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Credit bureaus promise prompt rectification in errors and medical-debts in the US
TransUnion, Equifax and Experian are present in India, either on own or through a partnership and it would be interesting if they follow the same system to accept and rectify errors
 
To the relief of American consumers, New York State's attorney general announced Monday that his office has reached an agreement with the three major credit bureaus in the US. Under the agreement, all three TransUnion, Equifax and Experian will revamp the way in which they rectify their own errors, and the way they handle medical debt. 
 
In his statement to the Wall Street Journal, Attorney General Eric Schneiderman said that the three bureaus have promised to be “more proactive in resolving disputes over information contained in credit reports — a process federal watchdogs and consumer advocates have long decried as being stacked against individuals”. 
 
The same big global names operate in India—TransUnion with Credit Information Bureau of India Limited (CIBIL), Experian India, Equifax (with CRISIL) and CRIF Highmark and it would be interesting if they follow the same system here as well. Remember, few years ago, how Suresh Prabhu, the current Railway Minister, found himself as marked defaulter for no fault of his? Apparently, a telephone company had failed to disconnect a mobile number and was piling on the minimum charges with interest that made him a ‘defaulter’. (Read: Credit Reports: Rightfully Ours )
 
This has been long due, considering that credit-rating agencies have hardly ever been held accountable for the errors they make in their credit-reports, neither do they have any incentives to correct them, regardless of the trouble it causes the people. At the end of the day, the ordinary “consumer” is not their customer. Their real customers are mortgage lenders, cell phone providers, credit card companies, car dealers or any business or institution, which might lend money or enter into a contract with individual consumers. Their job is to provide their clients with credit-information on their prospective customers. 
 
Your credit report would evaluate your credit worthiness or credit score, which is basically an estimate of how likely you are to pay back your loan. A higher rating would indicate a higher credit-worthiness, and that in turn will lead to a lower interest rate on your loans. Anyone with low credit-worthiness would be charged a higher interest rate. This however, is not happening in India at present.
 
Your credit score depends on how regularly and promptly you pay your bills. For example, if someone keeps maxing out on their credit card or is perennially late in repayment of bills, they will have a low credit rating. It seems rather simple, but in fact, there are some major issues with it. 
 
It is evident that your credit report and score is of great significance to you – whether for a loan sanction, or the application for a new credit card. Now consider this – what happens if the credit bureaus report erroneous information about you – stating that you are delinquent on many bills despite the fact that you have made all your payments on time? It is obvious that this will have seriously negative consequences – but only for you. The agency has absolutely nothing to lose, and hence no inclination to fix its mistakes. 
 
In the US, several consumers have reported mistakes and errors in their credit-reports, many of which are absolutely absurd. For example, in one complaint that a consumer reported to Consumer Affairs, a US based consumer news and advocacy organisation, his credit-report released by Equifax showed no changes from any of the previous months, yet his credit score had dropped by 80 points. When he called them up for help, they refused to provide any details over the phone. Instead, they requested him to write to them, promising they would respond within 30-90 days.
 
This is just one of many, many cases of careless errors made by credit-agencies. While they have no incentive to correct their errors promptly, the consumers have a lot to lose. It was in response to the increasing number of such complaints that the Attorney General's office started its investigation. 
 
While the latest development in the US is promising, consumers will have to wait for anywhere between six months to three years in order for the changes to be implemented. This is perhaps because along with the agenda for efficient handling of errors, credit-agencies are also looking into changing the way they deal with customers' unpaid medical bills. The current system treats all kind of debts equally – and this includes medical bills. This causes issues in instances of medical emergencies, where delays may be either due to lack of immediate funds or because insurance companies are late in making payment. 
 
In our country too, consumers would benefit a great deal if credit bureaus such as Credit Information Bureau of India Limited (CIBIL), Experian India, Equifax and CRIF Highmark are made more accountable, especially accepting and then rectifying errors made in credit reports.
 
A set of people are completely innocent victims of an identity mix-up within credit information companies (CICs) whose data algorithms match up multiple borrowings of people from different lenders to create a credit profile. Sometimes, this goes horribly wrong and people who have no borrowing or good credit record are shown as defaulters. Moneylife Foundation has helped resolve a couple of such cases.
 
Moneylife Foundation runs a free helpline to address all issues related with credit. You can access the Credit Helpline here: www.freecredithelp.in
 
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How to reaffirm age-old ties between India and Sri Lanka

PM Modi should offer the very best of terms that Sri Lanka would be happy with so that there is mutual trust, confidence and create conditions to ensure our age-old traditional relations, which are above petty politics

 

Prime Minister Narendra Modi will be visiting Sri Lanka on 13th and 14 March 2015, responding to the invitation of President Maithripala Sirisena, who made his first overseas visit to India to meet the Indian leaders.  Modi will be the first Indian Prime Minister, in 24 years, to visit this beautiful island nation.  He is expected to make short visits to other two neighbours, Mauritius and Seychelles during this trip.
 
It may be recalled that President Sirisena visited to reaffirm Sri Lanka's desire to maintain close relations with India. His trip also tried to ensure that there are no misunderstandings that former President Mahindra Rajapaksa's tilt towards China may have caused in the minds of the Indian populace. President Sirisena is expected to visit China over the next few weeks and indications are that he would maintain cordial relations with them as well. Such a move will strengthen the relations with all concerned.
 
During his brief visit, there are chances that the Indian PM may be invited to address the Sri Lankan Parliament.  If this is done, it is expected that PM Modi will offer India's hand of friendship in every conceivable way and offer all assistance that Sri Lanka may need in its development. Trade and investment are expected to be important issues that will be discussed in great detail.
 
PM Modi, in his tight schedule, will officially hand over some 20,000 homes built by India in the Northern Province.  In doing so, he will be the first Indian prime minister to visit both Jaffna and Talaimannar, where he is expected to commission a railway line. He is scheduled to open a cultural centre at Jaffna also.
 
In the past, there has been speculation about Indian concerns with regard to the implementation of the 13th Amendment and rehabilitation of Tamil refugees in the bilateral talks with Sri Lankan leaders. It is best that PM Modi leaves this issue out of his agenda and treats it as a totally internal problem of the Sri Lankan Tamil population with their own elected government.
 
There have been talks of fishing rights and mishaps that involve fishermen from both sides violating each other’s fishing areas. These squabbles are left to the wisdom of the fishing folks themselves, instead of governments getting into the fray. All these issues can and should be resolved peacefully, and not by force, by any third party.
 
In so far as the attempt by China to secure business from Sri Lanka, this ought to be considered as a business attempt by an interested party, rather than making it an issue for political discussion. If anything, PM Modi should offer the very best of terms that Sri Lanka would be happy with so that there is mutual trust, confidence and create conditions that will ensure our age-old traditional relations, which are above petty politics. No doubt, President Sirisena will also be understanding and accommodative in dealing with such prickly issues. It is just as much in their interests to keep China at bay.
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
 

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NSEL publishes book to clear air over Rs5,600 crore payment crisis

In a two-volume book, NSEL says the series of action that have been taken against the company, FTIL and their directors are far beyond the legal

 

Facing a barrage of problems on several fronts, scam-hit National Spot Exchange Ltd (NSEL) has launched a massive media outreach explaining the circumstances leading to the Rs5,600-crore payment crisis as well as how it has been “singled out” and no action has been taken against the real culprits.
 
Seeking a “fair chance” to explain its stand, NSEL in a two-volume book titled ‘Truth about NSEL’ attempts to clear the air around its promoter Financial Technologies India Ltd (FTIL), and how its new board is attempting to recover and rebuild the exchange.
 
The books explain the NSEL's point of view on various aspects of the crisis that surfaced in end July 2013.
 
“Many a version of the saga has been floated and is doing the rounds in all forms of media. In most of the stories, the villainy has been laid on NSEL, FTIL, and on the promoters of FTIL. An impression, which is far from the truth, is being created to our own dismay,” said NSEL Joint Managing Director Prakash Chaturvedi in a covering letter issued along with the book.
 
Stating that the NSEL crisis was used as an opportunity and excuse to kill the group, he said, “The series of action that have been taken against NSEL, FTIL and their directors are far beyond the legal. The decisions appear motivated to single out NSEL and FTIL.
 
“Simultaneously, little or no action has been taken against the real collective forces responsible for creating this force majeure accident,” he said.
 
While NSEL on its part has been concentrating on making recoveries from defaulting members, Chaturvedi said, “This unfortunately is being interpreted as its weakness and NSEL, therefore, has decided to reveal the facts for the consumption of all the important opinion and decision makers in the country.”
 
The NSEL unfortunately has been “prey to a conspiracy carefully crafted by an unholy alliance of market competitors, some bureaucrats, and their political masters,” he said.
 
He also said “the crisis was engineered by fuelling the market with the objective of first contriving a settlement default and then disallowing a calibrated shutdown, which culminated in a payment crisis for the exchange.”
 
While explaining who benefited from the crisis, NSEL in the book said: “Only the egos of a couple of officials who were keen to destroy the group... Can India afford such officials who could undermine national interest? ”
 
The book also said that NSEL’s parent company FTIL suffered the most from the crisis.
 
“Not only injustice was meted to FTIL but added to it are other painful measures such as the hurry to declare promoters not ‘fit and proper’, the vilification campaign, unverified rumours, which have pushed the group into a corner grasping for a little justice,” the book added. 
 

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