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I plan to sue insurance co.'s-PP noncompliance (FCRA§ 615.)


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I've been doing some research into the use of credit reports for insurance underwriting ever since I got declined for auto insurance from a preferred risk company a while back. From what I've read in other sites and in the FCRA, an insurance company has a permissible purpose in obtaining credit reports for insurance underwriting, but if any adverse action is taken such as placing you in a higher risk category, higher premium category, declining to write a policy for coverage etc, that would trigger the adverse action disclosure requirement. The rep for the insurance company who declined to insure me, actually refused to provide any reason for declining. I asked to get a written reason for this and she flat out told me she didn't have to provide anything to me! I copied this excerpt from a published letter of opinion by the FRCA staff:

The term "adverse action" is defined in § 603(k) of the FCRA, 15 U.S.C. § 1681a(k), a provision that was added to the FCRA as part of the Consumer Credit Reporting Reform Act of 1996.(1) With regard to the underwriting of insurance, "adverse action" means:

a denial or cancellation of, an increase in any charge for, or a reduction or other adverse or unfavorable change in the terms of coverage or amount of, any insurance, existing or applied for, in connection with the underwriting of insurance.

Section 603(k)(1)(B)(i) of the FCRA, 15 U.S.C. § 1681a(k)(1)(B)(i)

The legislative history of this section indicates that Section 603(k) is to be read broadly

In requesting many auto insurance quotes in the past year or so I've been told that they were rating me higher or at least not giving me the best rates due in part to my credit score. Even if they didn't use that as the main reason, the fact that they viewed my report in conjunction with the underwriting process would still trigger the disclosure notice requirement because it had been considered -even if just as a minor part- of the decision making process. The evidence of that is the fact that they pulled the report. (res ipsa loquitor comes to mind here) I have yet to receive one notice to this day.

Any thoughts on this would be appreciated.

The FCRA sections that would apply to auto insurance credit report users are:

§ 603 Definitions; rules of construction

§ 604 Permissible purposes of consumer reports

§ 615 Requirements on users of consumer reports

§ 616 Civil liability for willful noncompliance

§ 617 Civil liability for negligent noncompliance

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Wonder how many others she gave that misinformation to.

I argued using credit scores with my insurance agent too. He said the company uses the information gathered as an "indication" of potential claims, based on the national average. I argued it was a way reap in more money and keep it in the company - a company that's supposed to be not-for-profit.

People who have a higher credit score are on average, people who have the financial means to keep that kind of score. Meaning, they would be less apt to file a claim for minor damage, and pay for it out-of-pocket to prevent the insurance company from raising their rates for making a claim (usually 3 years).

Those of us (the majority) don't have that luxury and have little choice but to make an insurance claim and pay the deductable.

The whole existance of insurance is based on risk, and my spending habits in no way indicate my ability to safely operate a motor vehicle. They offer a discount for good credit, but not for safe driving. I haven't so much as been pulled over in more than 16 years. I've been trained in defensive techniques and emergency vehicle operation. I've never filed a single claim with an insurance company - my report is clear. I've been with the same insurance company for almost 19 years.

That's what they should be basing your rates on. He laughed like it some joke. I told him to shove it. If they were so interested in saving money, then I told him to stop sending me those stupid magazines I never read.

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I understand this from both sides, but I am still more on the side of the comsumer on this one. Please note I do work for an insurance company, I have heard all the so-called reasoning and some of it I can see as valid but not to the extend that my company as well as others have taken it. Most of the people I have talked to don't get it except for the highers ups that made that put the whole thing in place. I have been with my ins. company since I was 16 and have never missed a payment once. If I were to go to another company i would be punished for my low credit score but no one would take into acct many other aspects. So I really understand and in the end I agree with majority of the consumers who think it is crap, and in the end, I think most of the people I speak with who don't work in the underwritting dept agree with that. (that is just my .02 on the subject)

I would seriously go after the company that wouldn't give you at least a declination letter. Until recently, we didn't have to give out reasons why adverse action was taken, but we did have to give out a letter indicating who we got the info from, how to contact them etc.. I can't believe she could be that ignorant. I say.. go get em!

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I would seriously go after the company that wouldn't give you at least a declination letter. Until recently, we didn't have to give out reasons why adverse action was taken, but we did have to give out a letter indicating who we got the info from, how to contact them etc.. I can't believe she could be that ignorant. I say.. go get em!

I intend to go after those people for willful noncompliance and after the other companies for negligent noncompliance. I wonder if I can include them all in the same complaint and just differentiate the willfully noncompliant company from the others for different consideration by the court? I'll have to look into that some more. I've found lots of letters of opinion from the FCRA on this topic and many others at a site called Victims Of Credit Reporting. I'll post the link in this forum if it's allowed. Someone let me know please.

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That's what they should be basing your rates on. He laughed like it some joke. I told him to shove it. If they were so interested in saving money, then I told him to stop sending me those stupid magazines I never read.

If they pulled a report on you within the last two years and took any adverse action aginst you, you might have a claim if they never sent you an adverse action notice nor verbally / electronically disclosed all the info as required by the FCRA. I think I'll check with an attorney and see if it's worthwhile to have legal representation in this case as opposed to going pro se. Of course not being an attorney myself, anything I post here should be considered just my opinion and certainly not legal advice. :wink:

Info on requirements / duties of credit report users:

http://www.ftc.gov/os/statutes/fcra.htm#615

Info on time frame / sol for filing an action relating to this: http://www.ftc.gov/os/statutes/fcra.htm#618

I'm sure you all have this link, but I'll post it anyway

http://www.ftc.gov/os/statutes/fcra.htm

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Thanks for those links. Definately check them out.

It wasn't a matter of an adverse action as much as it was finding I didn't qualify for the "good credit" discount and not reaping the benefits for having a clear driving record and never having filed a claim (which my naive mind would assume is what auto insurance companies would want).

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Thanks for those links. Definately check them out.

It wasn't a matter of an adverse action as much as it was finding I didn't qualify for the "good credit" discount and not reaping the benefits for having a clear driving record and never having filed a claim (which my naive mind would assume is what auto insurance companies would want).

Sounds like you might have gone to the Victims Of Credit Reporting site and read the opinion on insurance underwriting reply to Mr. James M. Ball. To read this go to:

http://members.aol.com/victcrdrpt/

Then click on FTC Letters then scroll down 'till you see on the left side of the page:

Section 604(a)(3)©

Underwriting of insurance

Buchman (03-02-98)

Greathouse (10-20-98)

Ball (03-01-00)

Click on BAll to see what types of actions are considered adverse and what triggers the adverse action notice requirement. Very interesting reading.

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a

Even if they didn't use that as the main reason, the fact that they viewed my report in conjunction with the underwriting process would still trigger the disclosure notice requirement because it had been considered -even if just as a minor part- of the decision making process. The evidence of that is the fact that they pulled the report. (res ipsa loquitor comes to mind here) I have yet to receive one notice to this day.

The FCRA sections that would apply to auto insurance credit report users are:

§ 603 Definitions; rules of construction

§ 604 Permissible purposes of consumer reports

§ 615 Requirements on users of consumer reports

§ 616 Civil liability for willful noncompliance

§ 617 Civil liability for negligent noncompliance

I just got a couple of e-mail replies to my requests for previous auto insurance quotes from various insurance companies shown on my credit report, and they're telling me the quotes are no longer on file :? . Since I'm going to need some supporting documents, I've put the following letter together and I'm going to send it to all the insurance companies that wanted to either charge a higher premium or decline to write a policy. This way if I get the quote I can show the adverse action (and no subsequent required AA notice), and if they don't have it, then I can show they didn't have permissible purpose! :twisted: I'm gonna get 'em to pay for my high insurance costs somehow! :wink:

Insurance Company

Wherever, USA

To whom this concerns,

I recently viewed my Experian credit report and noticed an entry for an inquiry by your company dated xx/xx/xx. The FCRA provides for the use of consumer credit reports for permissible purposes as set forth in FCRA § 604-Permissible purposes of consumer reports [15 U.S.C. § 1681b]. I have no recollection of any transactions with your company as outlined in this section that would provide you with permissible purpose to access my consumer credit report. If you have documentation to the contrary - confirming that I authorized this access, please forward it to the address below.

With regard to permissible purpose for underwriting automobile insurance, the presumption would be that I initiated a request for an automobile insurance quote from you in order to provide you with permissible purpose to access my credit report. If in fact I contacted you for this purpose, please provide a copy of the quote. If you are unable to provide documentation supporting your permissible purpose for accessing my credit report, I must conclude that you had no permissible purpose for obtaining the report and that you are in violation of the FCRA.

Regards,

Mr. Maybeyoushoulduv Insuredme

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We are in the settlement stage of 2 lawsuits of mortgage companies who never sent us Adverse Action notices.

FIND A LAWYER.

PM me if you want the name of a FANTASTIC one who does lots of contingent basis lawsuits.

they have won a bunch of cases all FCRA cases to boot

they kick boooty

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FIND A LAWYER.

they kick boooty

Only if the cost vs. recovery makes it wothwhile. I've settled every claim for auto accidents I've ever been involved in entirely on my own (me not at fault and the adverse party(ies) having clear liability made it relatively easy to prevail), plus I've won two lemon law arbitrations without any representation even though they had attorneys. I've also helped family members do the same. I just need to research a bit before I consider going to court pro se because of the formal / procedural requirements and such. I'm thinking I can hopefully just get them to send the fines before going to court if they can't really refute what I'd be claiming. There's a gal (Christine) who among others, is filing a lot of pro se lawsuits and dealing with creditors regarding credit reporting violations and prevailing! (Her site linked below), but unfortunately her forums are -for the most part- closed. Lots of interesting reading there though!

http://www.creditforum.org/

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We settled one lawsuit today having to do with PP.. 4 grand

That's great! Congrats! I need to find an attorney to discuss this with - haven't looked into it yet. How long did the process take? Also, on contingency based situations an attorney usually wants 20-40 % of a settlement, but where attorney fees are awarded what amount of your settlement do they get? I'm more familiar with personal injury liability claims settlements.

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we did have to give out a letter indicating who we got the info from, how to contact them etc.. I can't believe she could be that ignorant. I say.. go get em!

That's the violation in question. I've yet to receive one notice from any company that used my CR then either declined to write me or quoted a high premium (verbal, electronic or otherwise as required-see below) . I'm in the process of first requesting proof that they had PP and if they can't show that by providing a quote, then I'll go after them for not having PP. Like you've done with your customers, the following is what's required to be provided. All caps by me for emphasis.

§ 615. Requirements on users of consumer reports [15 U.S.C. § 1681m]

(a) Duties of users taking adverse actions on the basis of information contained in consumer reports. If any person takes ANY adverse action with respect to any consumer that is BASED IN WHOLE OR IN PART on ANY INFORMATION contained in a consumer report, the person shall

(1) provide oral, written, or electronic notice of the adverse action to the consumer;

(2) provide to the consumer orally, in writing, or electronically

(A) the name, address, and telephone number of the consumer reporting agency (including a toll-free telephone number established by the agency if the agency compiles and maintains files on consumers on a nationwide basis) that furnished the report to the person; and

(B) a statement that the consumer reporting agency did not make the decision to take the adverse action and is unable to provide the consumer the specific reasons why the adverse action was taken; and

(3) provide to the consumer an oral, written, or electronic notice of the consumer's right

(A) to obtain, under section 612 [§ 1681j], a free copy of a consumer report on the consumer from the consumer reporting agency referred to in paragraph (2), which notice shall include an indication of the 60-day period under that section for obtaining such a copy; and

(B) to dispute, under section 611 [§ 1681i], with a consumer reporting agency the accuracy or completeness of any information in a consumer report furnished by the agency.

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they have won a bunch of cases all FCRA cases to boot

Can you ask one of these attorneys where I might find information regarding whether there is a time frame within which CR users must provide the required adverse action notice? For instance if an insurer declines to write a policy after pulling my CR, is there a certain amount of days they have to provide the adverse action notice? I would think there would be something like a 10 day notice requirement like the banks have to meet here- according to the finance division I checked with today. That way you can look into whether there may be something incorrect in your file in a timely manner. I can't find anything on this. After calling various divisions at the office of the state attorney general and the insurance commission, I still couldn't get an answer as relates to insurance companies. Any help is greatly appreciated

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Please note I do work for an insurance company,

I'm on a mission to push for some reform in the way insurance companies are allowed to do business these days. Auto Insurance was conceived with the idea of pooling small amounts of capital with others, having the funds necessary if any member of the group had an accident and could not afford to pay for the loss of his own. Of course those with less than perfect credit are those who would tend to file a claim. They rely on this pool to cover them in the event of an unfortunate accident so that they can get on with their lives as quickly as possible without having to worry about how their car will get fixed or that they're going to be sued. I see the way insurance companies do business nowadays (as opposed to what they started out being allowed to do business for) analogous to Baily Savings & Loan vs. Mr. Potter. It's all about money and how to get it and keep it. Nevermind taking care of the people making those premium payments that allow them to be in business.

From the movie script of It's A Wonderful Life

, you said, what'd you say just a minute ago? They had to wait and save their money (take years to rebuild their credit history) before they even ought to think of a decent home (before they even ought to think being considered for fair treatment on a policy). Wait! Wait for what? Until their children grow up and leave them? Until they're so old and broken-down that they....(until they have to get rid of their car 'cause they can't afford insurance or have to get a second job to pay their premium just to meet your financial goals....) do you know how long it takes a working man to save five thousand dollars? (to come up with unjustly high premiums?) Just remember this, Mr. Potter, that this rabble you're talking about (the non credit worthy)...they do most of the working and paying and living and dying in this community.(paying the premiums that keep you in business) Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath?

(work and pay and live with a fair policy premium?)

This next line is out of sequence, but it makes an important point:

"Why...here, you're all businessmen here. Doesn't it make them better citizens? Doesn't it make them better customers?"

I'm sure everyone wants to be responsible and carry proper insurance coverage to protect themselves and others. It's awfully hard for economically disadvantaged persons to accomplish this if even more financial burden is placed on them in the way of higher premiums.

In using credit history they're looking for ways to screen out those who because of economic circumstances are more likely to file a claim - for the sole purpose of keeping as much money as they can. There are many abuses of this credit use. For instance if they decide to review credit histories of their current policy holders, they may be inclined to raise the rates of those whose current credit score now allows for a rate increase, yet not offer any discount to those whose credit has improved since their initial policy was quoted. Nope wouldn't want to offset the newly increased rates on those undesireable non-credit worthy "rabble". Nevermind that maybe they've paid all their premiums on time for years without ever filing a claim. In fact these days if you do file a claim, you're likely to be dropped altogether and your claim denied as much as they can get away with. What really gets me steamed about my state as opposed to others is that we have mandatory insurance requirements and no legislation in place to support those who this financial burden has been placed on. Just because it is a legal requirment to carry auto liability insurance isn't of itself enough to ensure compliance. Automobile owners need legislation to protect them from insurance abuses having now been burdened with the liability coverage requirement. I'm sure I have my work cut out for me, but I'm going to do whatever I can to get something done here and nationally if possible. How does your state protect insurance consumers?

On an asside, I wonder how your insurance company rates on other issues -like payment of claims?

Find out here:

http://www.badfaithinsurance.org/indexdetaillist.html

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  • 3 weeks later...
Look under the

Equal Credit Opportunity Act

The entire mumbo jumbo is in there and it also shows what damages you can claim under that.

I finally got a reply today from the FTC on the adverse action notification timeframe as pertains to insurance companies. Unfortunately, it was not what I was hoping for. One of their attorneys said that there is no statutory time frame imposed within the FCRA (duh, I told them I already knew that), but that there are court cases where the ECOA Regulation B Sec. 202.9 Notifications - 30 day time frame was imposed. I'm going to make an appointment to see my congressman to address the issue of this glaring deficiency in section 615 FCRA. I think someting needs to be placed in that section that cites the ECOA 30 timeframe, or amend the FCRA to set the 30 day timeframe in section 615. Another possibility would be to amend the ECOA to include insurers / underwriters under the creditor definition. The big possible loophole for the insurance companies right now is that they are not clearly creditors as defined in the ECOA and maybe that's why they flout the law in not complying with the adverse action notice requirements.

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