Bad Credit Reference Took a Year to Expunge

Recently married, Erica Deutsch and her husband, residents of Silver Lake, have been planning to buy a house. But first, they had to try to expunge a 1996 bad credit report in Deutsch’s name, which she discovered only in 1999.

This story illustrates how, well before you plan to borrow money, it is wise to obtain your credit report. What you discover may, as it did in Deutsch’s case, come as a shock.

Except for a single entry from Pacific Gas & Electric, this young woman’s credit report from Experian was fine. It listed a number of other accounts, and in each of those, she had never been late with a payment.

In fact, she says, she never knew she owed PG&E; anything.

Between 1992 and 1994, Deutsch, as a UC Berkeley student, lived with several other young women in an apartment. During that period, she says, she never received a utility bill and assumed, as was fairly common, that the landlord was paying the utilities. She never signed up with PG&E.;

Deutsch later moved and graduated from Berkeley in 1995. She went to USC Law School, became an attorney with a federal agency in Los Angeles, and soon had a fiance. All this time, she never heard from PG&E.;

But in September 1999, there it was, on the credit report that her prospective father-in-law, of all people, had helped her obtain: a $2,362 bill for utilities that PG&E; had put out for collection, under the misspelled name of Ericka Dutsch, in 1996.

Deutsch immediately contacted PG&E;, which had not known where she was, and offered to pay a share of the bill, while the other young women paid their shares, but she also told PG&E; representatives she had no idea where some of the other women were.

No dice, PG&E; told her. Even though the utility acknowledged it had never sent her a bill, she was told by a service rep that she had to pay in full by March 2000, or the bad credit report would remain.

Deutsch did not pay, and after she and her fiance got married, a mortgage broker informed her that there were now two bad credit references from PG&E; on the Experian credit report, stretching out the period when such references would appear by several years.

The mortgage broker, she said, “told us in no uncertain terms it needed to be taken care of, because it could affect the amount of the loan, or its terms, even if we could get approved.”

By the time she called The Times a couple of weeks ago, Deutsch was pretty anxious. Would I intercede for her in the standoff?

Deutsch added, by way of persuasion, that she had checked a PG&E; Web site and found a suggestion there that the utility wouldn’t, as a matter of policy, try to collect underbilling charges caused by any errors it had made that lasted more than three months. It also contained a statement that the bills “will be rendered at regular intervals.”

Since she had not been sent a bill for seven years, and the $2,362 covered a lot more than three months, PG&E; should be reasonable and cut the bill, she said.

I contacted both Experian and PG&E;, which just last week was reported by the San Francisco Chronicle to rank No. 1 among state utilities for the highest rate of consumer complaints to the Public Utilities Commission.

Rod Griffin, an Experian spokesman, said there should have been only one bad credit reference, not two. Experian doesn’t take two for the same transaction, he explained, though there were two in Deutsch’s file.

Stacy Homrig, a PG&E; spokeswoman, said she would look into the matter, including the puzzling question of how the utility had ever gotten Deutsch’s name in the first place, since she had apparently never signed up as a customer.

A few days later, after the Thanksgiving holiday, Homrig told me, “We’ve decided not to pursue collection, for a couple of reasons.

“Our own policies state that if we haven’t billed a customer in timely fashion, we will not pursue collection,” she said. “It’s our understanding she did not know about the balance due until she called us in 1999, so we feel it would be unfair to try to collect it.”

Second, Homrig said, “We have a time limit to collect, three years. That’s our statute of limitations.”

What happened here, Homrig explained, was that at the time Deutsch and her friends moved into the apartment, PG&E; policy allowed a property manager to call in and put utilities in the tenants’ names on their behalf.

“But in this case, during the time she lived there, the property manager paid the bills himself, and then, in 1995, (after Deutsch had moved out) he realized he was paying in error, called us and asked us to put this in the tenants’ names. Apparently, he gave us her name.

“The property manager’s money was returned to him, and we pursued collection with the tenants. But we couldn’t find her.”

Besides abandoning efforts to collect from Deutsch, Homrig added, “We’ll fix her credit report. Our customer service reps have already called her.”

Deutsch confirmed that she had heard from a Rhonda Reynolds for PG&E;, who told her it would take 60 to 90 days for the utility to expunge the bad credit reference.

But Homrig said later it might be quicker. “The bottom line is, we are very apologetic, and we want to take care of this as soon as possible,” she said. “If we can take care of this, we’re going to do it. I will check to see if the holdup is on this end.”

It’s nice that PG&E; is so accommodating. But why did it take more than a year to reach its conclusions, and only after hearing from a Times columnist?

Meanwhile, at Experian, spokesman Griffin said he had advised Deutsch to “play quarterback for the next few weeks to be sure PG&E; indeed takes her off.”

Griffin said Californians can obtain their credit reports from Experian for $8, billing them to credit cards and getting them online instantly. If they are mailed out, it takes 10 days.

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Ken Reich can be contacted with your accounts of true consumer adventure at (213) 237-7060 or by e-mail at ken.reich@latimes.com.