sense whatsoever. They may not have known the mechanics of Brown’s document fraud, but that’s just because they wanted to insert a layer of plausible deniability – in fact for circumstances just like this. But they definitely wanted documents they could use in court to foreclose on borrowers as quickly as possible. And they didn’t exactly have the ability to do that though any other method than fraud.

That is exactly right. The plea allocution expressly covers the banks asses about knowledge of the forgery. So, as it stands now banks and servicers are also “victims” of Lorraine Brown’s fraud. And that is nothing but pure, unadulterated bullshit, specifically manufactured in the plea process by the government to shield the financial industry at the expense of decimated citizen homeowners.

The pleas did NOT need to include that gratuitous financial industry exculpation, it was sheer treachery by the Obama Department of Justice on the citizens they are supposed to be representing. The subject language did absolutely nothing to mitigate, aggravate, nor perform any function whatsoever, as to the parties to the plea, i.e. the government and the defendant, Lorraine Brown. It’s sole function was ass covering and water carrying for the bankers and financial industry.



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 American Banker

Is Data Safe at Credit Bureaus?

By John Adams

NOV 1, 2012 1:23pm ET

Experian is feeling the heat in the wake of a hacking at Abilene Telco Federal Credit Union that wound up exposing data at the credit reporting agency, leading Experian to defend its security protocols.

"This issue is indicative of the larger problem of cybercrimes facing many companies and many industries, which is the growing sophistication of financial malware," says Gerry Tschopp, a spokesman for Experian.

Tschopp described the attack is an isolated security issue experienced by a few of its U.S. clients, and not an attack on Experian's systems in North America. The credit union did not return calls for comment by Thursday morning.

The trouble started in 2011 when hackers broke into a staffer's computer at Abilene Telco Federal Credit Union, which is now called First Priority Credit Union. The crooks used an illegally obtained username and password to access an Experian account, where they stole Social Security numbers and financial data on several hundred consumers, including many that were not customers of the credit union. The incident is drawing attention to security at Experian and other credit agencies, where there have been dozens of similar breaches over the past few years. DataLossDB's website says more than 17,000 credit reports have been taken from agencies since 2006, mostly through the use of illegally obtained financial institution online credentials.

While the agencies contend that the attacks are not direct, the companies are still being criticized for not doing enough to protect these types of attacks.

"The crooks used basic credentials to get in. It would have been better to increase and strengthen the type of authentication required," says Al Pascual, an industry analyst for security, risk and fraud for Javelin Strategy & Research.

Experian contends its security requires more than just usernames and passwords, and includes other factors such as geolocation and IP addresses. While Tschopp didn't divulge details on software brands and tech structure, Experian uses a risk-based authentication system coupled with a tech network that monitors and detects anomalies in system access by clients. The system looks for access requests made from unusual locations, at odd times or for a unusual purpose. "We require and expect our clients to routinely and securely manage their authentication credentials to the highest standards and monitor the security of their systems," Tschopp says.

While Experian did not define these "highest" standards, emerging guidance from the Federal Financial Institutions Examination Council (FFIEC) strongly encourages layered authentication. That usually means one mode of communication, such as a mobile phone, is used to confirm authentication in another mode, such as a PC, since it's hard for a crook to compromise two devices at the same time.

"In the instances where credentials might be compromised, our security systems monitor 24/7 for any anomalies that could suggest suspicious activity. These are then flagged immediately to the client, and, as appropriate, to consumers and law enforcement for resolution," Tschopp says.

In the Abilene Telco case, Experian's system alerted the credit union and the consumers affected by the suspicious activity, and Tschopp says Experian ensured that the unauthorized access was disabled.

Demitra Wilson, director of media relations for Equifax, said the company could not provide specifics on security measures, and added it uses authentication and detection systems to prevent and identify unauthorized access to a consumer's file. Those processes also include notifying impacted parties, including government authorities in the situations where it appears personal information may have been inappropriately accessed.

Pascual suggested stronger protections against access from unauthorized origin could enhance protection. One option is device fingerprinting, or the gathering of browser, operating system and connection attributes to generate a risk profile of a device. Device fingerprinting is used to determine if a valid password and username is being used to fraudulently access a network from an invalid device, though it's not a foolproof measure.

"If they are using device fingerprinting to make sure that the machines that are accessing the consumer records are bank machines, that will strengthen the protocol," Pascual says.

Experian referred to its protection as multifactor and noted that in some instances with some clients there is a form of device identification, but did not describe its technology as device fingerprinting.

© 2012 American Banker and SourceMedia, Inc. All Rights Reserved. SourceMedia is an Investcorp company. Use, duplication, or sale of this service, or data contained herein, except as described in the Subscription Agreement, is strictly prohibited. 

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ABA Journal

Lawsuit by Disabled Vet Claims Debt-Collection Paralegal Told Him He Should Have Died

Posted Oct 17, 2012 8:09 AM CDT

By Debra Cassens Weiss

A disabled veteran claims in a lawsuit that a paralegal at a debt collection law firm responded with profanities and ill wishes when the veteran asked for release of disability benefits found to be improperly frozen. According to the federal suit by Arizona veteran Michael Collier and his wife, Kim Collier-Dingman, the paralegal responded to Collier with this tirade: “F--- you! Pay us your money! You can't afford an attorney. You owe us. I hope your wife divorces your a--. If you would have served our country better you would not be a disabled veteran living off Social Security while the rest of us honest Americans work our a-- off. Too bad; you should have died.” Stars and Stripes and Courthouse News Service have stories.

The suit alleges violation of the Fair Debt Collection Practices Act by the firm, Gurstel Chargo. The complaint says an attorney for the firm agreed in court to return the money, seized to pay off a defaulted student loan. But in the parking lot after the hearing, the suit alleges, the lawyer told Collier he would have to get a lawyer in order to get his money back. 

Gustel Chargo says in a statement posted on Monday that the lawyer for the plaintiffs has not been able to supply information about the phone number from which Collier made the call, an approximate date of the call, and whether the paralegal was male or female. “To date, we have discovered no information to
substantiate the allegations, but our investigation continues,” the statement said. “Should these allegations prove to be true, we will take immediate corrective and disciplinary action.”

The statement adds that "under no circumstances does our firm tolerate the type of conduct alleged in the complaint."

Copyright 2012 American Bar Association. All rights reserved.

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TWENTYNINE PALMS (CBSLA.com) 

A crew broke into Alvin and Pat Tjosaas’ desert home and took everything after being directed by Wells Fargo to secure the structure.

The couple, however, didn’t have a mortgage on the home.

Alvin said the deputy sheriff said, “Good news, we know who took (your possessions)…Wells Fargo. Bad news, your stuff is all gone.”

All the married couple has now are three generations of memories.

Alvin, a retired mason, built the home with his father when he was a teenager.

“I know every inch, every rock…my mom mixed all the cement by hand,” he said.

Alvin and his wife would later bring their six children to their desert oasis.

“My little kids (would) come out here and their dresses were the same color as the wildflowers,” said Alvin.

A spokesman for Wells Fargo released a statement apologizing to the couple.

“We are deeply sorry for the very personal losses the Tjosaas family suffered as a result of their home being mistakenly secured,” said Alfredo Padilla. “We are moving quickly to reach out to the family to resolve this unfortunate situation in an attempt to right this wrong.”

Alvin and Pat remain distraught.

“When you put your heart into something…it makes me real sad. I’m just glad I have my sweetheart. We’ve been together a long time,” said Alvin.



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THE CONSUMERIST

We Cosigned Our Unemployed Son’s Student Loans. Now We’re Screwed

By Laura Northrup on August 24, 2012 8:00 AM

If you retain one piece of information from reading this site, let it be this one: never co-sign anyone's student loans. Not your spouse's student loans. Not your best friend's student loans. Not your nephew's student loans. Not even your own child's student loans. It is the worst possible kind of debt to assume on behalf of someone else. The balances can be huge, the debt can't be discharged in bankruptcy, and there's nothing to repossess. That's what anonymous parents M and D have learned, the very hard way.

When their son graduated from college, he had a lot of debt that loan owner Sallie Mae wouldn't allow him to consolidate. He also didn't have a job. Years of deferments, fees, and attempts at changing his payment plan later, their son is in default. The entire balance of the loan is due. And their son just lost his job.

We've had problems with Sallie Mae for years. We had co-signed our sons loans and they were sold to Sallie Mae after he graduated college. They didn't allow him to consolidate and after college my son found himself without a job. He tried to make payments on each of his 5 loans with them and took deferments. However, every time he called to try and get a change to an income based loan he was told he couldn't do that. They added fees, and charges and called him to make deals to change his payments (none of these were ever done in writing although he requested it was told they would send it in writing.) The so called "deals" just made things worst and many times there was no documentation of the changes for lower payments. My son is paying $1200.00 a month in Sallie Mae loans. He owns nothing and rents a room and barely has money to get food. Now, after helping my son over the years with payments they said that he missed an automatic payment and the account is in default.

We checked with the bank and they reviewed the activity on my son's account. They show no attempt made by Sallie Mae to get the payment. So, now they are coming after us with threatening phone calls and timelines. On top of that, our son lost his recent job. We are being told to pay the off the entire amount of that loan, $26,000. within two weeks. RIGHT...LIKE PEOPLE HAVE $26,000 LAYING AROUND! They are not willing to work with us nor retry his account for payment. Each time we call we get someone else and a different story but all threatening us. None of it has been done in writing, yet two people said they would allow us to pay 20% of the loan off within two weeks. Mighty nice of the jerks! Both people came up with different amounts of what was owed. Is there anyway to file grievences or sue Sallie Mae??

We are now being forced to declare Chapter 13 bankruptcy because we don't have $26,000.00 available nor the 8,000.00 they would take as a "good-faith" payment (good-faith in them---are you serious???). We are close to retirement age and this now ruins our credit which we have always worked so hard at keeping up. It also holds us from getting any loans or credit cards for 5 years. We are literally going to be working just to make payments to Sallie Mae and lose all credit with everyone else.

Sallie Mae now owns our lifes. Can anyone help us?

Once a loan reaches default, I'm not sure that even we have the power to help rescue consumers in distress. What we do recommend is that you try calling the Sallie Mae customer advocate line, a sort of executive customer service that readers have told us is more helpful than the regular representatives.

Also, the National Consumer Law Center's Student Loan Borrower Assistance pages offers clear-headed and helpful advice. Reading this entire site should be mandatory for every student about to take on student debt.



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By ETHAN BRONNER

Published: July 2, 2012

CHILDERSBURG, Ala. — Three years ago, Gina Ray, who is now 31 and unemployed, was fined $179 for speeding. She failed to show up at court (she says the ticket bore the wrong date), so her license was revoked.

The New York Times

Childersburg turned to the private sector for probation.

Enlarge This Image

Gina Ray still owes over $3,000, and potentially faces more jail time.

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    SAVANNAH, Ga. (CN) - A bounty hunter dragged a woman from her home and took her to jail, and when he found out he'd arrested the wrong person he refused to take her back home unless she gave him gas money, the woman claims in court.
     Becki Terry sued Savannah Bail Bonding and its John Doe employee, in Chatham County State Court.
     Terry claims she was at home with her fiancé on Feb. 27 when Doe knocked on the door and asked for her. Doe told her she was under arrest and asked her to come with him, without any explanation, according to the complaint.
     "Ms. Terry pleaded with the man: she told him that there were no charges pending against her," the complaint states. "The man, without explanation, grabbed her and handcuffed her. Ms. Terry was still undressed - her fiancé begged the man to allow her to clothe herself before he led her from her home. Once Ms. Terry was dressed, the man took her to his car."
     Doe took her to the Chatham County jail, where he identified himself to a corporal as a bail bondsman for Savannah Bail Bonding, according to the complaint. But the corporal found no arrest paperwork for Terry and told Doe to take her back home.
     "The bondsman refused to take Ms. Terry home unless she paid him gas money," the complaint states. "Ms. Terry called her fiancé, who was forced to pay the man $20 before he would let her free."
     Terry says she called Savannah Bail Bonding to demand an explanation, and it told her they were "sorry" and that this "happens all the time."
     She says the company refused to give her the name of the bounty hunter.
     She seeks compensatory and punitive damages for negligence, battery, false arrest, false imprisonment and infliction of emotional distress.



VERY IMPORTANT EXCERPT FROM 60 MINUTES -

"40 MILLION MISTAKES"

Do you know what is in your credit report?  Are there inaccuracies causing you to pay higher insurance rates, higher interest rates on your credit cards and mortgage, and may be preventing you from getting that new job or a job promotion.

CLICK HERE TO SEE THE 60 MINUTES PIECE "40 MILLION MISTAKES"