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Frank to hold hearings on correcting errors in credit reports

Bureaus facing questions about their flexibility

Barney Frank is interested in credit bureaus. Barney Frank is interested in credit bureaus.

US Representative Barney Frank said he plans to hold hearings early in 2007 about procedures at consumer credit bureaus, following a Globe Spotlight report last week on how difficult those firms often make it for people to correct errors on their credit reports, even those resulting from possible fraud.

Frank, a Democrat from Newton, becomes chairman this week of the House Financial Services Committee.

That panel oversees US financial institutions, including three major credit bureaus -- Experian, Equifax, and TransUnion -- and the thousands of creditors who pay them for consumer data.

"We will have some hearings about how to fix this," Frank said in an interview Friday. He said a law passed by Congress in 2003, to give consumers access to free annual credit reports, so they can monitor any errors, may not have gone far enough.

"If you can't correct the report, that's a problem," Frank said. "You've got to be able to correct it."

The credit bureaus are essentially data warehouses that track consumers' credit histories. They say they know which credit cards are in each consumer's wallet.

They also say they know how much is due on the mortgage and whether the electric bill is paid on time. But if the wrong information gets into their systems, whether through identity theft or errors transmitted by creditors, untangling the mess can be almost impossible, according to dozens of consumers who contacted the Globe.

People like Eric W. Carroll of Newton have spent several years battling the credit bureaus, to no avail.

Carroll, a 29-year-old electrician, cannot get a mortgage, or rent an apartment.

He cannot get credit of any kind, because his credit report is littered with the history of a Florida man by the same name, a man who has thousands of dollars in overdue bills and bounced checks.

Efforts to disentangle the two men has been a full-time frustration for the Newton man's parents, Leo and Judy, who have fielded hundreds of calls from debt collectors seeking the Florida Eric Carroll.

"I am beside myself," Leo Carroll said Friday, having just received yet another report from Experian, still listing Florida addresses for his son.

Heather Greer, a spokeswoman for Experian Ltd. in Costa Mesa, Calif., expressed sympathy for the Carrolls. She said the firm had removed the wrong information, but every time creditors send in new data, it is automatically added to the file. "The problem is the creditors giving us the wrong information," she said.

In the case of Carroll and another victim, David M. Litchfield of Norwell, Social Security numbers appear to be at the root of the problem. On credit reports and on databases, each man's Social Security number is associated with that of another.

Those other people say they did not steal the Social Security numbers. Whether by error or by malice, the result is the same: There are credit headaches for the victims, who must prove their innocence to the credit bureaus, and for the creditors, who insist they owe money.

Ed Mierzwinski, a consumer program director at the US Public Interest Research Group in Washington, said he believes the only answer is to give consumers control of their own credit reports, a measure that creditors and the credit bureaus have opposed. In his view, consumers should be able to lock their credit reports.

"They want access to our information," Mierzwinski said of the credit reporting industry. "Then they've got to protect it better."

Beth Healy can be reached at bhealy@globe.com.

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