Business Credit Journal April 2014
The Pebble Leads to an Avalanche A Comment regarding "The Pebble Leads to an Avalanche:"
We publish this article because of a concern that our members, many of which are small to medium-sized businesses may have been contacted by Dun & Bradstreet Credibility Corporation in the attempt to sell services designed to improve business credit standing or credit score. While the jury is still out on the efficacy of these services, there have been complaints and lawsuits claiming the services did not deliver as promised. NACM Oregon encourages every company to monitor its credit report, just as individuals should do. And, we encourage every member to contribute its file of customer credit experiences monthly to the national NACM database. This rewards those customers who provide timely payment and makes more visible those customers who do not meet their obligations in a timely fashion. This conflict between Dun & Bradstreet, the “Grand Old Lady of the Credit World” as our staff writer refers to the company, and Dun & Bradstreet Credibility Corporation is unresolved. We will monitor news reports and legal filings and report to you until this is brought to a conclusion. Rod Wheeland, President, NACM Oregon
In December of 2012, Orin and Robyn Kolaitis, husband and wife, owners of O&R Construction, filed a lawsuit alleging Dun & Bradstreet (D&B) and Dun & Bradstreet Credibility Corp (DBCC) orchestrated “a scheme to falsify credit reports in order to defame and cause significant harm to small businesses.” It had been a long, frustrating year for the boutique construction company in Oak Harbor, Washington. Founded in 2004, O&R has kept afloat through some trying economic times. As their business grew they carefully selected skilled carpenters and subcontractors. In 2012, O&R discovered their credit limit at Home Depot had been lowered by $8,000. As many small business owners know, credit lines - even small ones - can be vital. The care O&R takes in managing their business made the discovery even more distressing. Court filing allege the reduction was prompted by a poor credit report from D&B. Ms. Kolaitis claims this report was incorrect. Initially, to help facilitate these corrections, in May of 2012, Ms. Kolaitis purchased $1,046 for a year’s worth of DBCC services. According to the lawsuit, purchasing the DBCC service didn’t improve their ratings or scores. The most
In This Issue
recent reports on the lawsuit state that Home Depot still hasn’t restored O&R’s credit line to its original level.
The Pebble Leads to an Avalanche.............................. 1
Though a ruling in May of 2013 nearly saw the lawsuit dismissed, a new dismissal motion by D&B was thrown out in January 2014.
International Corner................ 2
Reporters (Joann Lublin and Angus Loten at the Wall Street Journal have been diligently following the case) and industry insiders like NACM’s, Brian Shappell, are keeping a close eye on the outcome. O&R’s situation does appear to be an isolated case. Some businesses - the Wall Street Journal claims to have talked to “more than a dozen” - are pitched DBCC products aggressively. One small business owner was told there were indications of a poor credit rating - despite an established $100,000 credit line that had never been paid late. After purchasing a year of DBCC’s CreditBuilder services, their credit rating recovered. Like O&R, other small business owners are reporting a similar script is being used when they call DBCC to inquire about negative credit activity. They are pitched a DBCC solution but, like O&R, don’t always find their credit rating improving. Even with paid access to their profile, some can’t even identify a cause.
Chair’s Message...................... 3 President’s Message................ 3 Legal Corner .......................... 6 Education .............................. 8 NOF Scholarships.................... 9 Congratulations CBA & CBF...... 11 NACM National News............... 15 Credit Learning Center............ 16 Trade-Based Money Laundering Red Flags .............................. 17 Contacts................................. 18
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