Category Archives: invasion of privacy

Equifax’ “Inadvertent Error” Results In Problems For Washington Resident

A Washington man was far from happy to find credit reports in his mailbox that were apparently intended for a bunch of strangers. To make matters worse, he says he can’t get access to his own report to make sure there aren’t unexpected debts attached to his credit history.

The recipient of these troublesome missives had contacted Equifax in an effort to clean up his credit earlier this year, and instead received dozens of envelopes for three days in a row, filled with strangers’ credit reports. Letters attached to the reports informed him that he owed a long list of debts.

“Ten or 15 student loans, 10 houses, many cars; I’m starting to really freak out,” he told the news station.

Then in March, he got another letter from Equifax, saying that the company had “inadvertently mailed” certain consumer information to incorrect individuals. The mixup was due to a “technical error,” the company said, and there had been no evidence of any criminal wrongdoing. The letter also asked for the papers to be returned, which the man sent through his lawyer.

Since then, he says he’s tried to get his credit report from Equifax — you know, just in case those strangers are still haunting his records — but that Equifax hasn’t come through.

“I want everything cleared. I mean, there are hundreds of pages, and each page says I’m responsible for everything. As far as I know, it’s still on my credit,” he said.

Equifax, when asked how such foolishness could happen, replied as follows:

“Earlier this year, a technical error of short duration caused certain consumer information to be released to an isolated number of other individuals. We conducted a full investigation, identified the individuals who had received this information,” including the man who received all those credit reports, “and retrieved it,” Equifax said. “We contacted all impacted consumers to whom the information belonged and have mitigated this situation.”

The man has now hired an attorney to help him file a lawsuit against Equifax, accusing it of violating the Fair Credit Reporting Act.

“We can be pretty sure that whatever procedures they have in place are not reasonable to protect the accuracy of our information,” she said.

Such “inadvertent errors” are nothing new. Loan servicer Ocwen has been known to send out loan modification packages to borrowers who did not request them, and then pester the borrowers for not returning the completed application. When pressed for an explanation, Ocwen, like Equifax, could do little better than point to an “inadvertent error” accompanied by a bit of indignation that a consumer had had the temerity to challenge them.


Austin, TX Payday Lender “EZCORP” Has 130,000 Loans Extinguished!

On December 16, 2015, the CFPB announced a consent decree with EZCORP, an Austin, Texas-based payday lender.  The consent decree included $7.5 million in redress to consumers, $3 million in fines, and the effective extinguishment of 130,000 payday loans.  In July of this year, EZCORP announced that they were exiting the consumer lending marketplace.

The consent decree alleged a number of UDAAP violations against EZCORP, including:

  1. Made in person “at home” debt collection attempts which “caused or had the potential to cause” unlawful third party disclosure, and often did so at inconvenient times.
  2. Made in person “at work” debt collection attempts which caused – or had the potential to cause – harm to the consumer’s reputation and/or work status.
  3. Called consumers at work when the consumer had notified EZCORP to stop contacting them at work or it was against the employer’s policy to contact them at work.  They also called references and landlords seeking to locate the consumer, disclosing – or risked disclosing – the call was an attempt to collect a debt.
  4. Threatened legal action against the consumer for non-payment, though they had neither the intent nor history of legal collection.
  5. Advertised to consumers that they extended loans without pulling credit reports, yet they often pulled credit reports without consumer consent.
  6. Frequently required as a condition of getting the loan that the consumer make payments via electronic withdrawals.  Under EFTA Reg E, requiring the consumer to make payments via electronic transfer cannot be a condition for offering a loan.
  7. If the consumer’s electronic payment request was returned as NSF, EZCORP would break the payment up into three parts (50% of the payment due, 30% of the payment due, and 20% or the payment due) and then send all three electronic payment requests simultaneously.  Consumers would sometimes have all three returned and incur NSF fees at the bank and from EZCORP.
  8. Informed consumers that they could stop the auto-payments at any time but then failed to honor those requests and often indicated the only way to get current was to use electronic payment.
  9. Informed consumers they could not pay off the debt early.
  10. Informed consumers about the dates and times that an auto-payment would be processed and regularly did not follow those disclosures to clients.
  11. When consumers requested that EZCORP stop making collection calls either verbally or in writing, the collection calls continued.

Penalties for these infractions included:

  1. $7.5 million fine
  2. $3 million pool to provide redress to consumers for NSF fees for electronic payments practices
  3. Barred from at-home and at-office collection efforts
  4. 130,000 accounts – what appears to be the entire EZCORP consumer lending portfolio – is no longer collectable.  No collection activity.  No payments accepted.  EZCORP must “amend, delete, or suppress any negative information relating to such debts.”

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