According to one of America's largest credit agencies, Aleksander Perstin is dead. He was marked dead last September, a lawsuit filed this week alleges. Of course, the dead typically have trouble getting mortgages and taking out credit cards (death is a major drag on your expected earnings), so for the past year, Experian has been wary of any new credit taken out in Perstin's name.
There's only one problem: Mr. Perstin says he isn't dead. He's quite insistent about it.
"Plaintiff is not deceased."
Perstin is taking Experian to court over the issue, claiming that for the past year, they've sold reports marking him as dead, making it impossible for him to obtain a credit of any kind. "If the Defendant actually believed that Mr. Perstin was deceased, it had no legally permissible basis to sell his report," the civil complaint says. "If the Defendant believed Mr. Perstin was alive, they knowingly sold his report with a gross inaccuracy." The complaint continues, making the issue crystal clear: "plaintiff is not deceased."
Perstin isn't the only one who's suffered this kind of death by clerical error. For more than a decade, credit reporting companies have faced claims of mistaken death notices, and as the companies face greater scrutiny from attorneys general, the notices have proven remarkably difficult to stamp out. Once a bank or credit card company reports a person dead, individuals like Perstin often find that no number of phone calls or legal documents can bring them back to life. They're stuck in a kind of legal limbo, unable to buy property, rent apartments, or lease cars. Since much of the system is automated, managing hundreds of millions of accounts at a time, it can be nearly impossible to make a fix at the individual scale. Ultimately, they're left with no choice but to take the companies to court.
The most famous example is a man named David Jokinen, who told his story to Congress more than 12 years ago. Jokinen was marked as dead after taking over some accounts from his mother, who died in 2001. He had been a co-signer on a number of accounts, and due to a series of clerical errors, he ended up taking over as sole owner of the accounts shortly before his mother's death certificate was processed and they were automatically closed. As a result, the owner of the account, now David, was officially marked as dead. Chase reported to all three credit bureaus that the social security number listed on the account, now David's number, belonged to a dead person, a ruling that would follow him for more than two years.
"I have been spending an average of seven hours each week, just keeping these mounting credit errors under control."
Under the Fair Credit Reporting Act, consumers can dispute any fact in their credit report, giving agencies 30 days to confirm it or back down — but that measure was little help to Jokinen. He reported the mistake to Experian and the two other major agencies, but they simply confirmed that Chase had marked him as dead and moved on. He reported the issue to Chase, but the bank was slow to react, and as soon as one agency made the fix, another report of his death would echo back through a different channel. Ultimately, he had to appeal directly to the Social Security Agency for a "living letter," but even that wasn't enough to restore his credit. "I have been spending an average of seven hours each week, just keeping these mounting credit errors under control," Jokinen told the Senate Banking Committee. "I am a living case example of how our current fair credit reporting laws still don’t work as intended."
In many ways, it's a problem that cuts to the structure of how credit scores work in America. There are only major three reporting agencies — Experian, Equifax, and TransUnion — and each one deals more with banks and mortgage agencies than everyday consumers. If an agency has to choose between a voice on the phone and a bank report, it will always believe the report. As Jokinen discovered, there's no clear path for a consumer who wants to plead their case. "When you dispute it, often a human being doesn't get involved. It's computers talking to computers," say Evan Hendricks, a credit reporting advocate at Privacy Times. "The computer just verifies, that's what we've got in our system."
"It's computers talking to computers."
But while groups like Privacy Times advocate for more public access to the credit reporting system, it's unclear how to get there without overhauling the system. Companies like Experian are fundamentally responsible to their customers, the banks and lenders who are buying their information. That gives them little incentive to let the average consumer have a say. "I think we need a structural change to start treating credit bureaus like utilities," Hendricks says, "because they are essential to being a consumer and they need closer regulation."
The first part of that fix may already be on the way. In March, the three major credit reporting agencies agreed to reform their dispute resolution process, as part of a settlement with the New York State Attorney General. Part of that reform meant hiring and training new employees to handle disputes, rather than relying so much on automation. It also established new practices for more common credit-ruiners like one-time medical debt, which can often cause long-circulating damage in a similar way.
Still, for anyone caught in the gears of that system, that change can't come soon enough. A full six months after the settlement, Perstin says agencies like Experian are still marking him as dead, with no human intervention in sight. The terms of the settlement give bureaus another two and a half years before the new disputation processes kick in. In the meantime, people like Perstin will have to rely on the courts to bring them back from the dead.