Regulating the credit reporters.

• Author: Waren, William T.

States are aggressively regulating credit reporting agencies, but the federal government is threatening pre-emption.

Robert J. Corbey has a horror story. On June 8, 1991, Corbey signed a contract with a home improvement firm for installation of vinyl siding on his house. He paid $500 down and sought to finance the remainder of the $2,000 cost.

Corbey says that on June 12, 1991, a representative of Commercial Credit Corporation called and questioned him about an IRS lien filed at Fairfax City Courthouse in Virginia on property that he allegedly owned with his wife Ann. He was also questioned about a $1,000 monthly mortgage and his residence in two locations in Virginia.

According to Corbey, "I have no wife since I've been a widower for over 17 years and never had an IRS lien anywhere, anytime. I have not had any mortgage payments since my house was paid in full years ago. I never lived anywhere in Virginia, but have lived for 34 years in one house in Rockville, Maryland."

Despite his protests, Corbey's loan application was rejected, he says, because of an erroneous credit report furnished to the lender by Equifax, one of the big three credit reporting firms.

Corbey tried to correct the errors in his credit report. "Three months after my request I received a form memo (unsigned) including my credit report. It was replete with errors and 90 percent false. I contacted the creditors and organizations listed on 'my' report and determined that all information except for three items were not mine and belonged to someone else."

Corbey wrote Equifax, requesting that the errors be corrected. But according to Corbey, "Equifax prepared and sent me three more erroneous credit reports under my name, and each had a different social security number. One of the reports had my social security number correct but all three had someone else's credit history."

Corbey then wrote Jack Roberts, the president of Equifax, and talked by phone with Labat R. Yancey, vice president of consumer affairs. Yancey later wrote to say that Corbey's credit history had been corrected. Corbey confirmed that the credit history was now correct but his social security number was wrong. After five more reports, the social security number is still wrong. "They took almost a year to straighten out my credit record," says Corbey. "It was a horrible experience, extremely frustrating. I felt like I was fighting Goliath."

Robert Corbey's story is not unusual, says Michelle Meier of Consumers Union (CU). She regularly receives complaints from consumers who say they lost money, were denied credit or lost a job because of erroneous credit reports. In fact, credit report errors are the most frequent form of consumer complaint received by CU.

State legislatures and state attorneys general have responded rapidly to such reports. Twenty states now have laws that regulate credit reporting bureaus, according to CU. In 1992, CU reports, at least 30 states considered legislation related to credit reporting. Over the past two years, state attorneys general have settled major lawsuits against credit reporting agencies in return for consent decrees to ensure the accuracy and privacy of information in credit reports.

The...