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Fact 004
What is a Credit Bureau?
A Credit Bureau is a business that provides consumer's credit information and creditworthiness to banks and all types of companies seeking such information so as to make informed decisions to extend credit. In developed countries it can also be used, and weighed at a job interview or even an application merely for insurance coverage, the latter of which has stimulated much debate as to the driving ability of a consumer.
Reputable Credit Bureaus are NOT Collection agencies who charge a fee, at times as a double edged sword by manipulating commissions, charges and nuisance fees from BOTH debtor and Creditor, which when combined can climb as high as 70% depending on the account's age analysis.
In civil societies, Credit Bureaus use a combination of various qualifying factors which instantly give a CREDIT SCORE on any consumer, and consumers then have an interest in improving their score by cleaning up negative issues and being credit worthy. Late payments or non-payments of past debts show up on credit bureau records and hurt a person's credit rating. This could cause an individual with a bad credit history to not be able to receive a loan or credit card in the future. PIRG is seeking to have this same SCORING system introduced in Trinidad & Tobago.
HOW ARE CREDIT BUREAUS PAID?
Reputable Credit Bureaus sell an information package which is classified as “A FILE” to banks and companies. This file provide vital information on a potential borrower, including, but not limited to: Name, Date of Birth, Age, Address, Spouse, Employment, an identification number like a Driver's Permit or other accepted forms of national identification, and a Credit History which list the borrower's creditors and payment history they report to the credit bureau under their agreement. These Files” may also contain legal information like Liens and Judgments, or any other information on the potential borrower's ability to repay. In other words, Credit Bureaus SELL your information.
HOW IS MY CREDIT INFORMATION COLLATED?
While reputable Credit Bureaus may also offer Investigative, Verification, Trace and Skip services, they generally rely on its members or customers like banks, trading firms, insurance companies, etc to provide them with a consumer's information which they store and sell. HOWEVER, unlike fly-by-night so called “Credit Bureaus” operating in Trinidad as predators, in North America and Europe , governments have mandated such bureaus to be transparent with their database information ensuring it is NOT restricted solely to firms seeking such information. In other words, consumers have an inalienable RIGHT TO KNOW what is in their files and being reported on them. This way, if such information is incorrect, the consumer has a RIGHT to:
• CHALLENGE IT
• DENY IT
• DISPUTE IT
• EXPLAIN OR DEFEND IT
• EVEN CORRECT IT
• SEEK LEGAL ACTION against such provider if such information being sold and traded is willful or malevolent as can be the case in Trinidad & Tobago where such information is treated with stealth as “CONFIDENTIAL” so the consumer can never improve himself.
TRINIDAD'S SO CALLED “DEBT COLLECTORS” & “CREDIT BUREAUS”
Following the closure of the reputable Better Business Bureaus ( BBB ) in the 1970's a void was created and quickly filled by two clever individuals who have entrenched themselves as the pillar of debt collection services in Trinidad & Tobago. They cleverly approached reputable, albeit gullible business selling them a compilation of “BAD DEBTORS” which they obtained more as predators while charging exorbitant fees from BOTH Creditor and Debtor in an unregulated industry in virgin territory notoriously lacking in consumer rights and protection. These men are now both extremely wealthy individuals, with one diversifying in various successful businesses and even advertising as a money lender.
While they have unquestionably been fortunate all the way to the bank via predatory practices, their method of rampant abuses while trampling on the rights of the poorer, even uneducated class to fill their own pockets has NOT been challenged as consumers in Trinidad were not aware of their rights in a society where they are deemed having no rights once assumed wrong. And to add injury, one such operator went so far as to breed fear into helpless and poor consumers first by scaring them about “ A BIG BAD BOOK” , then “ A BIG RED BOOK” , and as if that was not insulting and egoistical enough, they insolently invented a ferocious logo of a dog named Maljo aided and abetted by an equally unscrupulous and indifferent business community overly concerned about their bottom line than about the inherent rights of the consumer they could no longer milk for profits. Again , one such operator who strangely enough is also an attorney, migrated to Canada where he maintains strong collection correspondents and knows for a fact his collection tactics perpetuated on Trinidadians would NEVER be tolerated in that civil society where consumer's rights are assured by their government, and also respected by the business community. Further this “Lawyer/Debt Collector who was at one time the preferred collector for communications provider TSTT has engaged STEALTH and DECEIT by registering JUDGMENTS against many consumers without proper if any service at all as required by LAW . This way he has earned MILLIONS more in legal fees for a job not done, while consumers NEVER had the chance to defend his action, only to later find out they cannot get a new loan because “YOU HAVE A JUDGMENT REGISTERED AGAINST YOU”.
Both these two players and their glutton clients cared not one iota about the rights of consumers as they unconscionably did about taking advantage of a country notoriously lacking consumer RIGHTS and protection, and more so about filling their own pockets which incidentally catapulted one into a money lender now.
And, unless ALL the players know how the game is played in a field where the goal posts remain stationery and not promote their unilateral best interest, then what they are offering the people of Trinidad & Tobago is definitely NOT a Credit Bureau.
Further, a new supposedly state of the art entity calling itself TRANS UNION recently opened its doors at XC Carlos Street, Woodbrook, BUT , quite unlike its transparent namesake in the United States, the only people who knows about its existence and objectives is its commercial customer base comprising Banks and trading firms to whom they SELL your information. Again , quite unlike its transparent American namesake, nothing is available online so consumers can exercise their inalienable rights and know what is being reported on them for a fee, nor are the banks and other companies who deny them credit have an iota of obligation or responsibility to inform them what was obtained, and importantly , WHERE it was obtained.
CONSUMER EDUCATION & RIGHTS
Believe it or not, Trinidad 's credit system is relatively new, with Credit Cards being introduced only around the 90's before filtering down to the masses, albeit still very limited. As such, consumers, whether by design or sheer insolence are NOT educated about what is expected of them to properly manage their finances and show responsibility to their credit providers. Credit providers and more so banks in Trinidad together with those so called “Credit Bureaus and debt Collectors” never saw it as being necessary to respect the very consumer as a pivotal player by educating them on how the credit game is played the same way say an appliance or car manufacturer would educate a consumer on the best use of their products and services.
The legal system in Trinidad is heavily stacked in favor of the Credit Provider with little if any rights upheld for the consumer. At the collapse of the national economy in the mid 1980's, the then indigenous Workers Bank after realizing they could no longer meet their bottom-line by continually milking consumers a predatory 14 to 18% Mortgage interest vindictively commenced their unprecedented practice of NAMING & SHAMING its former borrowers by publicly listing their Properties, Addresses, and BOLDING their Names in upper case as if selling the consumer and not their property so as to rightly recover their balances, at times paid up by over 60%, believing they could shame retrenched, unemployed, yet decent and honest people into paying their lenders at a time of a national economy collapse similar to American the great depression of the 1930's. This despicable and unprecedented tactic only destroyed families humiliated with a new public shame, and created a greater debacle of callous and non-caring behavior in the even poorer class.
Willfully embarrassing you even further, Banks were notorious for publishing your name under REQUEST TO CONTACT advertisements if your credit card fell into arrears, even in many circumstances where the card was stolen while the banks refused to compensate the original card holder. They would repossess your vehicle and boldly list the entire license plate when they could still sell your vehicle by listing the series, make and model, and still recover their losses. The most stubborn and vindictive advertiser of this notorious and uncivil NAMING & SHAMING abuses has been our own First Citizens Bank ( FCB ), an indigenous institution developed to assist the “Small Man”. While the Indian and French Creole banks have seen the merit in the numerous letters from PIRG to cease and desist from such destructive trade practices, FCB continues their destructive pattern of NAMING & SHAMING black people rather than educating and counseling them to be responsible citizens and better players in the credit game.
The most ludicrous and despicable of the lowest of low was the March 15 2003 whole page newspaper advertisement headlined “ REQUEST TO CONTACT” bearing the photos, Yes, PHOTOS of 27 inexperienced and probably uneducated borrowers who at the time of borrowing were led to believe their passport size photos was for their files only. Behind this shameless act was government's micro lender NEDCO , an agency mandated to assist the poorer class to venture into cottage industries. Despite PIRG'S instant and strongly worded letters to Nedco, the newspapers who were shamelessly profiting from this, and Nedco's line minister, one Larry Achong the then Minister of Labour, the advertisements continued to flourish until a personal appeal from PIRG was made to then Minister of Legal Affairs, the Honorable Camille Robinson Regis who contacted the Express, and whom PIRG asked for a written undertaking they would no longer accept such destructive and counter productive advertisements.
To counter these nefarious trade practices, PIRG has repeatedly called upon government to enact the following:
• FAIR DEBT COLLECTION PRACTICES ACT
This would limit both the method and manner in which banks, financial institutions, and collection agencies seek to collect from a debtor. Under this act, a mortgagor's property can be sold without having to publicly humiliate the borrower, while fair methods can be used in the collection of a debt. Presently, some banks forward collections to a particular collection agency charging both bank and debtor collection fees, while insisting that the bank instruct debtors to pay them direct. Consumers must always know their rights in being fully aware that the bank cannot refuse accepting payments from them.
• FAIR CREDIT REPORTING ACT
This act will govern how consumer's credit information can be obtained, used, and distributed, and makes it mandatory that a bank or financial institution issue in writing its refusal to grant you credit, and, if information was obtained from external sources on which the lender based its decision, they must inform the client where they got such information, and exactly what was reported. Clients have an inalienable “RIGHT TO KNOW” what is being said about them, and nothing is “confidential” to the extent of excluding the consumer in question.
• BANKRUPTCY PROTECTION ACT
Under present law, you the debtor have virtually no rights in protecting your assets from a Creditor. The business you started with the best of intentions can go wrong while present laws grant all rights to your Creditor to snoop down with stealth, appoint receivers acting only in their employers interest to sell off your assets to pay the Creditor. Your $600,000 Company can be sold for $80,000 while the receivers pay themselves hefty fees and give the bank the balance as they can always sue you for the deficiency. Financial reverses should not necessarily mean the end of your business, and a proper Bankruptcy Act with a Court Appointed Trustee favorable to both debtor and creditor would establish rights and remedies for both. It will also establish orderly payment of creditors, rather than rewarding the swiftest, or the creditor that is able to exert the most pressure on the debtor. Bankruptcies can be categorized in various chapters like Liquidation, Reorganization, Debt Adjustments, etc. For instance, a Reorganization chapter would give you time through a court appointed trustee to re-establish your business before your often vexatious bank/ creditor rushes in with the avaricious objective of collecting his debt while discounting your assets and destroying you in the process, even suing you for deficiency.
• CREDIT ACCESS AND USE – EQUAL RIGHTS
This act guarantees you equal rights to credit with anyone who regularly offers credit, including Banks, Finance Companies, Credit Union, etc. When you apply for credit, a creditor may not deny you credit if you have the ability to repay, nor may they be prejudiced because of your sex, race, or religion.
Please view the following three major American Credit Bureaus:
www.experian.com
www.transunion.com
www.equifax.com
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