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CONSUMERS : Correcting Error on Credit Record Can Be a Problem

February 09, 1989|DON G. CAMPBELL

Question: I am at my wit's end trying to deal with the nameless people who control my destiny. In the wake of Proposition 13, Orange County went to court and got a ruling that allowed them to retroactively impose new property taxes on thousands of property owners. We were notified that we had 5 years to make installment payments on this amount.

We were not told that tax liens were placed on our property and would appear on our credit report. In fact, I didn't know this until I was turned down this year for a trivial loan based on that information.

Even though I paid the arrears off several years early, my credit report shows both a tax lien (1982) and a lien release (1985), giving the erroneous impression that I don't pay my taxes and am, therefore, a poor risk.

I explained this in writing to TRW and CBI (Credit Bureau Inc. in Orange County) and asked them to remove the information since it gives a completely wrong impression. TRW did remove it (except for the release of 1985--perhaps an oversight). But CBI refused to do so without explanation. It remains on my reports and continues to haunt me even though I did nothing wrong. Can you help me, please?--R.N.

Answer: It not only sounds odd to thee and me, but it sounds equally odd to Bradley L. Jacobs, the Orange County assessor.

"Orange County has never gone to court and gotten something like that--and we couldn't have even if we had wanted to."

There certainly would have been a public outcry of monumental proportions if such a wholesale attempt to sidestep the rollback provisions of Proposition 13 had been attempted back in '78 at the time of the measure's passage.

Supplemental Tax

What Jacobs suspects happened is that you (and you sure weren't alone here) fell afoul of a 1983 state law (Sen. Bill 813). It had to do with "supplemental assessments" (in effect, a reassessment), which, of course, invariably led to the receipt of a supplemental tax bill. But supplemental assessments have always been around and have nothing to do with Proposition 13.

Prior to passage of this bill, there was always a sort of "value change holiday," Jacobs says, when supplemental assessments didn't actually show up on the tax rolls for the property owner for a year or a year and a half.

The new law, Jacobs explains, "knocked out this holiday but set up a formula for taking the difference between the old value and the new value and then pro-rating it over the number of months involved. It was, undoubtedly, the most complicated piece of tax legislation ever passed. You have to be a professional, working exclusively in the field, to even begin to understand it. Every time we send out one of these supplemental assessments we have to include a full page of explanation and it drives everybody crazy. We get 20 times the number of questions on this as we do on anything else."

The other factor (besides the sheer complexity of the law) that makes Jacobs suspect it as the source of your problem is that the law did, indeed, have a provision making it possible to spread the payment of the supplemental assessment over a number of years.

But, of course, your lien was imposed in '82, before the assessment law went into effect.

Lien Imposed

"It's hard to know what might have happened because the lien was entered before the new law should have impacted it," Jacobs says, "unless your writer here had appealed the assessment, lost the case and so the lien was imposed retroactively. But it's impossible to know without having all of the facts."

Jacobs suggests, however, that you write him (mark it for his attention) and he'll go all the way back and find out what happened. Send it to Brad Jacobs, Orange County Assessor, P.O. Box 149, Santa Ana, Calif. 92702.

If somehow there was an error and the tax collector was indeed at fault, then Jacobs' office has the authority to take the matter back to the appropriate court, which can then completely "remove" the lien--not simply, as has already been done, "release" it--and this would wipe the whole incident off your records.

Of course, your basic problem is still in place: How can you, otherwise, purge your credit record of a notation like this? Obviously, other people can indeed be impacted by this provision of the law--the "assess now, pay later" feature, which, by automatically triggering a lien, would show up on their credit records and, certainly, could be interpreted negatively, even though there's no actual default, or even delinquency, on taxes involved.

Unfortunately, according to Shannon Valentine, director of public relations in Atlanta for Equifax, the parent firm of CBI, the credit reporting company did go back to the court and reaffirm the validity of the lien and the release last November when you contacted the Orange County office, and so CBI's hands are pretty well tied unless the court authorizes the entry's removal--just as Jacobs indicated.

"There is however, an explanation of the lien attached to his record," Valentine adds. And this, presumably, should soften any negative impact that it might have in the eyes of a credit grantor. But without the court's approval, she continues, the lien/release will have to stay there for 7 years.

Valentine will be glad to look into it further, though, if you'll provide her with all of the facts that you have. Write to Shannon Valentine, director of public relations, Equifax, P.O. Box 4081, Atlanta, Ga. 30302.

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