We examine a recent Financial Ombudsman Service (FOS) article which reports on instances of errors on consumer credit files in the finance industry. This type of systemic error can and does occur in every industry. This is why the presence of Industry Ombudsmen is vitally important to assist the resolution of disputes. A report like this also serves to illustrate the prevalence of credit rating errors across not only the finance industry but the credit industry entirely, and should serve to demonstrate the great need for assistance with credit rating inconsistencies in the form of credit rating repairers – who are helping clients to both recognise and make successful complaints about their credit file errors.

By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs, and www.fixmybadcredit.com.au.

The Financial Ombudsman Service (FOS) received a number of complaints in the first quarter of this year relating to serious credit infringements being listed by a financial services provider (FSP) on clients’ personal credit files.

In the winter edition of its quarterly Circular publication, the Financial Ombudsman Service (FOS) reported (Systemic issues update – January-March 2012) on a number of complaints received in the first quarter of 2012 relating to serious credit infringements being listed by a financial services provider (FSP) on consumer credit files.

Here is an excerpt from an article by Money Management on the FOS findings, titled FOS concerned over credit infringement listings:

“FOS said it had contacted the FSP to advise that serious infringements had been listed even though the FSP had not sufficiently determined that applicants no longer intended to comply with their credit obligations.

FOS also advised the FSP it would review whether serious credit infringement listings had been made against other customers without a reasonable basis to believe they would no longer comply with credit obligations.

The FSP advised FOS that all the relevant disputes had involved third party tracing agents, but following a review of some of those listings FOS determined a high proportion had been made incorrectly and that the issue was systemic.

In addition to asking the FSP to advise of the removal of incorrect listings, FOS asked the FSP to formally consider, case by case, any claims for non-financial loss from customers whose listing was made in error.

In a separate but similar case, a complainant said his FSP had not correctly assessed his application for hardship assistance regarding a hire purchase agreement for which he had acted as guarantor.

FOS found the FSP had listed a commercial debt on the applicant’s personal credit file that could not be considered credit under the relevant legislation and was therefore an inappropriate listing.

Again, after a review FOS found a number of incorrect default listings and determined that the issue was systemic. FOS asked the FSP to correct the incorrect listings and to provide copies of its policies and procedures relating to default listing business guarantors on their personal credit files.”

This report demonstrates it is important to champion for accuracy in credit reporting. A listing which has been placed incorrectly or unlawfully on a consumer or business credit file – or one that simply should not be there should be challenged. The consequences are generally bad credit for at least 5 years – so it is always a point worth fighting for.

Most people put up with bad credit, even when it shouldn’t be there, because they find it too difficult to negotiate with their creditor. But having the correct information, going through the correct channels, with the right knowledge of legislation can make all the difference to a person’s chances of success at removing an incorrect listing.

What a credit repairer will do for a client who wishes to repair bad credit, is look at their credit file and determine through investigation whether there is an avenue for removal of the credit listing based on legislation, and negotiate in the right way, with the right people and through the correct procedures for the listing’s removal.

If you want to know more about credit repair – .visit the MyCRA main website www.mycra.com.au.

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