Fraud victim wants repo off credit report

[bearflag70]

What is the name of your state? California

FACTS: As a result of fraud, truck owner thinks she is trading in a truck for a car at an auto dealership. However, auto dealership employee is possibly involved in a scam and fails to transfer truck title out of owner's name or to take care of the oustanding balance of the truck loan, as promised.

Long story short, Truck loan compand contacts truck owner for payment. Truck owner tells loan company that she traded the truck in, conducts investigation, and uncovers scam.

Truck loan company repossesses truck from another person who was using it after the alleged "trade-in". Loan payments are still outstanding in truck owner's name, but truck owner can't afford to pay auto loan AND truck loan simultaneously. Truck lender resports repo on truck owner's credit report.

QUESTION: Truck owner intends to sue auto dealer for the scam. However, how to get the repo off the credit report if the case settles against auto dealer?

[Veronica1228]

Originally Posted by bearflag70

What is the name of your state? California

FACTS: As a result of fraud, truck owner thinks she is trading in a truck for a car at an auto dealership. However, auto dealership employee is possibly involved in a scam and fails to transfer truck title out of owner's name or to take care of the oustanding balance of the truck loan, as promised.

Long story short, Truck loan compand contacts truck owner for payment. Truck owner tells loan company that she traded the truck in, conducts investigation, and uncovers scam.

Truck loan company repossesses truck from another person who was using it after the alleged "trade-in". Loan payments are still outstanding in truck owner's name, but truck owner can't afford to pay auto loan AND truck loan simultaneously. Truck lender resports repo on truck owner's credit report.

QUESTION: Truck owner intends to sue auto dealer for the scam. However, how to get the repo off the credit report if the case settles against auto dealer?

ANSWER: Truck owner should hire an attorney to take care of all aspects of case.

[panzertanker]

Originally Posted by Veronica1228

ANSWER: Truck owner should hire an attorney to take care of all aspects of case.

Succint....

[bearflag70]

Originally Posted by Veronica1228

ANSWER: Truck owner should hire an attorney to take care of all aspects of case.

Agreed...

but generally speaking, what would be the process, if any, for reversing an adverse credit entry that stems from fraud on the borrower?

1. Is this something handled internally by the credit bureaus?

2. Does the truck loan company have to agree to reverse the item on the credit report in light of evidence that it all stems from a fraud?

3. The entry is valid and will remain, but the fraud perpatrator must pay damages for the truck owner's now ruined credit?

4. Other?

It doesn't seem right that the item should be allowed to remain on a credit report of the truck owner if truck owner was duped into not paying on the loan.

[Veronica1228]

Originally Posted by bearflag70

Agreed...

but generally speaking, what would be the process, if any, for reversing an adverse credit entry that stems from fraud on the borrower?

1. Is this something handled internally by the credit bureaus?

2. Does the truck loan company have to agree to reverse the item on the credit report in light of evidence that it all stems from a fraud?

3. The entry is valid and will remain, but the fraud perpatrator must pay damages for the truck owner's now ruined credit?

4. Other?

It doesn't seem right that the item should be allowed to remain on a credit report of the truck owner was into not paying on the loan.

Your questions are difficult to answer because the first step that must be taken is to prove that this entire scenario is in fact fraud. Once you hire an attorney and win your case, you will then have the proof you need to have this item taken off of your credit report.

It is also difficult to say what is usual, because your case is quite unusual. Most fraud that we deal with here stems from Identity theft, which your case clearly is not. Hire a lawyer, win your case, take it from there.

[bearflag70]

[I am an attorney (solo) and this is a potential case I am considering taking. The fraud case against the auto dealer looks pretty good, but I was looking for a general tip on potentially reversing the negative credit report entry before I start digging through the legal research. Thanks.]

Originally Posted by Veronica1228

Your questions are difficult to answer because the first step that must be taken is to prove that this entire scenario is in fact fraud.

...and there's the rub...

If the truck owner sues the auto dealer and then settles the case short of a judgment that definitively says, "Yup, that was fraud", the negative credit entry might not come off due to a lack of evidence.

I suppose the truck owner could request the truck lender and credit bureaus remove the negative item from the credit reports and submit evidence of fraud to them. If they do not agree to reverse the item, the truck owner could sue the lender and credit bureaus for declaratory and injunctive relief to have the court remove the items.

[Veronica1228]

Hold on a sec. The advice I have provided to you thus far is based on my experience and knowledge as a banker. Because your case is more complicated than what we usually see, I've sent a message to an attorney at this site who can probably help you better.

Hopefully, he'll be along in a bit.

[bearflag70]

Thank you!

[JETX]

Originally Posted by bearflag70

[I am an attorney (solo) and this is a potential case I am considering taking. The fraud case against the auto dealer looks pretty good, but I was looking for a general tip on potentially reversing the negative credit report entry before I start digging through the legal research. Thanks.]

Okay, lets try to take a look at this.
At this point, the credit history is correct.... at least as far as the creditor is concerned. The loan is delinquent... and the only name they have is the debtors.
That means that any request for verification to the CRA (Credit Reporting Agency) will come back as valid.... as they are.
The only way I can see for the CRA records to be revised will be:
1) By the creditor agreeing to revise/correct/amend their report, or
2) The debtor adding her 'comments' to the file (as allowed by the FCRA - Fair Credit Reporting Act), or
3) By a court order directing the CRA and/or creditor to delete the report.

If the truck owner sues the auto dealer and then settles the case short of a judgment that definitively says, "Yup, that was fraud", the negative credit entry might not come off due to a lack of evidence.

Nope. See above. The CRA is ONLY obligated to report accurate information.... and to them (and the creditor) the information reported is in fact accurate. The circumstantial issue of the dealer fraudulently not paying off the note balance has NO direct impact on the CRA report.

I suppose the truck owner could request the truck lender and credit bureaus remove the negative item from the credit reports and submit evidence of fraud to them. If they do not agree to reverse the item, the truck owner could sue the lender and credit bureaus for declaratory and injunctive relief to have the court remove the items.

I agree.... as noted above. Also, add 'defamation of credit' and 'financial injury' due to the conduct of the dealer.

One question though.... is this dealer still viable with sufficient non-exempt assets to pursue?? Also, California is very 'consumer friendly'. What, if anything, did the DMV (dealer license) do as to their dealer license(s)??

[bearflag70]

Thanks for the tips...

1. I knew this was problematic because the lender and CRAs both reported accurate info from their perspectives. So, the question really is to what extent can an innocent consumer get relief? Thanks for the input on that.

2. I don't know anything about the auto dealer's assets or financial profile at this point. All I know is they are still in business.

3. I doubt any administrative actions have been taken by DMV against this dealer (yet). However, what the dealer did is to hand the truck over to a second company that then leased the truck to some random lessee consumer, supposedly all on behalf of truck owner who knew nothing about all that until the scam was uncovered later. The truck was repo'ed from the lessee.

From what I know so far, DMV has shut down this second company for felony auto subleasing. Probably judgment proof there.

The liability question is to what extent can truck owner now pin this on the auto dealer via respondeat superior and agency theory since the auto dealer's (possibly former) employee is the one who set the whole thing up while leading the truck owner to believe it was a trade-in.

[bearflag70]

BTW, I realize the agency theory stuff will all have to hashed out in discovery. I was just throwing it out there as background.

[debtcollector`]

My first question is:

What happened to the criminal case? I would think the people signing the contracts for the dealer would be subject to criminal charges for theft (grand theft? I'm not a lawyer) and conspiracy.

The original lender would not want to damage relations with a good customer that suffered at the hands of a criminal. Provide the convictions and evidence and they should remove report.

Beyond that roll up your sleeves and pack a lunch a lunch 'cause you are in for heck of a furball.

DC

[bearflag70]

I don't know yet what happened in the criminal or administrative actions. However, I doubt any criminal or admin actions have been taken against the auto dealer. The DMV actions have apparently focused on shutting down this second company, which has its own fraud alert page on the DMV website.

QUESTION: On what legal basis would a court order the CRA to remove the negative credit entry?

[JETX]

Originally Posted by bearflag70

QUESTION: On what legal basis would a court order the CRA to remove the negative credit entry?

None. There isn't a statutory obligation to remove a 'negative credit entry', if it is indeed factual.
However, if you mean ANY entry that is NOT correct, or has extenuating circumstances as in this case, some typical grounds were noted in my earlier post in this thread.

[bearflag70]

Originally Posted by JETX

None. There isn't a statutory obligation to remove a 'negative credit entry', if it is indeed factual.
However, if you mean ANY entry that is NOT correct, or has extenuating circumstances as in this case, some typical grounds were noted in my earlier post in this thread.

That's what I thought. Thanks!