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Credit Reporting Mistakes More Common Now than Ever in Canada

22 November 2012

Have you checked your credit report lately? Have you really checked it? Gone over it with a fine-toothed comb and a magnifying glass? If not, it’s time to do so. An investigation by CBC News has just found that the number of mistakes on the credit reports of Canadians are up to a dangerous high. And those mistakes are preventing otherwise qualified individuals in the country from getting loans; and it’s costing them a lot in interest charges.

The news investigation found that in just the past few years, over 500 complaints have been lodged with provincial consumer affairs across Canada. And one such agency in B.C., Consumer Protection BC, says that there have been 341 calls regarding inaccurate credit reports just in the past three years. And Dan Barnabic, a paralegal in Toronto, has said that approximately one-third of his 3,000 clients have found problems contained within their report – problems that are a result of inaccurate reporting. These numbers suggest that the 500 individuals CBC found could only be a fraction of those that have glaring errors on their report.

The problem doesn’t come from the credit reporting agencies themselves, such as Equifax Canada or TransUnion Canada. Rather, it comes from the department stores and the other creditors that have allowed their customers to borrow from them. What will happen is that one account is reported to an agency as overdue or inactive. The customer. wanting to do the right thing and get themselves back on track, pays the bill and asks the credit reporting agency to report the payment – along with the new “in full” or “paid” status – to the credit reporting agency.

Many times, these numbers show, that’s where it ends. There is no call made to the credit reporting agency, and that overdue amount and bad credit rating stay on the person’s credit report. The next time they then go to apply for a mortgage,  a line of credit, or even get a car loan, they’re turned down because they still have that black mark on their report. A mark that shouldn’t even be there.

“You are what your credit is,” says Mr. Barnabic. “And when you discover something that actually does not belong to you…that will actually prevent you from getting credit, it’s devastating. It turns into a horrific situation that people lose sleep over.”

But getting anyone to own up to the mistakes, or even implement policy to keep them from happening, is a losing battle it seems. Paul Le Fevre, director of operations at Equifax Canada, says that it is the companies’ jobs to ensure that they’re submitting the correct information for their clients.

“What we rely on our members to do,” he says, “is to remove that information or amend that information accordingly within the electronic media that they send to us.”

Much of the same, albeit a very vague sentiment, came from TransUnion, who simply said that they try to “maintain accurate information on every consumers’ TransUnion credit report.”

There are some things that can be done to prevent errors, such as the fines most provinces will impose if inaccurate information is reported. But, says Mr. Barnabic, these fines are hardly ever actually put into place, leaving no responsible except for the consumer that worked very hard at repairing their credit. And, he says, the federal government doesn’t seem to be doing too much either.

“Our elected government so far has showed very little interest in improving the system and actually getting the consumer on equal footing with the financial sector,” he says.

His solution is to adopt the system currently seen in the United States, where credit bureaus must by law look into any complaints within 30 days of receiving them.

What do you think? Would this help with the problem of incorrect credit reports? And how likely are you to obtain a copy of your report and look it over, after hearing this latest news?

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