| Until recently lawyers for victims of credit damage | | | | genuine. They have a tough time awarding damages |
| had little possibility to collect for damages beyond | | | | based on sympathy. In order for them to confirm |
| medical treatment, lost wages and property loss. | | | | authenticity of a claim, they want to see its |
| Insurance companies threw up their hands in | | | | quantification. |
| sympathy, claiming victims can only be compensated | | | | Measuring Loss of Creditworthiness |
| for what can be measured tangible goods and | | | | Assuring authenticity has been a sticky situation |
| services. But, what happens when the victim has lost | | | | when it concerns measuring out-of-pocket loss for |
| considerable time from work, the family bank is | | | | victims of credit damage until now. Attorneys who |
| broke and monthly payments on mortgages, car | | | | represent victims of credit damage are now utilizing |
| loans and credit cards payments are missed? | | | | the Credit Damage Measurement method to recover |
| Regardless of the haggling between lawyers and | | | | out-of-pocket losses for their clients. CDM measures |
| insurance companies, it's the credit victim who ends | | | | the actual out-of-pocket dollars reasonably expected |
| up having to live with a bad credit rating. | | | | from loss of creditworthiness, which includes higher |
| Today, there are legally accepted means for | | | | down payments, higher points and costs on loans, |
| measuring loss of credit through the procedure of | | | | higher interest rates, higher monthly payments, or |
| Credit Damage Measurement (CDM). CDM is fast | | | | outright denial of credit, says Key. |
| becoming a potent tool for recoverable credit | | | | In addition, the CDM method also calculates the |
| damage awards when the damage is not self-inflicted. | | | | rates, costs and other terms applicable to the |
| Previously, both judge and jury, and especially the | | | | resulting credit rating by lenders and projects the |
| insurance companies, refused to acknowledge CDM | | | | results over the relevant number of years for the |
| claiming it was speculative because they could not | | | | types of loans the client is likely to seek. |
| define it as tangible damage. However, in case after | | | | Key continues, For example, if a clients credit was |
| case, victims of credit damage who use the CDM | | | | near perfect before a triggering event, and is |
| method are getting compensation for credit loss. | | | | subsequently damaged by the event, the CDM |
| Many factors are changing the old mindset including | | | | procedure can illustrate before and after analyses, |
| credit bureau technology improvements, the | | | | calculating the cost of the same loans with the two |
| application of the Fair Credit Reporting Act (FCRA), | | | | different credit reports, Pre- injury credit compared |
| risk scoring sophistication, and the development of | | | | to Post-injury credit. In many cases, CDM clients have |
| CDM as an objective, repeatable method that | | | | already realized significant compensation. In one such |
| measures out-of-pocket damage reliably. | | | | case CDM was instrumental in recovering $56,000 for |
| Credit Ratings and Recovery. The impact of a bad | | | | damaged credit reputation. That calculation is the |
| credit rating is much more significant than most | | | | difference between what refinancing a $140,000 loan |
| people think. Consider what poorly rated consumers | | | | would have cost my client with their prior rating, and |
| face when they want to lease or buy vehicles, obtain | | | | what it will cost them out-of-pocket with their |
| credit cards, buy or lease or refinance their residence. | | | | damaged credit rating measured over a seven-year |
| In most cases, it's an easy decision for the creditor: | | | | period. |
| the credit application is simply turned down or the | | | | Isolated Compensation vs. Repeatable Compensation |
| borrower is charged a much higher down payment | | | | The CDM method of measuring intangible credit loss |
| maybe thousands of dollars more with monthly | | | | is increasingly becoming the basis of recovery for |
| payments that are typically several hundred dollars | | | | victims of credit damage. Its changing the way |
| more. | | | | judges and juries measure recoverable out-of-pocket |
| A person with bad credit is viewed with suspicion and | | | | loss, and then can compensate for loss of credit |
| is charged significantly more for future extension of | | | | expectancy. Certainly there are still some skeptics, |
| credit because the lender feels the need to protect | | | | mostly defendants. Technically, credit damage |
| against a greater risk or default says Tom Key, a civil | | | | measurement is intangible. However, CDM has proven |
| litigator practicing in Tustin, CA. | | | | an objective and practical procedure to calculate |
| Over the years I have heard reports of financial | | | | out-of-pocket damage for companies or families to |
| damages from clients who have been wrongfully | | | | compensate for their credit damage. |
| terminated, defrauded, injured in an accident or | | | | To have this kind of measurement is an exciting |
| suffered losses from breach of contract, Key says. | | | | complexity in our society, says Key. CDM is very |
| These victims were especially distraught over the | | | | understandable and a rather simple way to come to |
| fact that their prime credit reputation, carefully | | | | a conclusion of loss for the victim. If you understand |
| nurtured for years, is destroyed overnight. It seemed | | | | the math and are an expert at reading credit reports, |
| to me that there must be a way to compensate | | | | the calculations and recovery are undeniable. It's a |
| victims for that type of loss. | | | | method of turning isolated compensation into |
| Key has witnessed the reactions of many jurors who | | | | repeatable compensation. It's changing the way jurors |
| failed to award a victim of credit damage their | | | | rule on these damaging cases. Because of this |
| rightful compensation simply because they could not | | | | method, victims of credit damage can be more fairly |
| quantify the damages. Jurors want a specific loss | | | | and more completely compensated for out-of-pocket |
| that they can count, hold and see, says Key. Their | | | | damage. |
| reasoning is that they need to know that it is | | | | |