Tag Archives: credit scores

Credit Scores and Healthcare Bills

Little Rock       If you have every tried to borrow money from a bank or buy a house, you have been introduced to the strange and terrible world of credit scores that are often key factors not only in whether or not you get the loan or are able to buy the house, but in the interest rates you are offered which translates into thousands and sometimes tens of thousands of dollars you will end up paying over the life of the loan.   Way too frequently confronting the reasons black marks appear on your credit scores goes back to disputes, where you were convinced you were being ripped off and fought back and whether you won or lost you find only when seeking a loan that you were still knifed in the back by the rouge bill collector anyway.   Too often this happens with medical bills which after an illness come flying at you from every direction it seems and invariably from outfits that you never realized even knew your name, but now are billing you, calling you, and so forth.  Anesthesiologists must be the worst offenders since you met your doctor so have no clue who might be the guy is who is billing you for hundreds of bucks while you were out cold.

In a significant development reported by the New York Times, a major credit card score generator, VantageScore Solutions, “has decided to ignore collection actions on credit reports – more than half of which are typically tied to medical debts – as long as the collections are paid.”  That seems exactly right!  The example in the story involved a woman who was going to pay $33,000 in extra interest on a home loan because she had mistakenly used her dental card rather than her medical card to pay a $700 charge.  She fixed it when her mistake became known and paid with the right card, but meanwhile was burned on her credit score she only found out later when it bumped her interest rate up.  Bam!

I can relate.  A couple of months ago, running to pay off my bills before going out of town, I threw the envelopes in the mail to Cox Cable and to CitiMortgage where I’m still paying a note on a fishing camp lost to Katrina 7 years ago.  A month later I got a foreclosure notice from CitiMortgage, even though I had paid the next month, and had ignored several of their envelopes when I returned home assuming the letters had crossed in the mail with my check.  I called them with fire breathing out of my nostrils.  They claimed they had never gotten the payment.  I told them the date it was sent.  I thought we worked it out at the end of the argument when we agreed I would stop payment on the earlier check and send them a new one.  If they got it right away, she claimed she would not report me to the credit bureau.  There was discussion of where the sun doesn’t shine.

A couple of days later someone from Citi left a phone message at the house that they had deposited my hundred dollars.  The same day a letter came in from Cox returning the check to CitiMortgage which they could not deposit.  Ok, you are with me now.  I had put the wrong checks in the wrong envelopes.  Then I got my monthly payment notice from CitiMortgage showing a random $100 they had applied to principal payment and a late charge.

Yep, back on the 800# fired up again.  Citi explained that it is their policy to cash any and all checks that come to them no matter who they are written to.  Fortunately Cox Cable and most other businesses, and even banks, don’t have such a ravenous practice.  I said you can’t have it both ways by taking my money, depositing it wrongfully, and sending me a late charge.  After she talked to her boss, they waived the late charge.  I let them keep the money though they offered to return it, since they were busted.

Mistakes happen.  That’s why we have “I’m sorry” as part of our common language.  When we’re wrong we make it right.  Unfortunately, when they are wrong, they make us pay.  VantageScore Solutions needs to be the model here for stopping these quick trigger credit and corporate culprits.

Credit Scores Audio Blog

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Wells Fargo Racial Steering and Discrimination Settlement with Justice Department

New Orleans    The recently announced settlement between the Department of Justice and Wells Fargo Bank saw them pony up $174 Million to provide restitution to 34,000 customers because of racial discrimination in lending rates and steering them into toxic subprime rates caught my eye and brought me to full attention.  This might be a case of justice delayed not having been denied.

Some years ago with ACORN after settling with Ameriquest (remember them?) and HSBC on predatory lending, Wells Fargo had come into our sights as the next biggest offender.  We found a zillion cases of families who would have been eligible for lower interest conventional loans that had ended up in subprime disasters and a lot more.  The highlight of ACORN’s National Convention in 2004 had been a march of 1500 to their skyscraper in Los Angeles only blocks away from the stunningly dramatic opera building designed by Frank Gehry.   There we handed Wells executives copies of the suit we had just filed against them on these grounds.  Based on a lot of factors including a change in various laws around class actions we finally ended up settling on a California-only basis for thousands there to receive restitution and agreement on “best practices” that would be implemented by Wells to prevent this from happening in the future.

Almost exactly one year ago in July 2011 Wells Fargo settled with the Federal Reserve for over $80 million for essentially ignoring everything that they had committed to in our settlement from 2004 to 2008.  Now one year later and almost $100 million more they are having to settle with Justice on a pattern of discrimination and steering, which would have also been precisely what they swore to us they were not doing once again.

I reached out to Sarah Siskind with Minor, Barnhill out of Chicago and Madison, who along with Neil McCarthy of San Francisco, had represented ACORN on the Wells matter as well as the earlier HSBC settlement.  My questions were:  How did Justice get them and was there anything we would have missed earlier?  Sarah speculated that with Justice records subpoena power they were able in all likelihood get access to all of Well’s borrower “profile” data including credit scores and crunch the numbers to more clearly see – and prove –the pattern or discrimination and steering by Wells into higher interest “products.”   In 2004 we only got lip service from Bush’s Justice Department on the issues.  Having a real Justice Department now obviously makes a difference because it means real investigations that even the “stonewall first” mantra of the Wells legal team and outside attorneys can’t prevent.

Of course in the Wall Street Journal Wells goes out of its way to continue to deny with every breath that they were really involved in any racial discrimination.  They seemed to have invoked the famous Richard Pryor defense:  “Are you going to believe me or your lying eyes?”

Sarah said that some were saying Justice might have settled to quickly and cheaply with “non-admissions” language, but that didn’t trouble her, and it doesn’t trouble me either.  What troubles me as we look more and more at banking in the light of other “criminal enterprises” is that this repeated litigation and settlements with ACORN before 2004 and now with both the Federal Reserve (in what was a record settlement for them 1-year ago!) and now with the Department of Justice is also evidence of a culture of discrimination and a management system that supports and encourages any means necessary, including possible racial bias, to achieve short term goals.

Somewhere in their bunker by the Bay, Wells executives need to finally learn a lesson that they seem to want to assiduously avoid no matter the hundreds of millions of dollars in fines and clean house to rid themselves of this continuing taint of bias and discrimination.

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