It is hard enough to maintain a clean credit report without banks reporting false information to credit reporting agencies.
Some customers of Fifth Third Bank in Central Florida are upset, and rightly so, after finding out that a computer error at the bank put false information into their accounts and damaged their credit scores.
Fifth Third Bank had admitted that an error in their computer system happened after the recent acquisition of another bank and inserted false information into several thousand customer accounts. In some cases, this computer glitch caused credit reporting errors and damage to the customers' credit scores.
The bank says that the problem began in December while they were converting the files of customers from the former R-G Crown Bank of Casselberry to the Fifth Third system. Fifth Third has not said how the computer error happened, but has noted that a third-party vendor was involved in the error.
Fifth Third has issued a statement saying that when they learned of the problem, they immediately took steps to correct it and that the information has now been corrected. They have notified the credit reporting agencies of the errors and say that the false information will not appear on their customers' credit reports.
However, some customers say that the issue is not resolved. There have been reports of customers who were not notified of the error, and have encountered financial difficulties as a result of the problem.
One customer, a real estate investor, says that he has been put out of business because of the bank's error.
He was in the process of closing on several properties when the lenders ran the final credit check and saw that his credit score had dropped from the high 700s down to the low 600s range. As a result, the loans fell through, and he has since had problems conducting his business.
He also says that while his credit score is gradually coming back up, the damage has been done. Unfortunately, this man is one of thousands of customers who were affected by this incident.
According to some consumer-advocacy groups, bank mergers often cause problems for consumers. Although the computer errors at Fifth Third were more serious than most, computer errors and account mistakes are often reported during and after bank mergers.
When a serious error happens, such as the incident at Fifth Third Bank, consumer advocates say that it can take months or even years for customers to get their credit reports straightened out. It is clearly not enough for the bank to simply send out letters and hope that the credit reporting agencies get it right. If your credit report drastically changes because of bank error your credit card interest rates could be affected too. Interest rate jumps like these are among the leading causes of bankruptcy.
Consumer advocates are calling for banks to take more responsibility for financial errors and to assist consumers in getting incorrect information removed from their credit reports. The banks are also encouraged to provide credit monitoring services to those customers who are affected, to thus ensure that the false information stays out of their credit files.
It is unclear when Fifth Third actually notified their customers of the computer error, or if they notified bank regulators. Certainly some customers say that they only learned of the error when they got the nasty surprise of being rejected by creditors.