By Heather Heiman
Human trafficking survivors often struggle with poor credit and other financial challenges after their trafficking experience, particularly if they were a victim of identity theft or financial coercion. Traffickers often seize victims’ identification, such as driver’s licenses, passports or ID cards, and may misuse them to fraudulently secure credit cards, bank accounts, loans and leases in the victim’s name.
Survivors also may face the burden of unpaid medical bills, overdue school loans, car payments and other debts sent to collections and reported to credit agencies during or after their victimization. This financial manipulation enables traffickers to maintain dominance over their victims, causing severe consequences. Poor credit scores and adverse consumer reports can hinder survivors’ access to safe housing, job opportunities and financial assistance, posing significant challenges as they strive to rebuild their lives after trafficking.
Until recently, there was little recourse to address these serious financial issues. However, regulation from the Consumer Financial Protection Bureau (CFPB) is helping trafficking survivors repair their credit. In 2021, Congress passed the Debt Bondage Repair Act, forbidding consumer reporting agencies from including negative information related to sex and/or labor trafficking in consumer reports. The CFPB rule now enforces this law by establishing a procedure for survivors to request the removal of negative trafficking-related data from major credit bureaus and other consumer reporting agencies. While this process does not erase the original debt, it provides a path for rebuilding credit and addressing the impact of financial exploitation and identity theft.
To get negative information removed from consumer or credit reports, survivors must submit the following to individual credit bureaus or consumer reporting agencies:
- Proof of identity – This may include a driver’s license, other form of government-issued ID – like a passport or state identity card – or utility bills with the survivor’s name.
- Evidence that the individual is a survivor of human trafficking – This can be confirmed through official documents issued by government entities such as federal, state or local law enforcement, or a certification letter from a non-government organization – such as a trafficking victims service provider or anti-trafficking task force – verifying the individual’s status as a victim of trafficking.
- Identification of adverse information – Applicants must identify what debts or other negative items on their credit report are connected to their trafficking experience and provide a letter listing these items and requesting their removal.
Each consumer reporting agency must process requests, typically within four business days, either by mail or, in some cases, electronically via their websites. In specific situations, they may require further proof of identity, victim status confirmation or details of adverse information from survivors. Consumer reporting agencies cannot contest whether the negative information identified stems from human trafficking. After requesting additional information, the reporting agency has 25 business days to make a final decision. Survivors must receive a revised report and documentation regarding the decision. If the requested information isn’t removed, a complaint can be lodged with the CFPB.
While survivors can seek this credit repair option on their own, attorneys and advocates play a crucial role in promoting awareness and expediting the process. They begin by assisting survivors in evaluating their credit reports to uncover any negative information tied to their trafficking experience, including identity discrepancies, fraudulent accounts or unfamiliar creditors seeking repayment. If credit issues are identified, attorneys and advocates can help survivors assemble and submit the necessary documentation to the various credit reporting agencies, requesting that the negative information be removed. Once this process is complete, survivors often see a significant boost in their credit scores – a key step towards rebuilding their lives and their financial stability.
For more information on the CFPB rule and process for removing negative information from credit and consumer reports, please visit https://www.consumerfinance.gov/ask-cfpb/im-a-victim-of-trafficking-how-can-i-block-items-from-my-credit-report-that-are-the-result-of-trafficking-en-2127/. A recent webinar and tip sheet providing additional details also can be found at mvlslaw.org/ht/resources.
To learn more about HTPP and how MVLS can assist, please visit mvlslaw.org/ht.