*new error in Sallie Mae reporting* WTH happened - why is FICO contradicting itself? Please help!

[Anonymous]

It's easy to apologize once you've been caught. The fact that they are not upfront with people who do not know I think is strong evidence of their character.

[haulingthescoreup]

I think a lot of people are giving Sallie Mae "credit" for plotting this all out in advance and attempting to scam people.

To me, it looks a whole lot more like the usual disorganized incompetence that characterizes so much of big business and big government these days.

One individual makes a change that probably doesn't seem like that big a deal to them without first finding out what the affects of the action will be and blammo, something like this happens.

It seems like it started on Friday, so I'd say that no one with any decision-making power at Sallie Mae was aware of this for quite a while, very possibly until Monday morning, so CSR's in the US and India gave their best guesses over the phone as to what happened and why, and how or if it would be fixed.

If you haven't worked in a big organization, you don't realize that this is the norm. Very few businesses are set up to anticipate and handle crises properly, especially when they begin on a Friday afternoon.

It takes vision and communication and organization to accomplish anything planned, whether for good or for evil, and I doubt that SM has any of these three qualities.

[Anonymous]

My loan automatically converted to a 'level' plan in December 07 and I still got hit with this. The India call center this morning immediately recognized my issue and indicated they were working on fixing the problem. So before you call and switch to level you might want to see how this pans out; if you can afford it you will just pay your loan off quicker. I called this morning to switch to a 'level' plan and they said I am already on one and could not switch. However, the website still shows the Grad 2 loan listed. Go figure.

I work in the information security business and truly feel that this is how terrorist will really hurt us; they will hack our systems and cause financial disruption. If the software coding is done offshore it would be easy for them to inject some bad code into the system and wreak havoc. Obviously this is a mistake and Sallie Mae did not even test in a modeled environment before inserting the change to see what would happen; where are the checks and balances that are designed to safeguard our personal information. In actuality, this type of problem has legal ramifications for the executives at Sallie Mae since the law holds them accountable. "Knowingly had the intent" is the language that is used in order to hold someone liable in matters like this. An investigation would need to show that they somehow went on the cheap and did not follow best practices for the situation that led to this event.

Once this is sorted out I will take my loan elsewhere. The Internet forums are wonderful and this outlet has really helped me deal with the emotional stress surrounding this dilemna since I know others are out there; thanks to all who have responded. I think it is great that people are calling numbers that Sallie Mae did not think were posted; soon they will need to change their extensions. Keep on fighting, keep on calling, and don't give up. It seems Sallie Mae is getting somewhat annoyed with us and they are saying the problem will be fixed; I don't feel sorry for them at all. If we drive them nuts they will not want this to occur again. Now we need executive phone numbers so we can start calling them; if anyone has them post them.

In one of my security presentations on personal identity theft I make the point that messing with someones credit nowadays is worse then the old "I'm gonna key your car." Don't mess with my credit Sallie Mae!!

[heavyjay]

SME,

I don't have time to read back through every post so forgive me if this was already pointed out. When I spoke to Molly at the CAU yesterday, she told me this was a joint effort between SM and EQ. Whether or not SM knew how this would affect scores is still up for debate, but there's no way EQ didn't know how FICO would interpret that comment on people's credit reports.

[Anonymous]

I don't work for the federal government or anything, but I do work as an engineer in a company with 40,000 employees. I don't think the have rampant incompetence, the bigger issue is we're made up of lots of acquisitions and there are lots of people doing the same thing independently and processes that run entirely independently. It takes time to integrate things, and it will never work perfectly. We have internal forums now to try to collaborate and share ideas across business units, but the redundancy will continue.

We can see with SM that the India call center gets informed last. Even at the CAU, some are more aware of the problem than others, so we can conclude nobody has sent out a mass email or set up meetings to inform everyone of the problem and what's being done. So expect to keep getting slightly varying answers if you keep contacting them. Even if they were the perfect company, this wouldn't be sorted out over night.

[Anonymous]

Well, both my husband and I switched our loans from graduated to Level yesterday and it did show up immediately online on the SM site.  I am going to call again today and complain about the comments section on the credit report.  I do not think SM did not know what they are doing and with everything that is going on with them right now...I think it was done intentionally.  This is HUGE and I am not taking SM side for one second.  I am going to protect myself and if it means bringing attention to this matter via complaining to the FTC, state attorney general's office, posting messages, sending emails to news organizations...then so be it.  I think we all need to do our part and hopefully someone in the media will pick this up and draw attention to it!  It seems like SM did this very easily and now they can fix it very easily with a click of a button. 

[Ausfarm]

When I spoke to Emily, a SM consumer advocate, yesterday she said they would send in the fix by this weekend.  I asked her if I should dispute the reporting of the debt and she warned me not to.  She said disputing the account could freeze it --thereby preventing the correction they'll send out this week from hitting the account.  She did warn that it could take some time before the CRAs report the update.  She actually asked me if I knew if it was reporting on any other credit reports.  I responded that I wouldn't know. 

I do think this was negligence, and potentionally recklessness, on the part of SM.  I would imagine if someone has suffered damage (i.e., rec'd a higher interest rate) from this reporting then they could potentially recover from SM. Of course this would take knowledge of the problem.  In other words, all those people who have been adversely affected by this don't know.  They probably just assume their credit is bad --especially if they're not educated about credit.  So, no one knowing is beneficial to SM.  That's probably why they haven't publicized it.  Anyone who applied for credit on Monday would potentially have a lawsuit against them.  That's my guess.

Anyway, SM may not have known the effect of reporting this, but they should have known.  Has anyone tried contacting any public consumer advocates or personalities?  Clark Howard comes to mind.  That's someone in the media who would definitely give this issue immediate attention. 

All that said, I'm giving SM the benefit of the doubt.  Like someone before I reduced my payments solely to help my dti in applying for a mortgage.  My score dropped 138 points as a result of this action by SM. 

I worry that converting back to a level plan won't help --that SM may continue to report that (at least for this period) you were on a graduated payment plan (kind of like an old 60 day late that 2 years before the effects of it lessen).  In which case, switching back to a level payment plan will have no effect. 

Message Edited by Ausfarm on 05-13-2008 08:16 AM

[Anonymous]

Hey all read FICO Barry's comment on Sallie Mae reporting, looks like things are getting ironed out!

[Anonymous]

Well, I think that they would need to remove the comments stating that you are only making partial payments if you switched back to the level plan and they cannot report that you are "late" which would show up in history and lesson the impact as the years go on.  So, I think it would be immediate if you switched back to a level payment plan.  When you are in deferrment on your loans it shows up as $0 payment and a note that it is in deferrment and sometimes states what date the deferrment is up.  I would think that if SM wanted to do this correctly, they would need to work with the credit bureaus to determine a more accurate coding.  Or perhaps just list the payment being made and put the terms (30 year...which is usually what the graduated payments are if you are over $30k in loans or something like that).   Basically if you are on a level plan perhaps your term is only 10 or 15 years and when you switch to a graduated plan it ups it to 20 or 25 or 30 years.  How in the hell should this change impact your credit? 

I just called SM advocacy line 10 minutes ago and she kept saying "she could not comment on that" when I asked her what the definition was of the graduated plan was and how they determine that you are only making partial payments.  I think they know they are in deep sh*t with lawsuits.  She said that they are running another tape on Friday to change their coding/reporting back to the way it was.  But also did caution that disputing with the credit bureuas could hinder the update process.  I figure if they are running another tape and I switched back to Level then I should be okay.  I will see if my report updates next week. 

[Ausfarm]

I agree.  I want to think it'll be corrected and they'll report it the way that they were previously reporting.  That being said, I have a hard time trusting large bureaucratic organizations when they insist that they'll fix things.  The level payment plan comment is really just a reflection of that distrust.