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What Do I Do If the Bank Says I’m Dead?

Investigate, complain, and maybe sue

Anawat Sudchanham/EyeEm

Thanks to a watchdog report this summer, we learned the palm-to-face news that the federal government had erroneously sent stimulus checks to more than one million people who happen to be dead. 

In the rush to get cash out and prop up the economy at the start of the coronavirus crisis, the Treasury Department apparently sent out initial payments without referring to the Social Security Administration’s official “death master file,” explained the report put out by the Government Accountability Office. So the federal government ended up sending money to people who had filed their taxes in the past two years but who had since passed away.

If you are one of the unlucky undead, you might have some questions!

In this case, interagency miscommunication and mismatched data led to about $1.4 billion in unclaimed or wrongly claimed funds. But it turns out that mistaking people for alive when they’re actually dead is not nearly as complicated as the opposite scenario. 

Consumer reporting agencies sometimes declare customers dead when they are very much alive—the fault, consumer advocates and attorneys say, of sloppy data matching processes. People might not discover this mistake until they get denied for a loan or a mortgage or a credit card because of it. Experts say it can be a real nightmare to fix this error, but it is possible.

If you’re one of the unlucky undead, you might have some questions! Such as:

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What?? How Could This Have Happened?

There are a couple different scenarios. A common one is that one person on a joint bank account or a joint loan will pass away, and the bank or lender will accidentally apply the “deceased” code to both people instead of just one. That information gets reported to the “Big Three” consumer reporting agencies (Equifax, Experian, and TransUnion), who then freeze both files and deny all credit-score requests to them, in order to prevent identity theft.

Alternatively, sometimes when the Big Three get their regular updates from the Social Security Administration’s death records, the credit bureaus make a mistake by matching someone on that list to someone in their files who has a similar name or Social Security number. 

And yet another potential source of confusion is when people already have their files accidentally mixed up with another person’s debts or records, and then that other person dies. (A recent joint investigation by The Markup and The New York Times found that mix-ups like this by tenant-screening agencies can keep people from being able to rent homes.)

Automation is not a good thing when it comes to credit reporting. And it’s hard to get credit when you’re dead.

Robert Sola, consumer attorney

However the error happens, it can have huge consequences. If you’re erroneously declared dead, you can’t borrow money or get insurance, and your bank accounts may get frozen and credit cards canceled. As far as these financial institutions are concerned, you no longer exist.

Consumer attorneys argue that these problems are not inevitable and that consumer reporting agencies should do a better job of cross-referencing and fact-checking the information they receive from lenders and the government. They could require a copy of a death certificate or some other documentation, rather than just accepting the “deceased” code as truth.

“Automation is not a good thing when it comes to credit reporting,” said Robert Sola, a consumer attorney in Portland, Ore., who has brought many cases against consumer reporting agencies for errors in people’s reports. “And it’s hard to get credit when you’re dead.”

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Am I Alone Here?

No, you are not! 

While it’s not possible to know how many errors exactly like this one occur each year, credit reports are frequently criticized for sloppy matching practices in general. A Federal Trade Commission audit in 2013 found that one in five Americans had an error on at least one of their credit reports.

Eric Ellman, a spokesperson for the trade group representing the Big Three credit bureaus, said that these kinds of mistakes are rare and promptly corrected when a consumer points them out. “Occasionally death information is erroneously reported, but overall our accuracy rate is in the 97 to 98 [percent] range, which we’re proud of,” said Ellman, senior vice president of public policy and legal affairs of the Consumer Data Industry Association. “It’s not perfect; we would like to get to perfect.”

A review of court records in cases against consumer reporting agencies brings up a number of examples. In one lawsuit, Tyler Robert Pang, a then 29-year-old in Middlesex, N.J., said he was trying to get a loan for his first car, a 2014 Jeep Patriot, when the lender told him that TransUnion considered him deceased and he therefore had no credit score. 

Most of the time, people are discovering this at a very critical point in time in their lives.

Stephanie Tatar, consumer attorney

While Traci Totino of Parsippany, N.J., was trying to fix this same error with TransUnion, Equifax and Experian, she alleged in court documents, things got even more surreal when American Express canceled her credit card and sent a condolence letter to her “estate.”  (American Express declined to comment in an email to The Markup.) Both cases against the consumer reporting agencies settled out of court for undisclosed sums, according to court records.

Ellman declined to comment on the lawsuits. 

You may find out you’re dead to credit bureaus at an inopportune time. 

“Most of the time, people are discovering this at a very critical point in time in their lives, like trying to get a house, trying to get a refi, trying to get a car, applying for a credit card, and having it denied,” said Stephanie Tatar, a consumer attorney in California who has represented many clients like these in federal court. “I think it’s fairly natural for the consumer to panic.”

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Who Do I Call to Fix This, Pronto?

First, contact the company or agency that you think is the source of the error and find out how you can dispute it. If you don’t know where the false information came from, you can check all three of your credit reports for free at AnnualCreditReport.com.

The company with the error might ask you to prove your identity, or, you know, aliveness. You can do this by sending in a recent paycheck or utility bill, or a notarized affidavit of some kind. Do everything in writing. Under the Fair Credit Reporting Act, the company has 30 days to respond to your dispute and investigate it.

If you’re not satisfied with the company’s responsiveness, you can also complain to the Consumer Financial Protection Bureau, the Federal Trade Commission, and your state’s attorney general, all of whom share oversight over credit reporting agencies under the Fair Credit Reporting Act. 

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O.K. … And What If That Doesn’t Work?

If the consumer reporting agency gives you the runaround, or you can’t seem to fix the mistake on your own, you can always call a consumer attorney to see if your case is a good fit for taking the company to court.

“The mandate on the consumer reporting agencies is to have and follow reasonable procedures to assure the maximum possible accuracy of consumer reports, and I think that that standard here is very easily not met,” said Micah Adkins, a consumer attorney in Tennessee. “What I mean by that is, it’s easy to demonstrate, when you have a live client, that the client is in fact not dead.”

Better still is to catch the mistake as early as possible, and the best way to do that is to regularly check your credit reports at AnnualCreditReport.com. Normally, you can request each of them for free once a year, but under new pandemic rules, you can now check them as often as every week.

Correction

This article has been updated to correct the location of consumer attorney Micah Adkins. He is based in Tennessee, not New York.

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