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Not Just in Kansas Anymore

Topeka Credit Bureau Problems Not Unique

By Martin H. Bosworth
ConsumerAffairs.com

July 5, 2005
When Onis Lemon, a straight-shooting Kansan retired in 2001 after forty years in banking, he wasn't expecting to be called back to work. But when the chairwoman of the Topeka Credit Bureau resigned in 2002, Lemon was asked to serve on a temporary basis until a replacement could be found, putting him in the middle of a story that illustrates the changing face of the credit industry.

Experian/Topeka • Not Just in Kansas Anymore • Tempest in Topeka May Not Be Unique • Experian Examines Consumer Data Abandoned in Kansas • Thousands of Consumer Data Records Abandoned in Topeka --- Data Theft • 68,000 CalOptima Members at Risk in Data Breach • Express Scripts Extortion Scheme Widens • Technology Could Be Key To Stopping Unauthorized Charges • T-Mobile: No Hacking in Data Breach • T-Mobile Confirms Data Breach • Consumers Increasingly Concerned About Online Transactions • Are Identity Theft Services Worth the Cost? • Online Tools Help Spot Financial Fraud • Financial Fraud Hits 7.5 Percent Of Americans In 2008 • Feds Charge Mortgage Broker In Potential Data Breach • Millions of Credit Cards Exposed in Data Breach • 2008 Data Breach Total Soars • Bank Data Breach Threatens 248,000 in North Carolina • GPS Not Foolproof • Countrywide Warns Millions of Data Breach • Thieves Steal AT&T Laptop with Employee Data • Report: Data Breach Disclosure Laws Don't Affect Identity Theft • Patient Information Exposed in Data Breach at Walter Reed • Supermarket Chain Reports Data Breach • Report: Feds Still Not Doing Enough To Secure Data • Data Thieves Hit Georgetown University Students, Faculty • 800,000 Job Seekers At Risk In Gap Data Breach • TJX Data Breach Settlement Has Strings Attached • More ...

As detailed in our earlier stories, the discovery of thousands of data records abandoned by the defunct Topeka Credit Bureau led to the national Experian credit reporting agency intervening to authenticate the legitimacy of the records.

Lemon has no doubt his experience isn't unique. "It's happened all over the country," he said flatly.

"Local credit agencies have been purchased and put out of business" by the major credit bureaus, as they centralize their records and focus their efforts on Web-based sales of credit products, he said.

Traditionally, local credit bureaus served their communities by providing credit reports and lending information in tandem with the major credit agencies. These partnerships were based on contracts, renewable every five years.

But not long after he took over as interim chair of Topeka Credit Bureau, Lemon was called to Experian's offices to discuss the contracdt renewal, only to be told there would be no renewal.

"We are dissolving the partnership…we can buy you out or just let the contract expire," Lemon said Experian told him. The Board of Directors elected to dissolve the bureau, since they could not operate without the Experian contract. They cashed out their members' shares to the tune of $1.3 million.

Lemon oversaw the liquidation of the Bureau's assets, made sure Experian received all of its files, and sold the collection assets to local lawyer and collections agency owner H. Kent Hollins. "We sold him the building and all of its contents," Lemon stated.

However, along with the collection records, the bureau left behind many duplicate credit files containing detailed personal information on thousands of Kansas consumers, Lemon said.

A short time later, Hollins sold the building via broker Jamie Eldinghoff to local political consultant Augie Bogina, who was shocked to find out there were shelves filled with documents and computers left lying about unguarded.

This led to a protracted feud between Bogina and Hollins, which continued even as Experian responded to earlier ConsumerAffairs.com reports by sending representatives to Topeka to examine the data left behind and offering to help Bogina dispose of it.

For his part, Lemon was disappointed that Hollins "shirked his responsibilities" regarding disposal of the data. "He put everything on computer and just walked out," Lemon said.

"If he'd just called me and said 'Hey, Lemon, I don't want to deal with this,' I'd have gone over there and got 'em myself." As Hollins bought the building, it was his responsibility to get the data disposed of properly, Lemon said.

Lemon is also critical of Bogina, who he feels was motivated more by money than by a desire to do the right thing. "We offered him a settlement and he refused," Lemon said.

Nor is Lemon pleased by Experian's role in hastening the demise of local credit bureaus, saying Web access and automated telephone banks are no substitute for the personal service local credit bureaus once provided.

"These people worked with the locals and could provide them credit when they needed. I wasn't happy with the dissolution…not happy at all."

AS for Lemon, while the Topeka Credit Bureau episode is now behind him, he has still not achieved his goal of retiring. Instead, he's been recruited to help engineer the consolidation of the city of Topeka with the larger Shawnee County, forming a unified government for the Topeka region -- possibly an even more nettlesome task than trying to straighten out the aftermath of the credit bureau collapse.

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