03x08 - Credit score in the United States

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[TV static drones]

[bright tone]

[upbeat rock music]

♪

[cheers and applause]

- Welcome, welcome,
welcome to "Last Week Tonight."

I'm John Oliver.

Thank you for joining us.

Just time for a quick recap
of the week.

And we begin with Panama,

a country you think about
so little,

you don't realize,
that's not Panama,

that's the outline
of a Scottie dog.

This is Panama.

Panama caught the world's
attention this week

in a big way.

- We turn now
to the banking bombshell

causing shock waves
around the world,

the so-called
"Panama Papers."

- It's one of the biggest
data leaks in history,



blowing the lid
off some of the world's

most powerful people
and their offshore billions.

- This is absolutely huge

because the lid on billionaires'
offshore accounts

is similar to the lid
on a yogurt that's been

in the fridge for three years.

If that lid comes off,
stand back.

You're about to see
some nasty shit.

So the "Panama Papers"
are internal documents

from a law firm called
Mossack Fonseca,

which specialized
in creating offshore accounts.

And given the sheer volume
of information here,

this story is going to take
months to unfold,

but it's already
inflicting casualties.

For instance, the documents
linked Iceland's prime minster

Sigmundur David Gunnlaugsson

to a shell company
called Wintris,

which held millions of dollars.

And watch his body language
as a TV reporter brings it up

for the very first time.

- Mr. Prime Minister,
what can you tell me

about a company called Wintris?

- Well...

[audience laughs]

Um, it's a company--

if I recall correctly,

which is associated
with one of the companies

that I was on the board of.

And it was--

had an account which,
as I--as I mentioned,

has been with the tax--

on the tax account

since it was established.

- Holy shit.

That is like watching
a slow-motion car crash.

Or as they say in Iceland,

"a slow-motion car crash."

Come on, guys,
they have cars in Iceland.

It's a modern
Nordic island nation,

and their English is excellent.

But Iceland has
only just recovered

from a huge economic downturn,

so its citizens were
understandably upset.

man: In Reykjavik,
they have been throwing

eggs and bananas
at their Parliament building.

man: They're throwing things
at the Parliament.

- Yes.
- Can you believe it?

- I think they have not
thrown enough.

- Wow.

Eggs and bananas.

They're either angry
at the prime minister

or encouraging him
to get on a Paleo diet.

And, yes, yes, I know
that there's some controversy

in the Paleo community
about whether or not

bananas are Paleo,

but if you're infuriated
by that joke,

please know:
you're a terrible person.

You're just terrible.

[crowd cheering]
And the point is--the point is--

just days after those protests,

the prime minister stepped down

and was replaced
by the Fisheries Minister

because, it seems in Iceland,
the line of succession goes:

Prime Minister,
the guy in charge of the fish,

the secretary
of licorice-flavored schnapps,

a litany of elves
that live in assorted boulders,

and finally, anybody in a wool
sweater who's feeling political.

And if you're thinking,
"Come on,

how could he leave out Bjork?"
I didn't.

She was one of the elves.
Pay attention. Pay attention.

And--and, look,
it--it was not only

the leader of Iceland
in trouble.

The presidents of Argentina
and Ukraine

and the king of Saudi Arabia,
among several others,

were directly linked,

while UK Prime Minister
David Cameron

was accused by critics
of benefiting from his father's

newly revealed investment fund,

an accusation
that he vigorously denied.

- In terms of my own financial
affairs, I own no shares.

I have no shares,
no offshore trusts,

no offshore funds,
nothing like that.

- "I own no shares."

Now, if the present tense there
seems a little suspicious,

it might be
because it later turned out

he had owned shares;
he'd just sold them.

So saying, "I own no shares"
is not really the whole story.

It's a bit like A-Rod saying
he has no steroids in his body.

Sure, that's true, now.

But it wasn't always the case,
was it?

And that's kind of the point.

And it seems kind of incredible
that in a story

featuring world leaders
and possible corruption,

we have not yet heard the name
Vladimir Putin in all this.

Well, just wait.

Because while he was not
directly linked

to any companies
in the documents,

that may not mean
he's not involved.

woman: Investigators say
these documents are a road map

to how Putin could have
stashed away billions.

The papers point
to this cellist,

Sergei Roldugin,
godfather to Putin's daughter,

placed in charge
of the companies.

- It's true.

The papers revealed the identity
of a suspiciously rich cellist,

which raises
immediate red flags for me

because I always thought
the only way to make millions

with a cello is to use it
to dig for gold.

And also, if cellists are really
that good at investing,

then someone should frankly get
Yo-Yo Ma

to run a stock tip hotline.

Except, don't worry,
'cause we've already done it.

[dial tone drones]

- He does!
The guy loves cellos.

Now--now--now,
the law firm involved here

has not yet been charged
with any crime,

but it is hard to believe

they didn't see
any warning signs

when they incorporated
actual companies

named Goldfinger, GoldenEye,
Moonraker, Spectre, and Blofeld:

all famously associated
with James Bond villains.

And I can't think of anything

more inherently suspicious
than that,

other than perhaps the phrase
"Vladimir Putin's

multimillionaire
cellist friend."

So for now,
let's move on to Alabama,

a state whose very flag
is the universal sign for

"No. Absolutely not.
Under no circumstances."

Their governor
has been in the news lately

due to a sordid scandal.

woman:
Alabama governor Robert Bentley

under fire but refusing
to resign after being accused

of an affair with one of his
top aides, Rebekah Mason.

The allegations surfaced after
sexually explicit recordings

of him became public.

- Ugh!

He says that like an eighth
grader trying to convince

the boys' locker room
he's had sex.

"And then I stood behind her...

"and I put my hands on
her boobs, and we were done.

"Then she yelled, 'Hooray!

"You're the best person
at sex!'

"It happened. It happened.

We did sex, y'all!"

Now, while Bentley denies
a physical affair,

there have, nevertheless,
been moves to impeach him,

including charges that,
in the course of the affair,

he unlawfully used
state property.

And there's one particular piece
of property that,

according to someone who heard
the Bentley tapes,

might have been involved.

- It's stunning--it really
is--when you hear it, uh,

Governor Bentley describing, um,
encounters with Mrs. Mason.

At one point,
made the comment that,

"If we're gonna do this again,"
you know, "we're gonna

"have to lock the door,
and we're gonna have

to move Wanda's desk
farther away from the door."

Wanda being his
executive assistant

whose office is just right off
of the governor's office.

- Hey, don't bring Wanda's desk
into this!

You know what?
You know what?

Wanda is the real victim here,

and if the Governor will not
apologize to her, I will.

Wanda, I am sorry

that you got dragged
into this shit.

You didn't get
into public service

to listen to the sounds
of a 73-year-old man

groping a staffer.

So to make it up to you,
tomorrow,

we are sending
an Edible Arrangements

"I Am Berry Sorry" fruit box
to your desk,

wherever it is now.

You enjoy it, Wanda.

You enjoy it.

And look.
Look.

This--this impeachment
process alone

shows how bad things currently
are in Alabama politics,

because under
the state constitution,

the articles of impeachment
must be presented

by the Speaker of the House:

in this case, Mike Hubbard,

who is currently awaiting trial
on 23 felony charges.

And once the trial begins,
it will be presided over

by the Chief Justice
of the state supreme court,

Roy Moore, who was once himself
removed from office

for the dumbest possible reason.

man: Moore was charged
with six counts

of ethically violating
his office

for refusing to remove
a stone depiction

of the Ten Commandments
he had placed

in the state
Supreme Court's rotunda.

- It's true.

So let's just recap
for a second.

the Speaker of the House,

who is currently facing
felony charges,

will present the articles
of impeachment to the Governor,

accused of a sex scandal,

and the whole thing will be
presided over

by the Chief Justice,
who was once removed from office

for ethics violations.

This is either a grave insult
to the state of Alabama,

or the most Alabama thing
that state has ever done.

And now this.

woman: Take a look
at these fans

at Tuesday's
Astros-Yankees game.

Yes, they are dressed as
Teenage Mutant Ninja Turtles.

man: John Oliver filled
some of those opening day seats

selling the tickets
for just 25¢.

woman: On Wednesday,
that meant a pair of fans

in unicorn costumes,
another pair in shark costumes.

man: Yesterday,
two guys dressed as dinosaurs,

and they sat in the front row,

and they got on
the center field video board.

man: That's awesome.

["Take Me Out to the Ball Game"
playing]

[whimsical organ music]

♪

man: Dancing sharks
here at Yankee Stadium.

man: And the pitch.
Swing and a miss! Got him!

- Is that Raphael?
Is that Donatello? Michelangelo?

It's the Ninja Turtles.
[laughing]

So there was a contest
put on by HBO's Jon Stewart.

[audience groans]

- Moving on. Moving on.

Moving on.

Our main story tonight--

Our main story tonight
concerns credit reports:

the basis for the single
most important

three-digit number
in your whole life.

Other than, of course, 311,

The Beatles of rap-rock.
man: Whoo!

- Measuring credit
enables businesses

to know who to lend to.

It's critical to our economy,
and it always has been.

- Millions of people use credit

to buy the things
that add up to a better living.

- Well, there's sure
a lot of things

that I'd like to buy
for better living.

How about giving me
a little credit?

- Nobody gives you credit,
John.

It's something
you have to earn.

man: To earn credit,

first, you have to develop
your character.

You have to have capacity
to pay your bills,

and third,
you need some capital.

Scoring high
on these three Cs

is essential to earn
a good credit rating.

- Of course, back then,
there was a fourth C

determining your access
to credit,

namely,
what color you were.

It's a little bit weird
that one didn't make the movie.

But you might be surprised
at just how many aspects

of your life
your credit report can affect,

because it's not just banks

deciding whether
to lend you money.

It's also landlords deciding

whether to rent you
an apartment,

insurers setting your rates,

and even employers
using it to decide

whether or not to hire you.

- 47% of employers do conduct
credit checks

on new potential hires,

and it is legal if the employer
gets permission

from the applicant.

- That's right,
nearly half of employers

delve into credit histories
when hiring.

Just look on Craigslist,
because you'll find

credit checks are required
in all sorts of job listings,

from managing a Benihana
in Cincinnati,

to this one, which reads...

Which is clearly ridiculous.

They don't need to bring
credit into that job.

They just need to ask
the question,

"What do you think
of fireworks?"

and then hear the answer,

"Fireworks are
f*ckin' sick, bro!

I f*ckin' love
lighting those f*ckers!"

The only three digits
they need to see

are the ones
on that person's two hands.

There--there are--

there are three big
credit-reporting firms:

Equifax, Experian,
and TransUnion.

All three aggressively market
their products

for uses beyond lending.

For instance, listen to how
Experian convinces employers

that your credit may reflect
your future job performance.

- If you manage your credit
well, then it's very likely

you're going to manage
the company's money well.

- Yeah, is it, though?

Because look at me.
My credit is probably fine,

but I routinely waste
HBO's money on stupid costumes,

pyrotechnic displays,
and checkered dress shirts.

I-I clearly cannot manage

this company's money well.

Now, as for TransUnion,

their website explicitly states
that credit reports...

Which is a little surprising,
given this exchange

between a representative
from TransUnion

and an Oregon legislator:

- What is the evidence that
there's a strong correlation

between accessing
an applicant's credit history

and eventual problems
of loss to the employer

or to the clients,
I guess, in that case?

man: I would say that there--
at this point,

we don't have any research
to show

any statistical correlation

between what's
in somebody's credit report

and their job performance

or their likelihood
to commit fraud.

- Okay, so they admit
there is no evidence

of a correlation,
which does make sense,

because a good credit score
could mean

you're unlikely to commit fraud,
but it could also mean

that you're so
f*cking amazing at it,

you've never been caught.

And incidentally,
not 30 seconds later,

that guy said this:

- Given all things equal

between two or three
job applicants,

if a person has a high,
high amount of debt

versus somebody who doesn't,

and all things other
being equal,

well, maybe they want
to consider that.

- So wait,
he's saying

"There's no proof
of a correlation,

but you're free
to imagine that there is,"

which is not a strong argument.

I can imagine
that eating alphabet soup

will increase my vocabulary.

That doesn't make it
indubitable.

Ooh, indubitable!

I knew I ate
a lot of letters yesterday!

Indubitable!

But, look,
giving too much credence

to credit reports
as a measure of character

may be a big mistake.

First, over half the debt
on credit reports

comes from medical expenses,

and it seems unfair
to judge someone for that.

No one chooses to be sick,

with the possible exception

of Julianne Moore taking a run
at best actress.

But--but, also,
credit reports can contain

a shocking number of errors.

- A new government study
found about 25% of consumers

have an error
in one of their credit reports.

The study also found about


that could cause them
to pay more

for a car loan or a mortgage.

- Just think about that.


and 1 in 20
were seriously wrong.

And that is not good.

If every 20th Frosty
that Wendy's sold

turned out to be a cup
of warm goat semen,

we would want
some accountability,

and we'd want it fast.

At least freeze it!

And, look.
Those--

those errors can be anything
from including debt

that you've already repaid

to mixing you up
with someone else entirely.

Take what happened to a woman
called Judy Thomas.

She couldn't figure out
why she kept getting turned down

for loans until she looked
at her credit report.

- I saw debt
from Utah Medical Center.

I saw debt from a veterinarian
clinic in Utah.

I saw collections...

for a Judith Kendall.

- Judith Kendall?
Thomas: Mm-hm.

- Not Judy Thomas?
- Correct.

- What's going through
your mind?

- "What the hell's she doing
on my credit report?

What the hell is her debt
doing on my credit report?"

- Wow, how can
someone called Judy Thomas

be mixed up
with Judith Kendall?

And also, if she's going to be
mistaken for anyone,

how is it not Lesley Stahl,
because that is spooky.

And it actually gets worse,

because if a credit reporting
agency matches your name

to a list of suspected criminals
the U.S. has sanctions against,

as they did with Amit Patel,

you may be
in for an unpleasant surprise.

man: After being denied
his dream apartment,

he asked his landlord why.

As an answer,

the landlord forwarded
his credit report.

- Can you read this for me?
What does that say?

Patel: t*rror1st.

- Holy shit.

That is terrible,

because one:
he is not a t*rror1st.

And two: I do hope
we have a better strategy

for dealing with t*rrorists

than flagging
their credit reports

and denying them
their dream apartments.

"Hey, not in America.
Not in America!"

And being mixed up
with a t*rror1st is not even

the worst thing a credit bureau
can do to someone.

man: Helen McGill was shocked

when she went to buy
a travel trailer,

to learn she was dead.

- The financial manager
came out and said,

"Do you have, like,
a copy of your card,

because you keep coming up
deceased?"

So I was like,
"There's no way."

man: Three major credit bureaus
listed her as deceased.

- I even paid,
at that point, too,

to get my credit score.

You can't get anything
when you're deceased.

No credit score.
There's nothing.

You don't even exist.

- Just one error
on your credit report,

and suddenly the world
treats you like a mean girl

treats the high school
debate team:

"You're nothing, Amberly.
You don't even exist."

[laughter]

And here is the thing:
it would be bad enough

if this just involved
the three big credit bureaus,

but on top of that,
there are now hundreds

of different companies providing
even broader background checks,

which may bundle
credit information

with things like criminal
or driving records.

And while some companies appear
to operate responsibly,

others, like
General Information Services,

or "jizz"...
[laughter]

Do things that make you doubt
their judgment.

We--we actually found
this fun video they made,

featuring Snow White
coming to them for help.

- Now, fairytale isn't an
industry that we specialize in,

but lucky for you,
our magic mirror can find

anything worth locating.

If only you were
in the insurance industry.

We've created tons of solutions
for those guys.

[bells chime]

- Oh, my!
Was that a fairy?

- We're an equal
opportunity employer.

- Whoa!

Whoa. Whoa, whoa, whoa,
whoa, whoa.

Hold on.

Was that a h*m*
"fairy" joke?

Because it's hard enough
to accept judgment

from a company
that would do that,

let alone deliver it
with the acting skill

of a shy third-grader.

And background check agencies

can take all the problems
of credit reporting,

while adding a few more.

And let's begin
with the obvious here.

as we've discussed before
on this show,

a criminal record does not
necessarily mean

you're a bad person
or that shouldn't be hired,

but if you are going to use
a criminal background check

to make decisions,
at the very least,

they should be accurate.

And frequently,
they are not.

Take Samuel Jackson
from Chicago.

No relation to the actor,
obviously,

or to the three different
sex offenders

one company confused him with,

even though one
of those convictions happened

when Jackson was
just three years old.

Or as his lawyer puts it...

- The background check company
was aware

that Mr. Jackson is
only 30 years old,

so it clearly
couldn't have been him,

and obviously he couldn't be
all three sex offenders

at the same time.
[laughs]

- Of course not.

Of course not,
because there's only one person

who could pull off being
three sex offenders

at the same time, and that is
Mr. Neil Patrick Harris.

I'm not saying he is.

I'm saying he
has got the performance chops

to make you believe
it is possible.

If he put it might--
if he put his mind to it,

he could be
the literal triple threat.

He's that good.

He is that good a performer.

And remember,
these mistakes can cost people

housing and jobs.

It is no wonder
that many firms have wound up

facing legal challenges.

For instance, just last year,
GIS and their affiliate

had to jizz out $13 million

in fines and damages.

And while they admit
no wrongdoing,

they've now lost so much money,

their next shitty video
is probably just gonna be

a filthy parrot
in an old warehouse,

screaming, "Polly wants
a background check!"

And at this point,
you are probably thinking,

"Well, holy shit,
I should probably check

my background and credit
reports."

Well, the good news is:
under a law called

the Fair Credit Reporting Act,
the big three credit firms

are required to give you a copy
once a year,

and there's even an official
site where you can get yours.

But if you do spot an error,

your trouble
may just be beginning.

Remember Judy Thomas?

It took her
a surprisingly long time

to get her credit fixed.

man: It became a six-year
battle with credit agencies,

requiring box-loads
of correspondence

to try and prove
that she was Judy Thomas,

not Judith Kendall,

all to no avail.

- I also hired an--
a local attorney

to try and straighten it out.

We had everything certified

that this is Judy Thomas.

This is where I live.

I've never gone
by the name of Kendall.

I've never even been to Utah,

let alone
owing a cable company in Utah.

- And what happened?
- Nothing.

- Oh, come on.

At this point, I'm surprised
she didn't just go,

"You know what? f*ck it.
I'm Judith Kendall.

"I'm moving to Utah,
and I'm getting a sick pet

"and a cable package.

At least then, my life will make
some f*cking sense to me."

It's probably not surprising

that when we crunch
the numbers,

we discovered that the three
big credit bureaus have been

the subject of the most
complaints to the CFPB

since the start of last year.

And they may say that sometimes
they receive inaccurate data

from creditors, so the mistakes
don't originate with them.

But if that's true, their method
for resolving those problems

clearly needs to be better.

And in a settlement agreement
just last March,

they actually pledged to improve

their dispute
resolution process.

But before you get too hopeful
about that,

it's worth noting: the industry
has claimed for decades

that they are always improving
their accuracy.

And yet, for 25 years now,
the news stories about them

have had something
of a similar tone.

- We saw a recent study
that said 25% of credit reports

had errors serious enough
to deny you credit.

- A new study finds
a staggering number

of credit reports contain
mistakes.

- A new study says
credit reports frequently have

errors that can be very costly
for consumers.

- A survey by the U.S.
Public Interest Research Group

found nearly 1/3 of all
credit reports

contained serious errors.

- You don't have to spend long
preparing a broadcast

about credit agencies before you
learn one simple truth:

everyone, and I mean everyone,
has a horror story.

- It's--it's pretty obvious that
problems with credit agencies

are a classic news-story trope.

Like "oldest person dies,"

or "scary new teen sex trends."

"Coming up: we've all heard
of 'Netflix and chill,'

"but what does it mean
when your teen says

"they're going to
'Hulu and rimjob'?

It is not as innocent
as it sounds."

[laughter]

There is--the point is,
there is nothing new

about this problem.

In fact, when we were
researching Judy Thomas's story,

we found a news clip
about a lawsuit from 2002

that gave us déjà vu.

- It was the culmination
of a six-year battle

for Judy Thomas, who tried
repeatedly to get TransUnion

to clear up the mistakes
on her credit report.

- Another Judy Thomas!

So Judy Thomas was
not even the only Judy Thomas

this had happened to!

The lesson here
is pretty simple.

If you or someone you know

is named Judy Thomas,
give up.

There is no hope in life
for Judys like you.

And if anything,
things are even worse

with background check companies,

because they are also required
to give you

a copy of your report
if you request it.

But there's a massive loophole
there,

because, unlike
the credit bureaus,

most of them don't keep files
on all consumers,

they just search for data
when someone pays them to.

And if you're about to apply
for a job or an apartment,

you might think, "Well, hold on.
I want to be sure

"that there isn't a problem
on my report,

so I'll just buy it first
myself."

So we actually asked
these companies

if they'd let us do that,
and they all said no.

Meaning, if they confuse you
with a sex offender,

you might not find out

until that job or apartment
is all but gone.

And, of course, you know
who you'll have lost it to,

don't you?

Neil Patrick Harris.

Of course--you wouldn't
even think he could take

a certified public accountant
job, but he can!

And he does it so well!

And he's so likable
while he does it.

He is so good!

Now, to be fair--
to be fair, here,

some companies will sell you
your own report.

So we had some of our staffers

buy their own background checks
from a few companies.

And while most of them
came back fine,

five of our staffers' reports
included alias names

that they'd
never heard of before,

and one staffer, Charles Wilson,
was mistaken for a man

who was indicted
for Medicaid fraud in Florida.

Now--now, that site did say
Charles's listing was

"pending verification,"

and it was later removed
from his report.

But it was still too late,
because by that time,

in a Spartacus-style show
of support,

our entire office had
already rallied around Charles

and committed Medicaid fraud.

Because we care about him.

And--and listen,
given the stakes here,

you would hope that these
background check companies

are being closely monitored,
but as this FTC official admits,

there is an alarming amount
that they don't know.

- Is there any kind of national
list of these companies?

- No, there isn't.

- So we don't know
how many of these companies

are even out there?

- No, we don't,
and I think

that's one of the challenges.

- Yeah, no shit,
that's one of the challenges.

You can't just lose track

of how many background
check companies there are,

the way that we've all
lost track

of the number of Oreo flavors.

Root beer float?

Are you f*cking kidding me?

You are sick, Oreo!

You're all sick!

And the problem is,

this whole industry seems
uncomfortably complacent.

In fact,
remember that FTC study

that I mentioned at the start,
which showed

that 1 in 20 credit reports
had serious errors?

An industry trade group put out
a press release

in response to that,
with the title,

"FTC Report Confirms
Credit Reports Are Accurate,"

arguing it showed...

But when you are holding records

for more than 200 million
individuals,

that 5% error rate
affects 10 million people.

They're basically saying,
"Great news, everyone!

"We only f*cked up a group

"equivalent to the entire
population of Sweden.

We're the f*cking greatest!"

If only we could make
this whole industry

understand the jeopardy
that they're placing people in.

But you know what?
Maybe we can.

Because remember
the big three credit companies,

Equifax, Experian,
and TransUnion?

Well, we started
three terrible companies

with names that are
problematically similar

to theirs.

Specifically, "Equifacks,"

"Experianne" and "TramsOnion."

What do those companies do?
Great question.

If you just visit equifacks.com,

you will see that they take
shelter animals

to customers' homes,
where the animals

lick peanut butter
off people's genitals,

before being immediately
returned to the shelter.

Equifacks
is just an awful company.

But don't worry, Equifax.

I can't imagine anyone will
mistake them for you.

And if you go to Experianne.com,

you'll find a company that sends
people to whisper passages

from "Mein Kampf"
into babies' ears,

with the permission of neither
the baby, nor the parents.

And finally, don't miss
TramsOnion.com,

where you can buy
these delicious-looking steaks

made from the flesh
of dead orcas

who worked at SeaWorld.

It would clearly be
an absolute disaster

for the credit agencies

if they were mistaken
for any of these companies.

But don't worry.

I'm sure that won't happen


And apparently,
that's good enough, right?

That's our show.
Thank you so much for watching.

We'll see you next week.

Good night!

[cheers and applause]

[bright tone]