Judy Thomas crumpled in her seat as the banker behind the big wooden desk said she couldn't refinance her home. The nurse from northern Ohio was rejected for the loan because, in the financial world, she was also Judith Kendall from Utah who had bad credit.
Barbara Sowers tossed a rejection letter for a government loan onto a pile with so many others. The disabled central Ohio woman — living in a 200-year-old house with holes in the ceiling and rotting walls — couldn't get a loan to make repairs because credit reports confused her with her daughter, who has a similar name.
Brenda Campbell was certain she would be fired by the Missouri governor if he learned that a collection agency was going to garnish her wages. The personal financial records of the state's director of senior and disability services were mixed with those of two other women named Brenda Campbell.
The smallest error on a credit report can cause hardship. But when a consumer's file is mistakenly mixed with one from someone who has questionable credit, whether a stranger or even a family member, the consequences can be devastating.
Suddenly, through no fault of their own, they assume another person's financial identity and personal history. Those new identities can label them as a financial deadbeat or even a felon.
"It nearly destroyed my life, and then fixing the problem consumed my life," Campbell said. "And it's not just about money. There is so much time spent dealing with the fear and anxiety of how much damage this is going to cause you."
A yearlong Columbus Dispatch investigation found that thousands have been scarred by errors on their credit reports, but no one is hurt more than those whose credit histories are blended with another's, because they can take years to untangle. And in some cases, a lawsuit is required to separate the files. In the time it takes to clear it up, the consumer's credit score and financial life suffer.
The mistaken identity can cause the consumer to lose out on credit cards, home and car loans, jobs and helping their kids pay for college.
When consumers request their credit report, they must provide at least their full name, Social Security number, date of birth and address.
But creditors don't have to follow the same rules when they request consumers' reports. They can simply search for account information by name only, or maybe just by a Social Security number.
That's how the mixed-file nightmare begins and how Melissa became Lisa, Myra became Maria and Angela morphed into Angelina, as seen in federal complaints and lawsuits filed against credit-reporting agencies. The credit-reporting computers do not recognize gender, so the files of one woman named Robin, for example, were mixed with a man's named Robin.
In an extreme case, a man from Virginia with good credit was mixed with a financial deadbeat who shared his name, lived in the same town and had a similar Social Security number.
After a futile two-year battle to clear his name, the man crafted a letter to his family explaining that credit reporting had "destroyed his life." He then committed suicide. His survivors detailed the man's ordeal in a lawsuit.
About 6 percent of nearly 21,500 consumers who complained to the Federal Trade Commission during a 30-month period beginning in 2009, and nearly 8 percent of 1,842 who complained to state attorneys general in 2009 and 2010, said that their credit reports had been mixed with another person's. In an unprecedented review of consumer complaints to the FTC, The Dispatch learned that consumers' files had been merged with those of their mothers, fathers, brothers, sisters, in-laws and neighbors. They were mixed with strangers with the same name, a similar name, a similar Social Security number or no known similarities whatsoever.
Of the 1,252 people who told the FTC that their files had been mixed with other consumers', 30 percent also complained that the credit-reporting agencies failed to correct the mistakes after being asked. The others did not indicate whether they had sought to have the information corrected.
No one outside Experian, Equifax and TransUnion, the three major credit-reporting agencies in the United States, fully understands how computer formulas used by the companies match up information. The formulas are closely guarded industry secrets.
In 2004, the FTC ruled against requiring the agencies to use stricter matching criteria, such as all nine digits of a Social Security number, to assign accounts to consumers. The commission admitted that mismatching errors are costly to consumers, but it ultimately decided that it was best to protect lenders' interests. Tighter standards could increase the number of cases in which no data are found when creditors request reports.
Consumers with mixed credit files are treated no differently from someone with a misspelled name when they attempt to correct errors. The dispute system is highly automated and does not involve a true investigation by humans. Experts say the mixed-file problem is a long-standing issue.
"The FTC signed consent decrees with the three credit-reporting agencies in 1991 because of mixed-file problems. Twenty years later, we have the same problem," said Evan Hendricks, editor and publisher of the newsletter "Privacy Times" and author of the book Credit Scores & Credit Reports: How the System Really Works, What You Can Do.
"The credit-reporting agencies say their computers are so sophisticated that they only mix a few files," Hendricks said. "If it's so few, why can't they recognize and diagnose? The answer is nobody's told them to do it. And it's bad to mix the file. It's worse to not unmix it."
Stuart K. Pratt, president and chief executive of the Consumer Data Industry Association, also the spokesman for Equifax, Experian and TransUnion, said those agencies are constantly looking for methods to eliminate the mixed-file problem.
"There is an attitude that, file by file, we want to get it right and that's important," Pratt said. "They literally have scientists that deal with this question of matching (data). Year by year and month by month, they are learning, gathering data, storing data, auditing data, looking for pattern changes and looking at software and hardware technologies for improvements to the system."
Powerless to fix mix-up
After spending her days dressed in emergency-room scrubs, nurse Judy Thomas decided it was time to treat herself to a pretty dress.
To save an additional 10 percent on the purchase, she signed up for a credit card at the women's clothing store that day in 1999.
But Thomas, who always had excellent credit, was rejected and didn't know why.
The resident of Elyria, near Cleveland, called the credit-reporting agencies and learned that her file had been mixed with that of a Judith Kendall who lived in Utah. And there were two Social Security numbers other than hers listed on her report.
"I didn't know how bad it would be for me to fix it at that time," said Thomas, now 51 and nursing manager at two medical facilities. "But man, would it get worse."
For about six months, she wrote letter after letter to the credit-reporting agencies and sent personal information trying to clear her financial identity. The agencies responded with their own letters saying they would correct the problem. At other times, they simply confirmed that the false information from the Judith in Utah was still on Thomas' report.
Thomas then tried to buy a car, but she was rejected for the loan. Her credit report continued to be weighed down by the other woman's unpaid debts and bad credit.
Thomas was rejected for a loan again when she tried to refinance her home. But this time, a banker did her a favor by leaving the credit report on the edge of a desk and walking away, so Thomas could get a look at what was in it." It was just riddled with errors and debt," she said. "I tried calling all of them myself and straightening the mess out, but I had no luck."
Thomas started receiving letters and phone calls from numerous creditors across Utah, pressuring her to pay debts that weren't hers.
"I would say, 'Hey, listen, I have never even been to Utah, so how could I have a mortgage there for $147,000?' " Thomas said. "And they would continue to tell me things like, 'You are Judith Kendall, and you are 53 years old with a heart condition, and you owe us $14,000.' "
Thomas never came close to solving the problem on her own. Five years after she had been denied the credit card while buying the new dress, the credit-reporting agencies still hadn't fixed the problem.
It reached a boiling point when Thomas applied for her daughter's college loan online and was told she couldn't be a co-signer because of the debt on her credit report — debt that she knew wasn't hers.
So she hired Sylvia Goldsmith, a consumer-law attorney from the Cleveland area, in 2005 and sued Equifax and TransUnion.
Goldsmith spent a year battling the credit-reporting agencies before they agreed to a confidential settlement with Thomas. Representatives said the credit-reporting agencies do not comment on pending or resolved cases.
"No one would help me with this for all those years before Sylvia," Thomas said. "So many people told me this wasn't that big of a deal, but it was the hardest thing I've dealt with in my life. And how do you fix something if no one really understands something is seriously wrong?"
Mixing and matching credit files
Nearly 1,300 people complained to the Federal Trade Commission over a two-and-a-half year period beginning in 2009 that their credit files had been mixed with another person's. Almost three-quarters of them identified that other person as:
563 their mother, father, sister, brother, son, daughter or grandparent
213 a stranger
59 a stranger with the same name
27 a stranger with a similar name
25 a stramger with a similar Social Security number
13 an in-law
4 a deceased stranger
2 a neighbor
1 a roommate
1 their patient
Source: The Columbus Dispatch analysis of FTC consumer complaints
