10/7/2015Credit Report Settlement Threatens Automated Ticketing Industry
Settlement prohibits credit reporting agencies from lowering credit scores over unpaid photo tickets.
In many states, the only penalty for failing to pay a red light camera or speed camera ticket is a black mark on a driver's credit score. That leverage is no more, thanks to a $6 million settlement reached between thirty-one state attorneys general and credit reporting agencies Equifax, Experian and TransUnion. The sweeping agreement will protect consumers by limiting the ability of for-profit photo ticketing companies from affecting the credit of vehicle owners.
"We've had many complaints over the years about credit reporting agencies not fixing their own mistakes on peoples' credit reports, and it has been difficult, and in some cases impossible, for consumers to push them to correct it," Attorney General Tom Miller said in a statement in May. "Credit reports are vital to consumers. They can affect peoples' abilities to secure jobs, homes and vehicles. These reports must be accurate."
As first reported by the Cedar Rapids Gazette, Miller confirmed that the agreement does apply to Iowa's red light camera and speed camera programs. A spokesman for Miller's office directed TheNewspaper to a section of the settlement that explicitly covers citations.
"The credit reporting agencies shall prohibit collection furnishers from reporting debt that did not arise from any contract or agreement to pay (including, but not limited to, certain fines, tickets, and other assessments)," section E(1)(c) states.
In states where there is no specific law prohibiting the reporting of citations to credit agencies, vehicle owners could find out after applying for a loan that their application was denied over a photo ticket that they never received, or in some cases that was the result of a mistaken camera reading. Legally, the window the challenge the underlying ticket would have expired, leaving innocent vehicle owners without recourse.
The agreement is retroactive, meaning existing credit black marks from unpaid tickets must be cleared. Equifax, Experian and TransUnion complied the demands of the attorneys general in the face of a multistate legal action alleging violation of federal and state consumer protection laws over the industry's deceptive and unfair practices. By agreeing to adopt reforms and paying the states $6 million, the credit reporting agencies will have all potential charges dropped.
The agreement applies to the states of Alabama, Alaska, Arizona, Arkansas, Florida, Georgia, Hawaii, Maryland, Massachusetts, Michigan, Missouri, Nebraska, Nevada, New Mexico, North Carolina, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Maine, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Texas, Vermont, and Wisconsin.
A copy of the settlement agreement is available in a 3.5mb PDF file at the source link below.