Credit reporting or other personal consumer reports -- Incorrect information on your report -- Complaint #9987861
Freedom Mortgage Accused of Incorrectly Reporting Late Payment Despite Consumer's Proof
Complaint Overview
Complaint ID: 9987861
Company: Freedom Mortgage Company
Product: Credit reporting or other personal consumer reports
Sub-Product: Credit reporting
Issue: Incorrect information on your report
Sub-Issue: Account information incorrect
State: Pennsylvania
ZIP Code: 16801
Date Received: 2024-08-31T12:00:00-05:00
Date Sent to Company: 2024-08-31T12:00:00-05:00
Company Response: Closed with explanation
Timely Response: Yes
Consumer Disputed: N/A
Submitted Via: Web
Risk Assessment
Risk Level: high
The risk is high because an inaccurate 30-day late payment can severely damage the consumer's credit score, leading to significant financial repercussions. The company's refusal to correct the error despite presented evidence suggests a potential violation of consumer protection laws.
Consumer Sentiment: frustrated
Topics: credit-reporting, incorrect-information, mortgage-servicing, late-payment-reporting, freedom-mortgage, fcra-violation
AI Analysis
It appears you've encountered a frustrating situation where Freedom Mortgage incorrectly reported your mortgage payment as late, despite you having evidence of timely payment. You made a payment of $1900.00 via e-payment on a specific date, but Freedom Mortgage later claimed insufficient funds and marked your account as 30 days delinquent. You provided your bank statement as proof of sufficient funds and that the funds were available on the date Freedom Mortgage claimed to have presented the payment. Your bank also confirmed they received no claim from Freedom Mortgage. Despite this evidence, Freedom Mortgage has refused to correct the error and the 30-day late status on your credit report. You've also disputed this with credit bureaus, but they haven't updated your account. This is a serious issue because an inaccurate late payment can significantly harm your credit score, making it harder and more expensive to obtain future credit, rent an apartment, or even get certain jobs. It's also concerning that Freedom Mortgage is insisting on their version of events despite your proof. This type of issue, where payment processing errors lead to inaccurate reporting, can unfortunately happen with any mortgage servicer, especially with electronic payment systems that can sometimes experience glitches. The company's response of 'closed with explanation' suggests they believe they've addressed it, but their explanation doesn't align with your evidence, indicating a potential breakdown in their internal dispute resolution process or a failure to properly investigate your claim. For others in similar situations, it highlights the importance of keeping meticulous records of all payments and communications, and being persistent in disputing errors with both the company and the credit bureaus.
Consumer Narrative
On XXXX XXXX we e-paid our mortgage to Freedom Mortgage for the full amount {$1900.00}. On XXXX XXXX we received a payment returned notice from Freedom Mortgage, they stated there were insufficient funds. This was not true and I copied my checking account statement from my bank from the dates they claimed to have presented the check for payment, which was XXXX XXXX. I sent the copies to them by their emial system. I also called my bank to see if the problem was their end. My bank said they never received any call or claim for these funds from Freedom Mortgage from their epayment system. The Freedom Mortgage system just did not register my payment and then they marked us 30 days late. I sent this bank statement to them to ask them to correct this mistake. They wrote back by email that there was no mistake and that there were not sufficient funds and did not correct their 30 day late status. They also attached the detailed spreadsheets showing we paid late in XXXX and this is their proof that we paid late. We did not pay late, their e-system was broken. I also have disputed this mistake to credit bureaus XXXX and XXXX who did not update our account after I disputed it. This mistake is due to a technical glitch on the part of Freedom Mortgage, who has insisted they are right when I have proven with my bank statements this is not correct. Would this office be able to help?
What You Should Do -- Consumer Action Plan
1. **Gather all documentation:** Ensure you have copies of your bank statements showing sufficient funds, proof of your e-payment, all email correspondence with Freedom Mortgage, and any communication with the credit bureaus. 2. **Send a formal dispute letter to Freedom Mortgage:** Via certified mail with return receipt requested. Clearly state the error, provide your evidence, and demand correction of the late payment status and removal of the inaccurate information from your credit report. Reference the Fair Credit Reporting Act (FCRA). 3. **Send a formal dispute letter to the credit bureaus:** Again, via certified mail. Include copies of your evidence and the letter sent to Freedom Mortgage. Demand they investigate and correct the inaccurate information. 4. **File a complaint with the CFPB:** You've already done this, but ensure you follow up. If Freedom Mortgage's response was unsatisfactory, you can add more information. 5. **Consider a complaint to your State Attorney General:** Pennsylvania has consumer protection laws that may apply. 6. **Consult with a consumer protection attorney:** If Freedom Mortgage continues to refuse correction, an attorney can advise on further legal action.
Legal Context & Consumer Protection Laws
The Fair Credit Reporting Act (FCRA) is highly relevant. It requires credit reporting agencies and furnishers of information (like Freedom Mortgage) to ensure the accuracy of consumer credit information. If Freedom Mortgage fails to correct inaccurate information after being notified, it could be a violation. The Consumer Financial Protection Act (CFPA) grants the CFPB authority to regulate financial products and services, including mortgage servicing and credit reporting, and prohibits Unfair, Deceptive, or Abusive Acts or Practices (UDAAP). Freedom Mortgage's alleged refusal to acknowledge proof of payment and correct a reported delinquency could be considered unfair or abusive.
Regulatory Insight
This complaint pattern, where a mortgage servicer allegedly fails to properly investigate and correct payment errors leading to inaccurate credit reporting, is a recurring issue that regulators like the CFPB monitor closely. Technical glitches in electronic payment systems can occur, but the servicer has a legal obligation under the FCRA to conduct a reasonable investigation when a consumer disputes an error. A pattern of dismissing consumer evidence and refusing to correct inaccuracies could indicate systemic issues in Freedom Mortgage's dispute resolution processes or a broader problem with their electronic payment systems and reporting protocols.
Resolution Likelihood
40%
State-Specific Consumer Protections
Pennsylvania has a Consumer Protection Law, administered by the Bureau of Consumer Protection within the Office of Attorney General. This law prohibits unfair or deceptive acts or practices in the marketplace. Consumers can file complaints directly with the Pennsylvania Attorney General's office, which may investigate and take action against companies engaging in such practices.
Industry Comparison
Most reputable mortgage servicers have robust dispute resolution processes and aim to correct errors promptly when presented with clear evidence, as inaccurate reporting can lead to regulatory scrutiny and legal action. Freedom Mortgage's handling, as described, appears to fall short of industry best practices if they are indeed dismissing verifiable proof of timely payment.
Related Issues
Frequently Asked Questions
What should I do if Freedom Mortgage reported my payment late even though I paid on time?
First, gather all proof of payment, including bank statements showing sufficient funds and transaction details, and any communication with Freedom Mortgage. Send a formal dispute letter via certified mail to both Freedom Mortgage and the credit bureaus (Equifax, Experian, TransUnion) detailing the error and providing your evidence. If they fail to correct it, file a complaint with the Consumer Financial Protection Bureau (CFPB) and consider contacting your state's Attorney General's office. Keep meticulous records of all correspondence and actions taken.
Does Freedom Mortgage have a legal obligation to correct my credit report if they made a mistake?
Yes, under the Fair Credit Reporting Act (FCRA), mortgage lenders and servicers (furnishers of information) have a legal obligation to ensure the accuracy of the information they report to credit bureaus. When a consumer disputes inaccurate information, the furnisher must conduct a reasonable investigation. If the investigation reveals the information is indeed inaccurate, they must correct it. Failure to do so can result in legal action and penalties.
Should I file a complaint with the CFPB about Freedom Mortgage?
Yes, filing a complaint with the CFPB is a recommended step, especially since you've already submitted one and received an unsatisfactory explanation. The CFPB acts as an intermediary, forwarding your complaint to the company and working to get a response. If the company's response is inadequate or they fail to resolve the issue, the CFPB can use this data to identify patterns of misconduct and potentially take enforcement actions. Ensure your complaint is detailed and includes all supporting evidence.
What is Freedom Mortgage's track record with credit reporting errors?
While specific, up-to-the-minute track records are difficult to ascertain without extensive data analysis, consumer complaints filed with the CFPB can offer insights. Freedom Mortgage, like many large mortgage servicers, receives complaints related to payment processing, escrow accounts, and credit reporting. Reviewing aggregated complaint data on the CFPB's website can provide a general understanding of the types of issues consumers have encountered with the company. However, individual experiences can vary significantly.
What are my next steps if Freedom Mortgage and the credit bureaus don't fix the error?
If Freedom Mortgage and the credit bureaus fail to correct the inaccurate late payment after your disputes, your next steps could include sending a demand letter from a consumer law attorney, filing a lawsuit in small claims court, or pursuing further action through your state's Attorney General. You may also consider filing a complaint with the Better Business Bureau (BBB), although this is not a regulatory body. The key is to continue documenting everything and escalating your efforts systematically.
How does an incorrect 30-day late payment affect my credit score?
An incorrect 30-day late payment can significantly lower your credit score, often by dozens of points, depending on your overall credit profile. Payment history is the most critical factor in credit scoring. This negative mark can remain on your report for up to seven years, making it harder and more expensive to qualify for loans, mortgages, credit cards, rent apartments, and even obtain certain jobs or insurance policies. The impact lessens over time, but the initial drop can be substantial.
Can I join a class action lawsuit against Freedom Mortgage for this issue?
It's possible, but unlikely based on a single instance. Class action lawsuits typically require a widespread pattern of similar misconduct affecting a large number of consumers. While your situation is serious, a single erroneous late payment, even if the company refuses to correct it, may not meet the threshold for a class action. However, if you discover evidence that Freedom Mortgage has a systemic practice of misreporting payments or mishandling disputes, you or an attorney could investigate the possibility of a class action. Keep records of your experience and consult with a consumer protection attorney specializing in class actions.
Disclaimer
This analysis is generated by an AI and is intended for informational purposes only. It does not constitute legal advice, and you should consult with a qualified legal professional for advice specific to your situation.